Nigeria: How $1.5bn Contracts Pitted Transport Minister Amaechi against Ports MD Bala-Usman

Last week’s suspension of Managing Director of the Nigerian Ports Authority (NPA), Ms. Hadiza Bala-Usman, at the request of the Minister of Transportation, Mr. Rotimi Amaechi, was the culmination of a two-year war of attrition between the duo, triggered by disagreement in 2019 over whether or not to renew the channel management contracts, THISDAY findings have shown.

It was learnt that the NPA had in 2019 placed advertisement in newspapers calling for expression of interest and bids.

Sources said three bid rounds were cancelled on the orders of the minister over disagreements on the selective bids and open bids.

The process was suspended till May 11, 2020, when the NPA placed advertisements calling for expression of interest, which was again moved to October 2020 because participants protested that they could not participate because of COVID-19 restrictions.

The channels in contention are: Lagos, Port Harcourt (Bonny) and Warri while Calabar is under litigation.

Each channel management contract is valued at $100 million a year for five years making it $1.5 billion (N600 billion) for the three channels for the five years.

THISDAY learnt that Amaechi had requested that two Chinese companies are selected to manage Bonny and Warri Channels, a request the NPA rejected because it violated due process.

THISDAY checks revealed that 12 companies submitted technical bids for Lagos Channel, 25 companies for Warri while 18 companies bid for Bonny.

At the end of the technical bid process, three companies were shortlisted for Bonny and Warri while two were selected for Lagos.

For the Warri Channel, Pelfaco Construction Nigeria Limited, Redstar and China Harbour (JV) and A.A Ranno were prequalified.

 

For Bonny, Bellsea Limited, CRBC and CDBHC Limited (JV) and Borno Energy Limited/Dact Energy (JV) were prequalified.

Jandnul Limited and Hankuff Services Nigeria Limited were prequalified for the Lagos Channel.

The companies prequalified submitted their commercial bids between January and February.

Competent sources at the Bureau of Public Procurement told THISDAY that three company’s commercial bids were accepted as winners.

They are: Redstar Limited for Warri, Bellsea Limited for Bonny and Hancuff Services Limited for Lagos.

 

The battle between Amaechi and Bala-Usman further heightened this year when Amaechi wrote a letter to President Muhammadu Buhari requesting that INTELS Pilotage contract, which expired last year, be restored.

In a letter to Buhari in January 2021, Amaechi requested the restoration of all contracts between NPA and INTELS, which according to him, are now subject to legal disputes between the parties.

The minister also requested the withdrawal of all matters currently in court or at arbitration by both parties in order to enable him to resolve all pending issues ‘administratively,” a request that was granted by the president on January 22, 2021.

However, following a request by the presidency, Bala-Usman, in a letter to the Chief of Staff to the President, Prof. Ibrahim Gambari dated January 25, 2021, explained that the INTELS pilotage contract was not cancelled but had expired.

She also clarified that the NPA, contrary to claims, still have three contracts with INTELS, which include, the concession agreement for Onne Terminal A and B in Rivers State-commenced in 2005 and ending in 2030; the concession agreement for Calabar Terminal A in Calabar Port, Rivers State and concession for Warri New and Old Terminal, Delta Port, Delta State.

Bala-Usman, in the letter, stated: “The Service Boat Operation Management Agent contract commenced in June 2007 with a review of an extension of 10 years in 2011 to culminate in August 2020. The authority had in 2017 served INTELS with a notice of termination for its refusal to comply with the TSA policy of the federal government.

“Following the receipt of the notice, the company complied with the policy and a supplemental agreement was signed to recognise the compliance to TSA and the notice of termination was accordingly withdrawn.

 

“It is important to note that the agreement with INTELS on this service was not terminated but it reached the end of its contractual period in August 2020. In compliance with the Public Procurement Act (PPA), the authority in December 2019 initiated a public tender process in anticipation of the expiration of the contract for the appointment of a contractor to provide the authority with that service.”

 

She added that INTELS along with other bidders submitted their bids to qualify for the tender but that INTELS violated one of the criteria advertised for the tender and was disqualified.

 

While this was ongoing, Amaechi wrote another letter to Buhari alleging a shortfall in operating surpluses by the NPA requesting that she be suspended.

 

This move, THISDAY learnt, was against the advice of the Auditor General of the Federation (AuGF) who warned against the request in a letter to Amaechi.

 

The AuGF, in a letter dated April 16, 2021, had pointed out that NPA’s account for the period, except 2019, which is awaiting NPA’s board approval, had been audited and available.

 

The AuGF, Mr. Aghughu Adolphus, in the letter personally signed, said: “I write to respond to your letter reference number FMOT/F&A/ AuGF/2017/4/T dated April 6, 2021, especially with particular reference to paragraph two of the letter and wish to state the position of the AuGF with regards to your request. With particular reference to paragraph 20, “Annual Estimates and audit,” the Act number 38 of 1999 establishing the NPA and Sec. 85 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), I humbly advise as follows: “The board shall cause to be kept proper accounts of the authority and proper records, in relation thereto and when certified by the board, the accounts shall be audited by auditors appointed by the authority from the list and in accordance with the guidelines supplied by the AuGF.

 

“Nothing in sub-sec, two of this section shall be construed as authorising the AuGF to audit the accounts of or appoint auditors for government statutory corporations, commissions, authorities, agencies, including all persons and bodies established by an act of the National Assembly, but the Auditor General shall: A. provide such bodies with: 1. A list of auditors qualified to be appointed by them as external auditors and from which the bodies shall appoint their external auditors, and 2. Guidelines on the level of fees to be paid to external auditors and B. Comment on their accounts and auditors reports thereon.

 

“In line with I and 2 above, I wish to state that: The NPA board has duly engaged the external audit firms- Messrs Muhtari Dangama & Co (Chartered Accountants) and SIAO Chartered Accountants. The said audit firms audited and published the audited accounts of NPA duly approved by the board for the years ended: December 31, 2016, December 31, 2017, and December 31, 2018, respectively.”

 

The AuGF added that the audit of 2019 by Messrs Muhtari Dangama & Co and SIAO Chartered Accountants was ongoing and awaiting NPA board’s approval to be published.

 

He added: “Also, my office has conducted periodic checks for the years 2016-2018, and issued periodic checks reports along with comments on their annual accounts and auditor’s reports thereon, and reputable professional audit firms are already being engaged by the NPA board in line with the enabling Act – hence no justification for the Ministry “to advertise and select qualified Audit firms to conduct the exercise. Please be guided by the quoted provisions and accept the assurance of my warm regards.”

 

THISDAY also learnt that Amaechi’s desire to have HLS International Limited, an Israeli handling the $195 million maritime security contract, take over the disputed Secure Anchorage Area (SAA) that was turned down was another bone of contention.

 

The federal government had in 2017 approved a $195 million maritime security contract with an Israeli firm, HLS International Limited under the Integrated National Security and Waterways Protection Infrastructure also called the Deep Blue Project.

 

But in a move that negates the anti-corruption posture of the Buhari administration, Amaechi wrote to the government to ask for another $22.99 million to hire fast intervention vessels to check insecurity in Nigeria’s waters.

 

In a memo to the Federal Executive Council (FEC) dated July 22, 2020, Amaechi sought the government’s approval for the renewal of lease of fast intervention security vessels for a period of one year, claiming the $195 million already approved for the same purpose had been put on hold due to COVID-19.

 

The memo reads in part, “The purpose of this memorandum is to seek the consideration of the FEC for the extension of the contract for the lease of 6 no. units of fast intervention security vessels (FISV) on the same terms and conditions as earlier approved by the FEC in 2018 in favour of the following 6 no. service provider: Pearl HPW Limited, Thamson Energy services Limited, Fairway Offshore Limited, Aquashiled Oil & Marine Services Limited, XPO Marine Services Limited and Peace Marine and Energy Limited.

 

“Council is invited to recall that at its EC(2018)40 meeting held on Wednesday, 5 December 2018, it considered and granted approval for the renewal of the contract for the lease of six fast intervention security vessels for a period of one year, at the reviewed daily rate of $10,500 per vessel-making a total sum of $22.995, 000.00 on an annual basis which is equivalent to N7,013,475, 000.00, at the exchange rate of $1.00 to N305.00, inclusive of all taxes.”

Eromosele Abiodun

 

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