The Nigerian government granted an extension to the boat service contract it entered with Intels Nigeria Limited as part of efforts to stop revenue leakage and improve the inflow of foreign exchange into government coffers, sources familiar with the matter told this newspaper on Saturday.
The government through the Nigerian Ports Authority (NPA) officially granted an extension to the contract following presidential directives and court consent judgment.
The NPA had in September 2020 announced the termination of the boat operation contract, directing all service boat owners and operators to do transactions directly in each port complex of the NPA.
But a Federal High Court in Lagos granted an interim injunction, preventing the termination of Intels’ role as a managing agent in various Pilotage Districts. The injunction was issued in response to a suit filed by Intels and Deep Offshore Service Nigeria Limited, seeking to continue their duties pending the resolution of arbitration proceedings.
After prolonged negotiations and deliberations, the NPA on Thursday announced the extension of the contract through a memo addressed to all shipping companies and signed by the Ports Manager, Lagos Port Complex, Charles Okaga.
In the statement titled ‘Reinstatement of Intels Nigeria Limited as the authority’s service boat operations monitoring provider in the pilotage district’, the NPA said the move aims to bolster revenue generation from Service Boat Operations, aligning with both the agency and federal government’s objectives.
In accordance with the terms outlined in the Managing Agency Agreement, Intels Nigeria Limited has received a directive to promptly resume services. The company is expected to operate as the managing agent for Service Boat operations in the Lagos Pilotage District (LPD).
The new directive urged shipping companies to provide unrestricted access to information on pilotage movements for Intels, in addition to provision of necessary assistance for a seamless commencement of operations.
Why FG rehires Intels
Sources within the NPA told our correspondent that the new resolution was reached against the background of the Onne Port construction deal struck by the NPA and Intels. Those familiar with details of the deal said Intels agreed to construct the port and shore up finances with revenue generated from its boat contract with the NPA.
But trouble started when, in September 2020, the management of the Nigerian Ports Authority (NPA) terminated the boat operation contract being handled by Intels Nigeria Limited, INL. In a marine information notice dated September 1, the Lagos Pilotage District (LPD) of the NPA said the service, hitherto handled by Intels, had been terminated and consequently directed all service boats owners and operators to do transactions directly in each of the Port Complex of the NPA.
The termination notice at the time heightened the lingering tension between NPA and Intels.
Meanwhile, sources told our correspondent Saturday that upon the termination of the contract by NPA, the Nigerian government recorded heavy revenue losses from the operations as officials who took over from Intels had no capacity to operate the contract. A source told this newspaper that from about $200 million, the annual revenue fell to about $50 million.
Upon assuming power on 29 May, the Bola Tinubu administration assigned officials to look into areas of revenue leakages and the boat contract was listed among strategic areas in which the government has been losing massive revenue, sources told PREMIUM TIMES.
As part of its conflict resolution mechanisms and revenue generation efforts, the government called for negotiation based on prevailing agreements and the boat service contract was extended.
However, details of the court consent judgment remain unclear as of press time Saturday evening.
The new resolution brings fresh insights into the long-running battle between Intels and NPA.
The Nigerian government had moved against Intels, which was then partly owned by former Nigerian vice-president, Atiku Abubakar. The company was founded over three decades ago by Gabriele Volpi, an Italian national who also has Nigerian citizenship, and Abubakar was a minority shareholder.
Earlier in April of that year, President Muhammadu Buhari had approved the recommendations of the Attorney-General of the Federation, Abubakar Malami, breaking Intels’ near-monopoly in the handling of oil and gas cargoes in the country.
Abubakar later sold his interests in the company through a series of transactions in 2020. An official said at the time that the former Nigerian Vice President exited the company with his family in a series of deals that began in December 2018.
After NPA terminated Intels contract in 2017, it kickstarted a procurement process to hire new contractors for the project. But more than five years after, the process is yet to conclude.
Government insiders said the Bureau of Public Procurement (BPP) recently recommended four contractors for consideration, one each for Lagos Pilotage District, Warri Pilotage District), Bonny/Port Harcourt Pilotage District) and Calabar Pilotage District.
With the decision to rehire Intels, it does appear the government has abandoned that procurement process.
“The procurement process did not conclude,” an official of the Tinubu administration told our correspondent. “No one was issued award letter. Contract awards of that magnitude only concludes when approved by the Federal Executive Council, letters of awards issued to contractors and agreements signed by parties. The BPP recommendations did not make it to FEC. Tinubu is desperate for revenue, especially in foreign currency.”
