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Intels: The long battle between FG, Atiku

Ex-Vice President Atiku Abubakar’s handing off of his shares from the lucrative oil industry logistics provider, Intels, is a culmination of years of long drawn…

Ex-Vice President Atiku Abubakar’s handing off of his shares from the lucrative oil industry logistics provider, Intels, is a culmination of years of long drawn battle between officials of the President Buhari administration and a man who has been the president’s fiercest challenger.

Since they parted ways not long after President Buhari came to power in 2015, the former vice president has been a trenchant opponent of the president, leading to a close chase between them during the last election.

Atiku announced his divestment from the company in a terse statement circulated by his media handlers early Monday. The statement signed by his spokesperson, Paul Ibe, said the former vice president had traded off his shares for $100 million. Ibe gave no further details about the transaction.

While the spokesperson was not forthcoming with details of the deal, he was clear about the reason behind the decision. He attributed Atiku’s action to allege persecution by the federal government, the action, he said, was threating the multi-million dollar business.

But the Nigeria Ports Authority (NPA), the federal government’s face in the long fight with the firm, insists that its stance was merely a corrective one, a move to change wrongs it claimed were done in the past so the government gets the best out of the deal. Another major leg of the squabble is NPA’s insistence that Intels complies with the federal government’s Treasury Single Account policy.

Down memory lane

Integrated Logistics Limited, Intels for short, has been in business since mid-1970s. But its reputation rose with fortune in 2006 after it was appointed as the concessionaire of Onne Port, Rivers State. At the time, Atiku was vice president and overseer of Federal Government’s privatization policy implemented by the Bureau of Public Enterprises (BPE).

Under the arrangement, Intels as agent of the NPA provides pilotage services to guide ships into and out of the ports. In return for the service, ship owners are required to pay a pilotage fee for all ships of 35 metres overall length. The amount is collected by Intels for sharing between the company, the Federal Government and the NPA.

In 2008, the then Minister of Transportation, Diezani Alison-Madueke, proposed giving Intels exclusive right to handle oil and gas cargoes. The minister’s circular also appointed Intels as managing agent in Lagos Pilotage District. But President Umaru Yar’adua shot down the proposal which he viewed as antithetical to competition in the industry.

In a policy reversal, the government under President Goodluck handed Intels exclusive control over all oil and gas cargoes at its terminals in Onne, Warri and Calabar. Angered by the decision, another major player in the oil and gas logistics, Ladol, went to court to challenge the action which it viewed as a desecration of the concession agreement it entered with the government.

With the coming of the Buhari administration, the Minister of Transportation, Rotimi Amaechi initiated a process to reverse the status conferred on Intels, in 2016, by writing to the president on the state of the Nigerian ports. One of the issues highlighted by Amaechi was Intels’ monopoly of the oil and gas pilotage.

Based on a legal advice from the Attorney-General of the Federation, Abubakar Malami, who described the exclusivity granted to Intels as “not only unknown to the shipping industry, it encourages monopoly and therefore inimical to the investment climate in the country”. President Buhari, in April 2017, approved the recommendations of the AGF for reversal of the exclusive handling of oil and gas cargoes at Intels controlled ports.

As a result, Ladol withdrew its suit against the Federal Government from the Federal High Court, Lagos. Intels however instituted a fresh suit challenging the decision.

The TSA saga

With the company still writhing from the pains of breaking off its monopoly on the oil and gas container pilotage, the NPA came back with more blows. This time, the ports regulator asked the firm to submit itself to the Federal Government’s Treasury Single Account (TSA) policy. The NPA argued that since it was collecting revenue on behalf of the government, the company must submit itself to government’s financial regulation. Intels, however, said it could not comply with the TSA policy because it had loan commitments with some commercial banks guaranteed by the deposits. But the NPA wrote back saying the government’s policy on TSA is “sacrosanct and must be complied with”.

The bickering soon snowballed into a full blown war of attrition, with each party throwing weighty allegations against the other. The NPA claimed Intels was indebted to it in Onne and Warri Ports in respect to rents, lease and throughput fees. The debt, the NPA revealed, was computed to the sum of $1.03 million (N316.60 million) for lease and throughput fees while debt owed by Intels in respect to rent at Onne was put at N3.343 billion.

In justifying why Intels should comply with the TSA, the NPA claimed that the company was keeping $68,499, 838 (N20.892 billion) belonging to NPA, and was unyielding to full accountability. In a bid to fight back, Intels wrote a letter to the Chairman Senate Committee on Marine Transport, claiming that the NPA owes it $840 million out of the $1.29 billion revenue it collected for the agency from January 2010 to September 30, 2016. It was becoming messy the National Assembly had to wade in.

On October 10, 2017, the NPA terminated its contract with Intels based on the advisory from AGF, who described the arrangement as misconceived and unconstitutional.

Intels, however, went to court challenging the decision of the NPA. This was yet another case in the long feud between the company and the NPA.

In August 2020, a Federal High Court in Lagos granted an interim injunction stopping the NPA from terminating the role of Intels as manning agent in the Pilotage Districts of Lagos, Warri, Bonny/Port Harcourt and Calabar.

The judge, Rilwan Aikawa, granted the interim injunction in the suit number FHC/L/CS/1058/2020 based on an application filed by Intels and Deep Offshore Service Nigeria Limited against NPA.

However, while the court was being awaited, the NPA, on September 1, issued a Marine Notice to the Lagos Pilotage District (LPD) asking ports users not to deal with Intels, saying services hitherto handled by Intels, have been terminated.

“NPA’s publication is highly selective, inaccurate and should be disregarded, as it seeks to circumvent legal due process. Indeed, a dispute has arisen over NPA’s right to terminate our role as managing agent in the Pilotage Districts of Lagos, Warri, Bonny/Port-Harcourt and Calabar. This dispute has been submitted to arbitration, and the arbitral proceedings have already commenced,” Intels wrote in a forceful rebuttal,” it said.

With Atiku now out of the picture, it will be interesting to see how the relationship between the NPA and Intels unfolds. Perhaps the olive branch waved by Intels major shareholder, Gabriele Volpi, in October 2017, will now get a welcoming hand.

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