In a financial blow to Nigeria, officials have revealed that the termination of Intels’ pilotage service contract by former Managing Director of the Nigerian Ports Authority (NPA), Hadiza Bala Usman, has resulted in losses exceeding USD 200 million (over N200 billion).
According to Ships & Ports, during her tenure as NPA Managing Director, Hadiza Bala Usman initiated a contentious move against Intels, a major maritime operator and oil and gas logistics giant.
This aggressive approach ultimately led to the controversial termination of Intels’ pilotage service contract, resulting in a substantial loss of jobs.
The current NPA Managing Director, Mohammed Bello Koko, disclosed over the weekend that the Federal Government incurred losses amounting to USD 86 million in 2020, USD 110 million in 2021, and an undetermined sum in 2022 and 2023 due to the withdrawal of pilotage services from Intels.
Koko emphasized that the significant financial impact was a direct consequence of the NPA’s inability to effectively replace the role previously performed by Intels, underlining the ongoing economic repercussions of the decision.
“An analysis of its impact on the authority’s revenue showed a sharp decline from $216 million and $209 million in 2014 and 2015 respectively, under Intels agency, to $130 million and $99m in 2020 and 2021 after taking over by NPA. The situation in 2023 is even worse, as the collection up to June 2023 was only $55.3 million,” Bello Koko said.
READ ALSO: NPA, TICT Officials Extort N50,000 Per Truck Entering Tin Can Port – Truck Drivers, Agents Allege
Recall that the pilotage service contract was recently reinstated to Intels by the Nigerian Ports Authority (NPA), 30 months after Bala Usman was removed from his position as Managing Director.
In a memo titled “Reinstatement of INTELS Nigeria Limited as the authority’s service boat operations monitoring provider in the pilotage district,” signed by the Port Manager of Lagos Port Complex, Charles Okaga, NPA said that it had extended the contract it entered with the company.
Providing a progress report on the development, the NPA reassured Nigerians that the initiative would boost revenue generation.
They expressed dissatisfaction with the unnecessary revenue losses caused by the issue.
“The Federal Government would earn over $500 million taking into consideration the interest waiver of $193 million, the reduction in the interest rate on the outstanding debt from six-month London Interbank Offer Rate + 6.5 percent to six-month Secured Overnight Financing Rate + 3 percent, the spread of the repayment of the debt over 15 years, with the first two years interest-free, and the reduction in commission from 28 percent to 24.5 percent.
“It has become necessary to put the record straight for the benefit of the public and the generality of stakeholders in the port industry. This is also to avoid distortions and conjectures which may arise because of wrong interpretation of the aforementioned letter,” NPA further explained.
In its most recent editorial, a newspaper based in Abuja advocated for imposing sanctions on individuals whose actions or lack of action resulted in Nigeria experiencing significant revenue losses amid diminishing resources and a shortage of foreign exchange.
“Why was the contract cancelled in the first place since it was clear that NPA lacked the competence to monitor and ensure there was no revenue loss? If NPA knew INTELS had the requisite competence to handle the contract and ensure the nation gets the needed revenue, why did it look the other way when the decision to withdraw the contract was taken?” the newspaper asked.
“In the days ahead, Nigerians will wait for both the NPA and all those connected with this loss, no matter how remote, to provide cogent explanation on what happened and why. In the meantime, we urge the authorities to urgently put in place concrete measures to forestall further loss of much-needed revenue,” it added.