Contract Breach: Trouble Brews over FG’s Inconsistent Policies, Duplication of ICTN Contract

•As FG, firm set to lose over $2.3bn due to contract repetition 

•May lead to avoidable legal battle

Wale Igbintade

A major scandal is brewing over federal government’s inconsistent policies, and duplication of contract already awarded by the previous government of Muhammadu Buhari for the International Cargo Tracking Note Scheme (ICTN).

On July 13, 2024, the Federal Executive Council, chaired by President Bola Tinubu, approved a contract to procure advanced solution technology in the Nigerian oil and gas sector, thereby re-awarding an already existing contract.

The Minister of State for Petroleum, Heineken Lokpobiri, announced the deal at a press briefing, saying it will enable the country to track every cargo of crude oil loaded in Nigeria up to its destination.

The project is expected to install the necessary on and offshore flow metres in all of the country’s exporting points. This, the minister said, “will significantly curb oil theft and diversion, ensuring that our revenues are protected.”

The contract was awarded to P-Lyne Energy Limited and is expected to be completed in 180 days.

However, official documents available to THISDAY revealed that in March 2023, under former President Buhari, the federal government awarded similar contract for the cargo tracking system to a consortium of 5 companies comprising  Messrs Antaser Afrique Bvba Belgium/Antaser Nigeria Limited, Messrs Velocity Logistics and Marine Services Limited, Messrs Sahams Crystals Investment Limited, Messrs Winslow Logistics Limited and Messrs Equal Logistics Limited for a period of 15 years on “No cure No Pay’ basis with a revenue sharing ratio of 60:40% accruable to the Federal Government of Nigeria and the consortium respectively.

This contract was to be fully funded by the lead partners (Antaser Nigeria Ltd/Antaser-Afrique Bvba) at zero cost to the federal government, and a commitment by Antaser Nigeria Limited to “procure and install” the necessary on and offshore flow metres in all of the country’s exporting points.”

The whole essence of engaging an independent firm to monitor all imports and exports, including crude oil exports is to introduce transparency, accountability, check and balance, and to obtain accurate trade data in all cargo movement in Nigeria, as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and Nigerian Custom Service lacked the needed capacity to monitor themselves.

But, in breach of the procurement laws and another effort to sabotage the already existing contract, the Nigerian Customs Service (NCS) introduced their own form of ICTN, called “Advance Ruling system’’. Whereas, it is the sole reasonability of the Ministry of Marine and Blue Economy to monitor movement/ transportation of cargo via water within the country.

Also, the Bureau of Public Procurement (BPP), a letter dated June 7, 2024 directed the Ministry of Petroleum and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to ensure that no other government agency is undertaking a similar assignment particularly the Advanced Cargo Tracking note under the defunct Federal Ministry of Transportation

The letter tagged, “Due Process Review Report for Procurement of Pre Field-Development Studies for Advanced Declaration Solution Technology, sighted by THISDAY, said “Due Process Certificate of ‘No Objection’ cannot be granted to the Ministry of Petroleum/ Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for the award of contract for procurement of Pre Field-Development Studies of Advanced Declaration Solution Technology (ADST) in the Nigerian Oil and Gas Upstream Sector in favour of Messrs P-Lyne Energy Limited in the tender sum of US $2,687,625.35 inclusive of 7.5% VAT and 180 days completion period. The position is supported by Section 16 (18) of the PPA, 2007.”

The letter, signed by BPP Director-General, Mamman Ahmadu, further stated: “However, in the strength of submission by the NUPRC and in order to ensure value for money, Due Process Certificate of ‘No Objection’ can by granted to the Ministry of Petroleum/ Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for award of Contract for Procurement of Pre Field-Development Studies of Advanced Declaration Solution Technology (ADST) in the Nigeria Oil and Gas Upstream Sector in favour of Messr P-Lyne Energy Limited in the reviewed of US$2,278, 050.35includive of 7.5% VAT and 180 days completion.”

However, a similar contract had been awarded by the Buhari-led government which the present administration deliberately ignored.

It remains unclear why the Tinubu-led administration awarded a duplicate of this contract to P-Lyne Energy Limited, while the same contact awarded to Antaser Nigeria Limited has not been annulled.

To those familiar with the issue such contradictions by the federal government are some of the serious obstacles to Nigeria’s economic growth and is often cited by domestic and foreign investors as a significant barrier to doing business.

Recently, a non-government organisation, Citizens Advocacy for Social and Economic Rights (CASER), condemned the new oil and gas metering contracts awarded by presidency, saying the procurement blatantly undermines Nigeria’s national interest and reeks of high-level corruption.

In its statement, CASER said the two recent contracts awarded by President Tinubu are clear duplication of services that are meant to be at a total zero cost to the Federal Government of Nigeria under the implementation of the ICTN.

“It is important to question why the Nigerian Shippers Council and the Honorable Minister of Marine and Blue Economy have not activated the existing contract with the Antasser-led consortium, instead, they have allowed for duplication of the same contract to another agency of the same government,” the group said.

Already, most West African countries are implementing International Cargo Tracking Notes (ICTN), while Nigeria is now the continent’s gateway for dumping all manners of illicit trades such as arms and drugs as well as contrabands for onward land transportation to other countries.

Just recently, the federal government declared a state of emergency at the Onne Port in Rivers State following the repeated incidents of importation of dangerous cargo, including arms and ammunition through the port.

According to the Comptroller General of Customs, Bashir Adeniyi, the recurring incidents pose a threat to national security and the health of citizens as the Onne Port is increasingly being used as a destination for dangerous and illicit cargo, describing it as a disturbing trend which he said also posed a threat to the health of citizens.

“Recent intelligence and seizures have revealed a disturbing trend; Onne Port is increasingly being used as a destination for dangerous and illicit cargo. The scale and nature of these illegal importations pose a significant threat to our national security and the health of our citizens’, Adeniyi lamented.

Many keen observers are worried that re-awarding ICTN contract will no doubt damage the sanity of the nation’s procurement process and make a mockery of presidential approvals.

They believe it will also lead to further investor apathy, not to mention of another protracted legal battle which may further delay the implementation of the ICTN scheme, leading to huge revenue losses and heightened insecurity in Nigeria.