The sudden termination of the 17 years pilotage monitoring and supervision agreement with leading maritime logistics firm, Integrated Logistics Services Nigeria Limited (Intels), by the Nigerian Ports Authority’s (NPA) is still trending and causing disquiet both within and outside the maritime industry.
In the wisdom of the federal agency and regulator of shipping and related ports activities, it struck on the ground that Intels failed to comply with Treasury Single Account (TSA).
First statement by the NPA, maintained silence over several ongoing meetings with Intels on figures reconciliation and averred that the agreement was suspended based on the advice of the Attorney General of the federation.
Though this singular revelation technically suggests that an upper body may have been interested in the matter, experts in maritime economics, federal lawmakers and Nigerians are beginning to review the negative impacts of the action at a time the economy is struggling to stabilize, diversify and grow.
Analysts say the boat pilotage agreement which was made in 2010, has generated thousands of jobs for Nigerians; and a shutdown would not only cause suffering and disappearance of food on the tables of thousands of Nigerian employees, but those of the several companies that service the agreement as they may also close down and lay-off Nigerian Workers.
Apart from loss of hard to find jobs, there are trending indications that the termination of the agreement will scare away investors.
It would be recalled that International Container Terminal Services Inc. (ICTSI), which had an issue with the same NPA at the Lekki Free Trade Zone, left the shores of Nigeria in anger over delays in processing of documentations and today, it has invested millions of dollars in Kinshasa Port of Congo, creating wealth and jobs for that economy.
According to Dr. Ken Igboanugo, the key role of NPA as a shipping industry regulator and money making machine for the government in that sector is to always create attractive conditions that will be attracting investors and not issues capable of scaring away investors or suppressing thriving local operators.
Besides, it is a well known fact that Intels isn’t the only company collecting revenue for federal government and will not be
For example, IRS uses consultants. Commercial banks collect stamp duties on behalf of govt. Commercial airports are concessioned
Another very important issue that needs to be considered by the federal government and the NPA in this matter is the fact that Intels took loans to facilitate the contract and a cancellation of the agreement will hamper its debt service obligations at a time nonperforming loans are squeezing the banking sector.
Again, in her media chat earlier in the year at Eko Hotels, the managing director of NPA, Hadiza Usman, told the Press that she is yet to recover all the agency’s money meant for TSA at Heritage Bank even though the Central Bank if Nigeria (CBN) has welded in.
Today, the bank has not transferred the whole fund and there has been no express advice from the Attorney general of the Federation to that effect.
the agreement termination will further generate crisis in the capacity of commercial banks to provide loans for business investments.
More developments that will be hampered include the upcoming Badagry Seaport Project which will help the Ease of Doing Business Initiative of the federal government as this singular act may lead to its abandonment by Intels. The company already employs more than 10,000 Nigerians directly and additional multiple thousands indirectly.
On the other hand, pundits are already worried if a government that is driving and promoting public-private partnership (PPP) and job creation can also be the one killing private businesses and making Nigerians lose jobs?
No doubt, the cancellation will lead to loss of revenue to the federal government as vessels will patronize cheaper service providers and make fewer returns.
Another major loss which will trigger collapse in already growing and consolidating Small and Medium Enterprises (SMEs) driven by Intels at Onne is the Women Empowerment Project Scheme Synergy (WEPSS) – a company producing dresses, foot mats, bow ties, overalls, aprons, table clothes, personal protective equipment etc – employing and empowering thousands of indigent local women because if the termination is not reversed will be shut down.
In fact, there are several negative angles to the action taken against the company over an issue that can be resolved amicably by the government and Intels.
This line of thinking may have encouraged the leadership of the Federal House of Representatives to look at the development recently during plenary.
On Wednesday, the Federal House of Representatives maturely looked at the matter and settled for an investigation into the matter in order to find a lasting solution.
Though it appeared that the House was divided along party lines, truth prevailed as the Speaker, Hon. Yakubu Dogara ruled that even if some people may wish to see issues of monopoly in the matter, there is no law seeing that as an offence anywhere in the world. According to him, “some businesses are better carried out in a monopolistic environment.”
He said the issue to be bothered about was if the monopoly was being abused by the person enjoying it, which has not been proven or pointed out by anybody.
In his wisdom, he argued that there is need for the House to look into the matter for the interest of growing business in Nigeria.
In an amendment to the prayers, Mohammed Sani Abdul from Bauchi State suggested that “while the House investigates the issue on the ground, the company (Intels) should be left alone to continue its operations based on the existing agreement.”
The House, therefore, resolved to probe the controversy surrounding the withdrawal of the Federal Government from the agreement while the company is allowed to go on based on the amendment of the motion moved by Hon. Diri Douye (PDP, Bayelsa) on grounds of urgent public importance.
Douye had moved the motion, urging the House to investigate the process of terminating the ports management agreement/contract entered into by the Federal Government with INTELS Nigeria Limited.
He informed the House that INTELS has carried out logistic services in Apapa, Onne and Warri ports for 17 years, and wondered why the NPA would suddenly wake up to terminate an existing agreement that was meant to run a course of 25 years.
In his submission, Douye averred that “It’s known that INTELS Nigeria has over 7000 Nigerians in its employment and these Nigerians have other dependants”.
“And if we allow these people to lose their jobs, the economy will suffer further blow and setbacks.
“Terminating contracts of this nature where the company had taken foreign loans to the tune of $900 million to build up the ports must be given serious and thorough considerations.
“And we must also, as a House, insist that in taking such decisions, the Nigerian Local Content Act must be followed, and that due process is also followed.”
Supporting the motion, Sergius Ogun (PDP, Edo) informed the House that workers affected by the termination of the agreement were protesting.
“How can an agreement that has existed for years and showing the world that concessioning works in Nigeria, be cancelled in one day?
“INTELS is hiring Nigerians and if they must cancel that concession, they must follow due process.
“We want to keep taking oil in the Niger Delta and we are shutting down what gives the youths some level of livelihood, and when this happens, they go and start destroying installations,” Ogun said.
Other lawmakers who spoke in favour of the motion include Hassan Saleh (APC, Benue), Simon Arabo (PDP, Kaduna), amongst others.