Atiku’s Company Reacts As Buhari Terminate Contract With NPA
A company partly owned by former Vice President Atiku Abubakar, Integrated Logistics Services (INTELS) has reacted to the termination of its contract with the Nigerian Ports Authority (NPA).
Naija News reported on Tuesday that President Muhammadu Buhari cancelled the restoration of the boat pilotage contract following legal advice from the Attorney-General of the Federation and Minister of Justice, Abubakar Malami (SAN).
The Nigerian leader also sought advice from the Director-General, Bureau of Public Procurement (BPP), and Acting Director-General, Infrastructure Concession and Regulatory Commission (ICRC).
The termination was announced in a letter dated January 7, 2022, signed by the Chief of Staff to the President, Ibrahim Gambari, and addressed to Malami and the Minister of Transportation, Rotimi Amaechi.
Buhari, however, directed that the procurement process initiated by NPA be forwarded immediately to the BPP for action within 60 days to avoid further loss of revenue.
But in a statement on Tuesday, INTELS said that it has not received any notice of the termination of its service boat contract with the NPA.
The statement added that INTELS is relying on a freezing order issued by the Federal High Court, which confirmed the continuity of operations of the pilotage activity even after the expiration of the contract.
It stated that it does not consider the process of awarding the Pilotage contract closed, adding that its continuation in carrying out the contract is in the best interest of the NPA and the country.
The statement reads, “The reasons for this position are based on three fundamental points: the first is that INTELS is relying on a freezing order issued by the Federal High Court, which confirmed the continuity of operations of the pilotage activity even after the date of 8 August 2020, based on the clear wording of the agreement between the parties. It is also the subject of pending arbitration.
“This continuation is in the best interest of the country, the NPA and the managed clientele, especially given the ability of INTELS to oversee the pilotage districts/revenue centres for the NPA, thus guaranteeing the certainty of monitoring all the movements generated. This has resulted in a significant and constant financial benefit for the NPA.
”The second point, the statement added, was about the debt ratio between IINTELS/affiliate and the NPA. As is well known, INTELS/affiliate is owed over $700 million by the NPA, the repayment of which is guaranteed by the pilotage agreement through a mechanism of repayment of part of the revenues received by INTELS as agent and paid to the NPA.
“This mechanism has worked perfectly well even after August 2020 and therefore it is not clear why it should be discontinued, to the benefit of other competitors that have no claim on the NPA, placing the NPA itself in a state of default that is difficult to sustain before international markets, economic operators and stakeholders.“
It added, “The third, and perhaps most important point is that the NPA would receive an immediate benefit of $100 million from the proposed settlement by INTELS, a very substantial amount, as a result of the debt write-off that INTELS is prepared to grant to the NPA if the proposal is accepted.
“To this amount would be added approximately a further $300 million, representing a change in the current contractual debt interest rate of 6.5 per cent to 3 per cent per annum. That is, approximately $20 million per year for the 15 years set out in the settlement proposal.
“At this point the question arises, who takes responsibility at whichever level to waive an economic benefit of such magnitude that would provide an enormous boost to the NPA’s budget and resolve years-long dispute with costs and expenses that could be allocated to other initiatives? It remains to be seen whether common sense and the country’s interests will prevail in this case as well.”