BusinessDay 25 Oct 2017

Wednesday 23 October 2017
maritime
Shipping Logistics Maritime e-Commerce
19
BUSINESS DAY
business
Why FG must intervene in NPA, INTELS
contract rift - stakeholders
…Niger-Delta youths slam NPA for putting over 10,000 jobs at risk
Stories by
Uzoamaka Anagor-Ewuzie
Stakeholders have
condemned the actions
of the management
of the
Nigerian Ports Authority
(NPA), which led to
the termination of the pilotage
agency service agreement
it had with one its joint
venture partner, INTELS Nigeria
Ltd.
According to them, the
cancellation of the rewarding
contract, signed in 2010 with
INTELS, does not only put
thousands of jobs at risk, but
also puts investor confidence
and Nigeria’s credit ratings at
stake before the global business
community.
In 2010, the oil and gas logistics
firm was contracted by
NPA to provide boat monitoring
and supervision services
on behalf of NPA and collect
revenue on its behalf, at 72:
28 percent sharing formula.
Here, NPA earned 72 percent
of the revenue while the remaining
28 percent went to
INTELS.
To implement the contract
due to elapse in 2020, INTELS
entered into loan agreements
at the tune of $1.4 billion
(N428.4 billion), with several
Nigerian banks based on the
understanding that the debt
would be offset from monies
realised from the execution of
the contract, which was paid
directly to the banks.
Surprisingly, the NPA two
weeks back announced the
termination of the contract.
Defending the decision, Hadiza
Bala-Usman, managing
director of the NPA, said that
her management terminated
the contract, due to the refusal
of INTELS to pay revenue
generated from into the treasury
single account (TSA).
Reacting to this, Chizi
Amadike, national coordinator
of the Niger Delta Youths
Coalition (NDYC), alleged
that given the same circumstance,
in a location like Kaduna,
Bala Usman would have
acted differently.
Amadike, who appealed to
President Muhammadu Buhari
to intervene in the mess
to save the jobs of many Niger
Delta indigenes, especially
Rivers State youths, said that
the company employs over
10,000 people, whose jobs are
currently at risk.
“There is no job in Nigeria.
Companies in the Niger Delta
are packing up yet the likes of
INTELS which have remained
are being persecuted for no
just cause. We know President
Buhari is being misled by the
‘Cabal’, so we are now calling
on him to intervene to save
jobs. Persecution of INTELS
is not good for Rivers State,
Niger Delta and Nigeria,” he
pleaded.
Similarly, the Ijaw Youth
Council Worldwide (IYC)
called on NPA to peacefully
resolve its differences with
INTELS.
Daniel Dasimaka, IYC
spokesman said in a statement
that the NPA decision
to terminate its contract with
INTELS would have negative
impact on the economy
of Onne, Rivers State, Niger
Delta and Nigeria, as it would
lead to loss of jobs and income
for families.
Dasimaka said, “We are
calling on the management of
NPA and the Federal Government
to rethink their decision.
Today, thanks to Intels, the
Onne Port is about the only
Port in Nigeria outside Lagos
that is viable. Thus, any attempt
to stifle Intels is considered
an attempt to cripple the
port at a time we are expecting
the Federal Government to
ensure the viability of seaports
in other parts of the country to
de-congest Lagos Ports.”
BusinessDay heard from
a liable source that Nigerian
Banks exposed to INTELS’
multi-billion dollars contracts,
were already getting
panicking over the fate of
their exposure to the company.
This is because given the
revocation of the contract,
the outstanding loans to the
banks are likely to be classified
as non-performing and it
could lead to several job losses
in banks as well.
Examining the milestones
recorded by INTELS at the
cause of implementing the
contract, it was discovered
that before INTELS took over,
NPA used to earn few thousand
dollars per month and
a little above $6 million per
annum but today, INTELS
has up the revenue profile
from the service to over $200
million per annum.
However, contrary to NPA’s
accusations that the execution
of contract and revenue collected
has been shrouded in
secrecy, it was also discovered
that it was NPA that used to
raise the bills shipping companies
pay as pilotage charges.
This is owing to the fact that
the contract agreement does
not empower INTELS to write
bills and both parties also do
reconciliation at the end.
Though, increase in vessel
calls to the ports helped
the revenue growth, but in
Investors urged to buy into opportunities in blue economy
Dakuku Peterside, director
general of the
Nigerian Maritime
Administration and
Safety Agency (NIMASA), has
called on Nigerian investors
to key into the opportunities
in the nation’s blue economy,
which is now the world’s fastest
growing sector that has
enormous potentials.
Peterside, who made this
appeal at the just concluded
23rd Nigerian Economic
summit (NESG) themed “Opportunities,
Productivity and
Employment: Actualizing
the Economy Recovery and
Growth Plan,” said that the
length of the nation’s coastline
and the attendant volume of
maritime trade provide Nigeria
an advantage as a developing
nation.
However, he stated, that
stakeholders must actively
participate in the sector in
order to reap its benefits.
executing the contract over
the years, INTELS was able
to put down strict monitoring
platforms and equipment to
block revenue leakages and
ensure that all shipping companies
pay their dues without
short-changing government.
Industry close watchers
alleged that it was either the
NPA may be “dancing to the
tune of some unpatriotic
Nigerians, whose intentions
were to short-change government
or that the authority
was acting according to the
dictates of people interested
in taking over the juicy contract.”
Going down the memory
lane, it would be recall, IN-
TELS is being owed by NPA
at the tune of over $1 billion
L-R: Fola Rogers-Saliu, executive director, Human Resources and Administration, SIFAX
Group; Kehinde Sunmonu, special duty manager, SIFAX Group; Oby Ezekwesili, former
Minister of Education and former vice president of the World Bank (Africa region); Phil Ofulue,
former executive director, Human Resources and Admin, SIFAX Group and Yetunde Okunade,
manager, Business Development, SIFAX Group at the Nigeria-South Africa Chamber of
Commerce special monthly breakfast meeting to commemorate its 25th anniversary held in
Lagos, recently.
“Developing the blue
economy is paramount
across the globe now, and
the public and private sectors
have to collaborate to sustainably
harness the potentials
of our maritime sector
for the benefit of the Nigerian
economy especially in the
wake of the Federal Government’s
economic diversification
drive,” he said.
The NIMASA boss, who
was quoted in a statement
signed by Isichei Osamgbi,
head, Corporate Communications
of the NIMASA, also
said that it was high time Nigerians
begun to tap into the
opportunities embedded in
the maritime sector, adding
that economies of countries
like Singapore, Ukraine and
South Korea thrives on the
activities of their maritime
sectors.
Peterside, however, pointed
out that an improved maintenance
culture, adequate data
management and statistics as
well as articulated actions from
stakeholders backed up with
political will, can make Nigeria
a leading light in the comity of
maritime nations.
Peterside further advocated
for synergy among stakeholders,
stating that NIMASA
with the support of the Federal
Government is working assiduously
to ensure that Nigerians
reap the benefits that are
dollars for projects executed
on their behalf. However, few
months back it was learnt that
the current management of
NPA wrote to INTELS, acknowledging
NPA indebtedness
to the logistics firm at the
sum of $700 million.
According to NPA, issues
concerning the contract
started when Bala-Usman
insisted that INTELS must
pay in the proceeds from
the contract into the TSA
account, which INTELS argued,
saying that, TSA, which
was not part of the initial
agreement, would introduce
bureaucratic bottleneck that
may jeopardise the loan
agreement, which it entered
into with the banks.
However, both parties
accused one another of deliberately
frustrating attempts to
address the issues raised by
introduction of TSA, which
was not there in 2010, when
the agreement was signed.
Consequently, stakeholders
including House of Representatives;
Maritime Workers
Union of Nigeria (MWUN);
the Maritime Energy Media
Practitioners of Nigeria
(MEMPON); the National
Council of Managing Directors
of Licensed Customs
Agents (NCMDLCA); the Nigerian
Importers Integrity
Association (NIIA) and others,
have condemned the cancellation
of the contract due to
its negative impact on jobs,
foreign direct investment and
the economy.
Therefore, the Presidency
needs to intervene by directing
NPA to go back to the
contract, which specified the
procedure for dispute resolution
and in this case, NPA
and its JV partner ought to be
undergoing peaceful arbitration
process that would help
to resolve the issue amicably,
and not outright revocation.
bound in the sector.
He also said that the newly
approved maritime security
architecture will effectively reduce
piracy and other related
sea crimes to ensure safety of
shipping.
The Nigerian Economic
summit serves as a platform
where stakeholders from both
public and private sectors can
converge to chart a way forward
for the development of
the Nigerian economy.