NPA-INTELS pilotage service contract does not violate constitution, says NIIA

The Nigerian Importers Integrity Association (NIIA) has weighed in on the controversy trailing the termination of the pilotage service agreement signed between oil and gas logistics giant, INTELS Nigeria Limited and the Nigerian Ports Authority (NPA) arguing that the contract is legal, constitutional and similar to the joint venture agreements signed by the Nigerian National Petroleum Corporation (NNPC) with the International Oil Companies (IOCs).

NIIA President, Godwin Onyekazi, also said that termination of the contract will impact negatively on government revenue and on efficiency at Onne Port.

“Since the story broke, we have sought legal advise from our lawyers who informed us that the contract is constitutional.

“The Nigerian Ports Authority (NPA) outsourced its pilotage services on a mutually agreed profit sharing ratio of 72:28 just like the crude oil exploration contracts with the International Oil Companies (IOCs).

“Can the Nigerian National Petroleum Corporation (NNPC) demand that IOCs like Chevron, ExxonMobil, Shell and others pay crude oil sales directly into TSA before deducting what is due to them?

“It is the same case with the NPA-INTELS contract. If you now say the NPA-INTELS pilotage services contract violates the constitution, then the same argument must apply to all the crude oil sales contracts with all the IOCs,” he said.

Onyekazi said Onne Port is the only viable port outside Lagos because of the contribution of INTELS, which “provided an alternative port” to importers especially those doing business in Onitsha, Aba and other cities in the Eastern part of the country.

“We want to believe that the Federal Government has been misinformed about the importance of INTELS and of the Onne Port and we urge the powers that be to reconsider their stand on the matter,” he said.

Speaking in the same vein, President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Mr. Lucky Amiwero, said NPA had no right to cancel the contract it signed with INTELS as the NPA Act empowers it to enter into contractual agreements with its stakeholders and partners for efficient port operations.

A columnist, Mr. Eze Onyekpere, stated that cancellation of the pilotage contract raises a lot of issues and unanswered questions.

According to Onyekpere, “If none of the parties is alleging being shortchanged or withholding funds due to it by the other and the issue is just one of the TSA (Treasury Single Account) versus other accounts, then this seems like a huge storm in a tea cup.

“If this analysis of the sums due to the CRF (Consolidate Revenue Fund) is right, then the contract cannot be said to be void, unconstitutional and illegal. The illegality would have arisen where a party withholds the actual percentage (in this case 72 per cent) due to the CRF.”

NPA said it cancelled the contract due to the refusal of INTELS to remit revenues collected under the pilotage service agreement into the TSA. The company however kicked, saying it was surprised by NPA’s unilateral action without recourse to amicable resolution of the issue or recourse to arbitration as stipulated in the contract.

INTELS said the termination of the contract was “clearly preposterous and the consequences highly injurious” to the interests of Nigeria.

The company also hinted that the development could lead to its withdrawal from the multimillion dollars Badagry Deep Seaport project.