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Why NPA should review termination of pilotage contract with INTELS

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UNDOUBTEDLY, the  cancellation  this month, of the boats pilotage  monitoring and supervision agreement, which the Nigerian Ports Authority, NPA, on behalf of the Federal Government  had with the INTELS Nigeria Limited  since 2010  has deepened the controversy  which has inundated the  contract  since the beginning of this year .


The Agreement empowers INTELS to receive revenue on behalf of the government and retain 28 per cent of what it has collected before remitting the balance of 72 percent which is the Federal Government’s share to the Consolidated Account of the country.

The debate largely had dwelt on the appropriateness or otherwise of the nullification of the contract and its implications for INTELS ,  the workers  implementing the contract,  the  maritime sector, the economy and by extension the reaction of the foreign investors to the action.


Since there is always no smoke without a fire, NPA had justified the revocation of the contract on INTELS’ violation of the provision of the Treasury Single Account, TSA, which dictates that all revenues collected on behalf of government should be deposited into that Account while it said that the Agreement also contravenes sections 80(1), 162(1) and (10) of the constitution of the Federal Republic of Nigeria.

Treasury Single Account

While the  NPA Managing Director, Hadiza Usman  had explained that it was forced to terminate the contract  for the fact that all efforts made by the management of the Authority to ensure that INTELS abided with the TSA demands failed, INTELS has however said that it was not given adequate opportunity to negotiate  before the action was taken.

Apart from this, INTELS  argued  the TSA is a very recent development which was not part of the pilotage agreement when it was signed  insisting  that it was illegal for the NPA to have unilaterally decided to revoke the contract without recourse to it, the partner as well as the provisions for exiting the agreement.

Already, many a commentator has commended the NPA Managing Director for having the guts to take the action, for her insistence on due diligence, protecting the interest of government and the economy, others have also made a case for the need for the revocation of the contract to be reversed because of the efficient way  INTELS has executed it among other reasons.


While INTELS had earlier threatened to take a court action against the Federal Government and the NPA for an illegal termination of the contract as well as withdraw its massive multi – billion naira investment from the Badagry Deep Seaport project, it had however reviewed its decision on these two areas.


This followed the wise counsel and the intervention of the founder and Chairman of the company, the Italian, Mr. Gabrieli Volipi  who apparently does not want its legacy to go into oblivion and who  has  had to  apologise to the federal government and NPA over the disagreement with INTELS.

He has specifically pledged to ensure that the company complies with the directive of government and transfer all the revenue from the pilotage project  to the TSA as  a law-abiding entity as well as  co-operate with the  NPA in the development of Nigeria’s maritime sector and continue its development of the Badagry Deep seaport.


Herein lies the crux of the matter. For the fact that INTELS has now decided to comply with the provision of the TSA, the major reason NPA is believed to have  nullified  the contract in the first place, then it behoves the Authority to review its decision, get back to the discussion table with its partner on the necessary modalities to abide with the policy so that the contract can continue in earnest.


This became necessary so that the Federal Government will easily prove wrong those commentators who have argued that NPA cancelled the agreement for political reason – because of the former Vice President, Atiku Abubakar , a major shareholder of INTELS  who has said that the company is his most viable business  and who is most likely to contest against President Buhari in the 2019 election.

Foreign Investors

Beyond this, the consensus in the economy is that the government’s decision on the contract if not reviewed will send a wrong signal to foreign investors who want to invest or those who would have wanted to do more than they have done because they fear that government can wake up one day to terminate their contract, the way it did the agreement with INTELS without respect for its provisions.


Additionally, while INTELS is not an indispensable entity , it has however acquired so much expertise not only in the ports terminal  concession it  had which has made it to convert Onne Port to an enviable model , but also the  way it has  implemented the covenants of the pilotage   agreement to the letter  and also substantially boosted government revenue through it.


It is indisputable that INTELS took the pilotage service from a revenue stream of a few thousand dollars per month to a multi million dollars per month project .Little wonder it had to borrow $1.4 billion (N428.4 billion) from banks to execute the agreement with the understanding that the debt would be offset from monies realised from the pilotage services paid directly to the banks.

The Government and the NPA also need to realise that INTELS has  invested massively in the more than 20,000 workers for the purpose of the agreement  while it would not only amount to a great loss for the company to let them off but also an additional burden on the already saturated unemployed market if they are retrenched.

Track Record

Most importantly, the track record of the INTELS as a good corporate entity in the economy should also be considered,a development that has informed its decision to invest in the multi billionaire Badagry Deep Seaport project  which  has the capacity to end the traffic congestion at the Lagos seaport Access road and which execution is  of tremendous benefits to the maritime sector, the economy of Lagos and that of the whole country.

*Mr.  Felix Omagbemi, wrote  from Abuja.

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