Intels Seeks Amicable Resolution to Pilotage Contract Imbroglio

• Says $1bn loan will affect banking sector liquidity
  Company violated TSA policy, NPA boss insists
  Eromosele Abiodun in Lagos and Sylvester Idowu in Warri
• Following the controversy that trailed the cancellation of its pilotage services contract by the Nigerian Ports Authority (NPA), the management of Intels Nigeria Limited has said it will find an amicable resolution between it and the NPA, rather than going to court over the matter.

The company’s General Manager Legal, Mr. Mike Epelle, while giving an update on the matter yesterday in Lagos, said as a matter of policy, they would rather explore an amicable solution to the impasse.
This is just as he warned that the $1 billion extended to Intels by Nigerian banks was already raising dust in the financial services industry, adding that banks exposed to Intels will face a liquidity crisis if the matter is not handled with care.

He said its relationship with the NPA since 1997 has been beneficial to the federal government, adding that the NPA was only realising a paltry $6.7 million annually from the pilotage services before Intels came on board.
Intels, he disclosed, had since spent billions of dollars on the development of Onne Port and increased revenue from the pilotage services to over $200 million annually.

On the allegation that the firm refused to comply with the Treasury Single Account (TSA) policy of the federal government, Epelle said Intels never refused to remit revenue into the TSA, explaining that it did not want its commission of 28 per cent, as per the agreement, to be paid into the account.

He further explained that Intels was ready to pay NPA’s dues from the collection of the pilotage services into the TSA after its deductions for what NPA owes it would have been made, a suggestion NPA objected to, insisting that all collections must be paid to the TSA and after reconciliation, Intels will receive its commission from the ports authority.

Epelle said one of the reasons it hesitated to comply with the TSA was because its lenders had threatened to call back their loans if payments were made to the TSA, as this would have meant that they would had to wait for government bureaucracy to get their money back.
He also said there are clauses for dispute resolution in its agreement with NPA, adding that the agency did not follow the mechanism before terminating the contract.

Intels said: “We could pay into the TSA but not in the manner NPA wanted; we want to keep our commission and pay what is due to NPA. We told NPA to allow us comply with the TSA in such a way that it is objective and applicable.
“Before we took over the contract of the pilotage services, the government of Nigeria was losing billions of naira as a lot of ship owners evaded the payment of these dues and levies.

“The contract entitles us to monitor the movement of vessels that come and sail out of Nigeria. As vessels move in and out of the channels; they are expected to pay certain dues and levies. When NPA was doing it, they were not efficient and government was losing money.”
Epelle also faulted the interpretation of the contract by the Attorney General of the Federation (AGF), noting that the AGF does not have the authority to direct NPA to cancel the contract, as only a court of law has such authority.
Meanwhile, the Managing Director of NPA, Ms. Hadiza Bala Usman, yesterday said there was no political undertone in the termination of Intels contract at the ports.

She maintained that the company violated all laid down procedures and rules specified in the TSA policy.
Usman spoke with journalists in Warri after the NPA management meeting with the stakeholders of the Warri Port.
She dispelled rumours that Intels sanction was part of President Muhammadu Buhari’s political vendetta against Alhaji Atiku Abubakar, stressing that it was purely an administrative decision that followed due process and strict compliance with TSA guidelines.

She stated that contrary to speculations that the federal government was playing politics with the sanction, Intels management should be held responsible for playing politics with the sensibilities of all Nigerians as it deliberately frustrated all efforts and overtures made by the NPA board and the revenue authorities to make it comply with the TSA policy when it became fully operational by the government.

“It’s evident that Intels declined to comply with TSA, I’m sure you are familiar with it; it’s the TSA where all revenues generated by government are domiciled. It takes its root from the Constitution; Section 80 of the Constitution clearly provides that revenues should come to the government.
“Intels collects revenues on behalf of the NPA and has declined to accept that those revenues should be paid to the accounts of the federal government.
“We have been in dialogue with Intels from June 2016 to date and it has maintained that they will not make the payments to the TSA,” she said.

Usman said further: “The NPA felt the need to have this company comply and sought the opinion of the Attorney-General. The Attorney-General confirmed ab-initio that the contract is void because of the violation of Sections 80 and 169 of the Constitution, so there’s nothing political about it.
“Companies have complied, I do not believe there’s any company that is above complying with the constitution of the country it is operating in. The constitution clearly provides that, so why should any company feel it’s above the law? Putting political colouration is a way of distracting Nigerians.

“Primarily, the issue is complying with the TSA. We at the NPA have noted the concerns of Intels regarding efficient payment; bureaucratic processes may not permit NPA to pay them efficiently within the period they want, we’ve noted that concern and we have offered to Intels that we will give them interest on any delayed payments, we have said we will pay you within seven official days and if we do not pay you within this period, let us pay you an interest on delayed payment and Intels still declined and said they will not comply with TSA.
“They would rather collect all revenues to their account, deduct their own payment, deduct amortisation and give Nigerian government the balance. That’s not the way it should work,” she said.

Continuing, she said: “The structure should be that revenues are collected to the coffers of the government, to a TSA account that both Intels and NPA view so that it can permit Intels to see what revenue comes in. At the end of every month, there’ll be a reconciliation of what revenues have come in to the account and upon reconciliation Intels will provide the NPA with an invoice of their service fee, which is 28 per cent and NPA will pay them.

“Intels provides certificate and evidence of amortisation, NPA will pay them. Intels will provide the details of cost of funds and NPA will pay them. This is the structure as it’s provided and if there are any concerns on delay of bureaucratic process, we can pay interest on delayed payment, but they refused to comply so I’m curious as to what is political about that,” she said.
Speaking on the stakeholders’ meeting, Usman stated: “We came here to discuss with stakeholders to further partner and see how we can improve the Delta operations.

“We have briefed the stakeholders on the efforts that the authority has made in the provision of tugboats, provision of pilot cutters and also our intention to commence the dredging within the Escravos Bar.
“We have reached an advanced stage in our procurement process to enable us provide the dredging works and the navigational aid for Escravos Bar.
“This is why we are primarily here; to dialogue on how we can ensure that traffic comes to Delta ports and all the Eastern ports of the country,” she added.