Intels Nigeria Limited, INL, on Wednesday kicked against the
termination of its Pilotage Agency Agreement by the Nigerian Ports
Authority, NPA.
In its reaction on Wednesday, the company described the action as “preposterous” and highly injurious to Nigeria.
The company was reacting to decision of the NPA to terminate the
agreement between the agency and Intels, several months after both
parties had disagreements over the company’s operations in Nigerian
ports.
On June 27, PREMIUM TIMES exclusively reported how the Nigerian
government was making moves against the operations of Intels, partly
owned by former Nigerian vice-president and a chieftain of the ruling
All Progressives Congress, APC, Atiku Abubakar.
The company was founded over three decades ago by Gabriele Volpi, an
Italian national who also has Nigerian citizenship, and former
Vice-President, Mr. Abubakar.
Earlier in April, President Muhammadu Buhari had approved the
recommendations of the Attorney-General of the Federation, Abubakar
Malami, breaking the near-monopoly of Mr. Atiku’s Intels in the handling
of oil and gas cargoes in the country.
But on September 27, Mr. Malami, wrote to the Managing Director of
NPA, Hadiza Bala-Usman, directing her to terminate the boats pilotage
monitoring and supervision agreement that the agency had with Intels,
saying that the contract was illegal.
According to THISDAY newspaper, Mr. Malami in the said letter had
stated that the agreement which had allowed Intels to receive revenue on
behalf of NPA for 17 years, was in contravention of the Nigerian
Constitution, especially in view of the implementation of the Treasury
Single Account (TSA) policy of government.
But Intels, in a statement on Wednesday, disclosed that following the
letter from the Mr. Malami, directing NPA to terminate the pilotage
agreement, NPA promptly ended the contract on October 10, without
inviting it as the other party to the agreement for negotiation.
It also alleged that the NPA acted without due recourse to the terms
of the agreement that specify conditions precedent before a party can
exit the contract.
Based on the directive, Intels stands to lose several millions of
dollars in commissions for the monitoring and supervision pilotage
services it handles on behalf of NPA on Nigerian coastal waters.
Mr. Malami, in the letter, made it expressly clear that the agreement
violated Sections 80(1) and 162(1) and (10) of the constitution, and
wondered that both NPA and Intels did not avert their minds to the
relevant provisions when they were negotiating the agreement in 2010.
But in its reaction on Wednesday, Intels argued that the termination
of the agreement which was conveyed to the firm in a letter signed by
the NPA boss on Tuesday, was “clearly preposterous and the consequences
highly injurious” to the interests of Nigeria.
In a letter signed by a Director of Intels, Silvano Bellinato, the
logistic firm said the action by NPA would force it to reconsider its
multi-billion dollar investment at the Badagry deep seaport in Lagos,
adding that the investment would have created thousands of direct and
indirect jobs for Nigerians.
It explained that it had invested too much in the country and if the
Nigerian government was not prepared to respect the sanctity of its
contract, it would resort to the courts to challenge NPA’s action.
The company, therefore, gave NPA seven days to reconsider the
decision, look into the critical areas of their relationship and to
agree on a common solution.
According to the company, the NPA’s failure to address its concern shall lead to arbitration.
The company also alleged that the NPA was indebted to it to the tune of hundreds of millions of dollars.
“Nigerian Ports Authority (NPA) acknowledged a debt towards Intels
Nigeria Limited (INL) in the sum of 674,767,415.00 US$ (in addition to
the interests accrued in the meantime),” it said.
PA communicated the need to reconcile the sum of 109,000,000.00 US$
for the additional works carried out; NPA informed INL about the
implementation to be discussed in respect of a ‘transit account’ called
NPA service boat revenue collection account domiciled at one of the
banks indicated by you and the related standard operating procedures
(SOP); NPA confirmed 28% agency commission to INL and the 72% balance to
be shared between NPA and INL in the ratio 30:It stated further: “On March 27th 2017, we replied to every point in
your letter of 15th March as stated below: INL took note of NPA’s
acknowledgement of debt; INL declared availability to meet NPA in order
to discuss the details for the certification of the 109,000,000.00 US$
for the additional works ca“INL requested for postponement of the SOP application. On April 19th
2017, NPA acknowledged our acceptance of NPA’s proposal in respect of
28% agency commission (already included in the existing running Agency
Agreement) and in particular to the 30% – 70% split, respectively to NPA
and INL, related to the 72% balance. This would imply that the 30% is
to be remitted on a monthly basis to NPA while the 70% is to be applied
towards reducing the indebtedness to INL.
“Regarding the TSA application, NPA reiterated the strategic
importance of such a request. However it is noted that TSA was not part
of the existing agency agreement between the parties.”
Meanwhile, the company said that on May 5, it replied NPA’s letter of
April 19 proposing the opening of a jointly signed account between INL
and NPA in which the boat service revenues would have been directed.
Mr. Bellinato explained that: “Afterwards the account holders, with
relative proxies, would remit the respective portions due to the
parties, being 30% in favour of NPA and 70% in favour of INL.
“In the same letter we indicated our availability to identify the
bank, from among the ones indicated by NPA; regarding the reasons of our
proposal we firmly reiterated the precariousness of our financial
status, mainly attributable to the credits towards NPA and heavily
financed by various credit institutions.
“Such circumstances rendered alternative solutions to the ones
suggested by us unviable, and also taking into consideration the
inapplicability of TSA to running contracts in the manner proposed by
NPA.
“Clearly, deduction of entitlements due to INL from collections under
the Agreement, and payment of the balance into the designated NPA
account for TSA purposes, would be in compliance with the TSA policy.”
The logistic firm also maintained that the decision by NPA to
terminate the Agency Agreement, which was totally unexpected in
consideration of the meetings held by the parties and exchange of
letters, was clearly preposterous and the consequences highly injurious
to the interests of the company.
“Hence, in compliance with the Article 12 of the Agency Agreement
between the NPA and INL, we hereby request you to schedule a meeting
within seven days from the date of this letter, in order to analyse the
residual critical areas of our relationship and to agree, to the
possible extent, on a common solution.
“Should this not happen, we hereby notify you that, in accordance
with Article 13 of the Agreement, we will refer the matters to
arbitration, in order to safeguard our company from the significant
damages and other adverse consequences that may result from this rather
unbecoming decision,” it said.