Fifty-two days after President Muhammadu Buhari directed the Ministry of Transportation to conclude the Boat Service Agreement initiated by the Nigerian Ports Authority (NPA) to halt revenue loss by the government, the process still hangs, investigation by Daily Trust has revealed.
The president had directed the procurement process to be forwarded to the Bureau for Public Procurement (BPP) for evaluation and eventually presented before the Federal Executive Council (FEC) for approval. He said all processes should be concluded within 60 days.
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Buhari’s directive was contained in a letter from the Chief of Staff to the president, Prof Ibrahim Gambari dated 7th January, three months after a Daily Trust report about how horse-trading around the lucrative contract previously handled by INTELS Nigeria was causing revenue loss to the country.
This paper also reported about the initiation of a fresh process to re-award the project to INTELS after the company was disqualified from the process.
President Buhari, in the January 7 letter, cancelled the approval for the re-award to INTELS and directed the conclusion of the process started by the procuring entity, the NPA.
But a week to the expiration of the 60 days window given by the president, Daily Trust reliably gathered that the process was yet to kick off.
Sources at the BPP said they were yet to get communication to that effect from the Minister of Transportation, Rotimi Amaechi, who was directed to conclude the matter.
The president’s reversal of his initial approval to the Federal Ministry of Transportation to proceed with the renewal of the INTELS contract is informed by the recommendations of the Attorney General of the Federation and Minister of Justice, Abubakar Malami, the BPP and the Infrastructure Concession Regulatory Commission (ICRC).
In his legal opinion to the president, the AGF said that the information relied upon by the president in giving the initial approval was not sufficient.
Malami in his 8-page submission dated 18 November 2021, noted that from the review of additional documents submitted to it by the NPA, it was obvious that the NPA neither suspended nor terminated any of its contracts with INTELS, which therefore obviates the need for any restoration.
The Attorney General further reiterated the potential exposure of the NPA and indeed the federal government to litigation because of the restoration of the contract between INTELS and NPA.
The president in his directive to the ministry emphasised the need to ensure that the process was concluded in 60 days to avoid further loss of revenue.
However, barely 7 days to the expiration of the President’s 60-day directive, Daily Trust sources at the Bureau for Public Procurement confirmed that they have not received any such communication from the Ministry of Transportation.
The attempt to reach the transportation minister was not successful as he did not return the messages to his phone.
The Director of Press, Federal Ministry of Transportation, Mr Eric Ojiekwe, did not answer calls placed on his phone. He also did not respond to SMS enquiry on the matter.
How FG lost N116bn in two years to stalled contract
Daily Trust investigation had earlier revealed that the federal government lost over N58 billion as the average of what would have accrued to the federation from the contract of service boat operations monitoring agents in four pilot districts in 2020, which translates to N116bn for two years (2020 and 2021).
Revenue documents generated by the NPA on service boat operations as sighted by this newspaper indicated that between 2017 and 2019, the Onne pilotage delivered N98.2billion (240 million USD).
The Warri pilotage area generated N116.3 billion ($284 million) between 2014 and 2018, while the Calabar pilotage area brought in N644.5 million ($1.6 million).
Prequalified bidders write Buhari, seek conclusion of process
Daily Trust reporter also sighted a letter from the counsel to the prequalified bidders to President Muhammadu Buhari dated 23rd February 2022 urging further intervention by the president to finalise the procurement process.
The letter from Akinlawon and Ajomo signed by Titilola Akinlawon (SAN), noted that a further delay in the completion comes at a great cost to the federal government with over $100 million of revenue lost by the NPA every month.
“The delay has also come at a significant cost to our client as they have commenced mobilisation of personnel and other resources essential for the provision of service boat operations managing agents,” Akinlawon added.
Recall that the counsel had earlier served a pre-action notice on NPA due to their failure to conclude the procurement process, informing them of the prequalified candidates’ intentions to seek legal redress.
How the crisis started
The contract between NPA and INTELS for providing the authority with the service for monitoring boats expired in August 2020. The contract, which commenced in 2007 lasted for 13 years.
The NPA is one of the major sources of revenue for the federal government, a development that attracts attention and interest from investors and other stakeholders.
In line with the Public Procurement Act, the NPA in December 2019 initiated a public tender to engage a company to provide the service at four pilotage districts.
In the tender document sighted by our reporter, the NPA reduced the commission due to the agents from 28 per cent of all revenues collected to 15 per cent. During the active period of its contract, INTELS was collecting 28 per cent of total accruals as agency commission.
But the NPA was not comfortable with this arrangement, a development which among other issues pitched it against INTELS.
The NPA noted that the reduction of the commission was to maximise revenue going to the authority and in turn the federal government, in addition to keeping with best practices for agency commissions of such services, which were typically not above 15 per cent.
INTELS and others submitted their bids to qualify for the tender. The NPA in a letter to President Muhammadu Buhari noted that INTELS violated one of the criteria advertised and was disqualified. The tender process continued and four companies with the highest scores were pre-qualified.
The four companies selected out of the 32 that applied to man the four pilotage districts were; Pacific Silverline Ltd. (Warri District), Isasha Investment Ltd (Calabar), ICA Logistics Ltd (Lagos) and Nexttee Oil & Gas Trading Company Ltd. (Onne/Port Harcourt).
Daily Trust had reported that the four companies were yet to be issued with letters of engagement as a result of horse-trading and legal battles, making government lose billions of naira.
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