Why Tinubu Govt Restored Boat Service Contract To Intels – NPA

The Nigerian Ports Authority (NPA) has disclosed the main reason the Bola Tinubu government restored the service boat monitoring operation to Integrated Logistic Services Nigeria Limited (Intels).

Recall that reports had emerged claiming Tinubu had acquired shares of Intel and awarded contracts to the firm. Another report claimed that former Vice President Atiku Abubakar still remained a shareholder of the logistics company.

In a statement on Sunday, the NPA said the government restored the boat service contract to Intels after a huge revenue was lost in the period the agency took over the management of pilotage.

The authority stated that the agreement reached with Intels was done in the national interest, adding that revenue generation will increase due to the effort.

It added that Intels Nigeria Limited waived $193 million as part of efforts to resolve the stalemate on the pilotage contract with the federal government.

The NPA further stated that Nigeria will save $326.895 million from its agreement with Intels on the contentious pilotage contract.

The statement reads: “After the expiration of the Service Boat Management Agreement, the authority took over the performance of the service through various Departments and Divisions. However, due to the constraint of not having the requisite technology to monitor the operations, the expected revenue dwindled, which resulted in a drastic reduction of revenue generation for the Authority.

“An analysis of its impact on the authority’s revenue showed a sharp decline from $216million and $209 million in 2014 and 2015, respectively, under INTELS agency to $130 million and $99 million in 2020 and 2021, respectively, after taking over by NPA. The situation in 2023 is even worse as the collection up to June 2023 was only $55.3 million.”

Giving a breakdown of the agreement, the NPA said it agreed on a waiver of the sum of $100,000,000 being part of the accrued interest as of 31st July 2023 on the indebtedness to Deep Offshore Services Limited under the Phase 4B agreement.

It added: “A further waiver of the interest accruing on the outstanding debt under the Phase 4B Agreement for the period of two years commencing from 1st of July 2023 and ending on the 30th of July, 2023, which is estimated in the sum of $93,317,556.

“Reduction of the interest rate on the indebtedness to Deep Offshore Services Limited from 6-months LIBOR rate + 6.5% to 6-months SOFR rate + 3% effective from the date of execution of Supplemental Agreement. The Authority will be saving a total sum of US$ 326,895,226 as a result of the waiver of part of accrued interest and reduction of interest rate from 6.5% to 3% on the debt over the next 15 years.

“Reduction of the agency commission on Pilotage collections from 28% to a lower commission of 24.5% as opposed to increasing it due to astronomical rise in the cost of operations. The proposed spread of the debt of $522,433,453.25 to be paid back over a 15-year period will, of itself, earn for the Authority a huge benefit in terms of preservation of funds to meet its other operational needs over the period.“