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Contract war: NPA set to re-engage firm indicted in $20m bribery scandal

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  • FG may dump probe as NPA shortlists firm, 21 others
  • Intels hits back as NPA terminates pilotage agreement
  • May cancel multibillion dollar investment in Badagry Deep Seaport

Jude Johnson


The indications have emerged that the Federal Government may stop ongoing investigation of a $20milion bribery scandal in the Nigerian Ports Authority (NPA) inspite of overwhelming evidence from Switzerland.

This is coming as the management of Intels Nigeria Limited (INL), has expressed displeasure at the termination of its Pilotage Agency Agreement by the NPA, describing the action as “preposterous” and highly injurious to Nigeria.

Findings on Wednesday revealed that allegations against those named in the scandal, including a company (Dredging International Services (Cyprus) Ltd,) might be dropped.


The management of NPA has shortlisted the company, which was indicted by Swiss authorities in the $20million bribery scam, and 21 others for bid for a new contract.

After pleading guilty in Switzerland, the company was fined 1million Francs by Swiss authorities.


The company was also ordered to refund 36 million Swiss Francs as illegal profits.

But the inclusion of the company is causing ripples in NPA because the Swiss government was expecting action on the corruption report which it sent to the Federal Government since 2012.


Some ministers were said to be pushing for the engagement of the company by NPA, a development which might cause a diplomatic challenge between the Federal Government and Switzerland.


The Swiss authorities, through the Office of The Attorney-General, Department of International Affairs on May 2, 2012 had implicated some NPA top officials in the $20million scandal alongside Dredging International Services (Cyprus) Ltd.


In forwarding its report to the administration of ex-President Goodluck Jonathan, the Swiss government said it invoked the United Nations Convention Against Corruption and the International Law Principle of Reciprocity.


Switzerland however demanded a probe of indicted Nigerians in spite of the fact that the Jonathan administration claimed that the $20million was “consultancy” fees


Although the bribery scandal preceded the new management of NPA, being led by Ms. Hadiza Bala-Usman, had vowed to sanction the company, directors and staff who were indicted. It was learnt that some forces had been trying to “frustrate the cleansing efforts of the Managing Director of NPA.


Findings showed that NPA has been “pressurized” to consider giving a new contract to the indicted firm.


A reliable source in NPA said: “We have a serious challenge at hand and it might affect our international image. While the Swiss authorities wanted Nigeria to act on the report and recover the $20million bribe sum, Nigeria seems to have foreclosed the probe of the scandal.


“Some forces are already pushing for a reprieve for Dredging International Services (Cyprus) Ltd. They are trying to influence the ongoing investigation by NPA management. We are being told that the Federal Government is no longer interested in investigating the $20million bribery. “


“Some ministers have been implicated in the push for a pardon for the indicted firm. And to our consternation, NPA has shortlisted Dredging International Services (Cyprus) Limited and 21 others for a new contract.


The bid for the contract will open any moment from now. It is really unfortunate that the corrupt elements have had their way. They are forcing the management to sing.”


A diplomat, who spoke in confidence, said: “It is unfortunate that your country has not acted on this report in the last five years. If nothing is done, Swiss authorities may not be interested in helping your government to recover Abacha looted funds.”


A presidency source said: “We have received many complaints on the status of the company in question but the last we heard from NPA was that it is seeking legal advice.


“We are watching development closely because the $20million bribery scandal was uncovered by the Swiss Government. So, the matter is between two jurisdictions. We do not want any diplomatic crisis between Nigeria and Switzerland.


“I can assure you that President Muhammadu Buhari and NPA MD will sweep such a scandal under the carpet.”


On June 14, the Managing Director of the agency, Hadiza Bala Usman, told PREMIUMTIMES that apart from being “deeply embarrassing” to the NPA, the indictment was particularly worrisome.


She said: “It is a development we are deeply worried about because it relates to the integrity of our agency and process.


“We are reviewing the indictment and we will call for a full-scale investigation as it relates to companies and individuals in Nigeria said to have been involved. “This corruption revelation is a helpful development.”

Dredging International Services (Cyprus) Ltd was part of a conglomerate which established The Bonny Channel Management Limited which has a joint venture service with NPA.


The Bonny Channel Company is expected to the following: “creating and maintaining a safe navigational passage for all marine users to and in the Eastern Ports of Bonny Island, Onne, Okrika and Port-Harcourt”.


In a related development, the management of Nigeria’s oil and gas logistics giant, Intels Nigeria Limited (INL), has kicked against the termination of its Pilotage Agency Agreement by the Nigerian Ports Authority (NPA), describing the action as “preposterous” and highly injurious to Nigeria.

Intels, in a statement made available ON Wednesday, disclosed that following the letter from the Attorney General of the Federation (AGF) and Minister of Justice, Mr. Abubakar Malami (SAN), to the Managing Director of NPA, Ms. Hadiza Bala-Usman, directing NPA to terminate the pilotage agreement, NPA promptly ended the contract on Tuesday, October 10, 2017, without inviting it as the other party to the agreement for negotiation or due recourse to the terms of the agreement that specify conditions precedent before a party can exit the contract.

Report revealed that Malami had written to Bala-Usman on September 27, directing her to terminate the boats pilotage monitoring and supervision agreement that the agency had with Intels, saying that the contract was illegal ab initio.

Malami in the said letter had stated that the agreement which had allowed Intels to receive revenue on behalf of NPA for 17 years was in contravention of the Nigerian Constitution, especially in view of the implementation of the Treasury Single Account (TSA) policy of government.

Based on the directive, Intels which was founded over three decades ago by Mr. Gabriele Volpi, an Italian national who also has Nigerian citizenship, and former Vice-President Atiku Abubakar, stands to lose several millions of dollars in commissions for the monitoring and supervision pilotage services it handles on behalf of NPA on Nigerian coastal waters.

Drawing the attention of Bala-Usman to the illegality of the agreement, Malami made it expressly clear that the agreement violated Sections 80(1) and 162(1) and (10) of the constitution, and wondered that the parties – NPA and Intels – did not avert their minds to the relevant provisions when they were negotiating the agreement in 2010.
But in a strongly worded response, Intels said Wednesday that the termination of the agreement which was conveyed to the firm in a letter signed by the NPA boss on Tuesday, was “clearly preposterous and the consequences highly injurious” to the interests of Nigeria.

Intels said the action by NPA would force it to reconsider its multibillion dollar investment at the Badagry deep seaport in Lagos, adding that the investment would have created thousands of direct and indirect jobs for Nigerians.

It said it had invested too much in the country and if the Nigerian government was not prepared to respect the sanctity of its contract, it was ready to head to the courts to challenge NPA’s action.
Intels gave NPA seven days from Wednesday to reconsider the residual critical areas of their relationship and to agree, to the possible extent, on a common solution, failing which it shall head to arbitration.

It further divulged that the NPA was indebted to it to the tune of hundreds of millions of dollars.
In a copy of the letter signed by a Director of Intels, Mr. Silvano Bellinato, to Bala-Usman Wednesday rejecting the termination of the agreement, the company said: “With reference to your letter received on October 10th 2017, allegedly terminating the Agency Agreement between Nigerian Ports Authority (NPA) and INTELS Nigeria Ltd (INL), we formally contest the contents of the same for the reasons stated below:

“On March 15th 2017, we received your letter ref: HQ/F&A/ED/AD/INTELS/034 in which, in addition to other contents, the following points were stated:
“Nigerian Ports Authority (NPA) acknowledged a debt towards Intels Nigeria Limited (INL) in the sum of 674,767,415.00 US$ (in addition to the interests accrued in the meantime);

“NPA communicated the need to reconcile the sum of 109,000,000.00 US$ for the additional works carried out;
“NPA informed INL about the implementation to be discussed in respect of a ‘transit account’ called NPA service boat revenue collection account domiciled at one of the banks indicated by you and the related standard operating procedures (SOP);

“NPA confirmed 28% agency commission to INL and the 72% balance to be shared between NPA and INL in the ratio 30:70.

“On March 27th 2017, we replied to every point in your letter of 15th March as stated below:
“INL took note of NPA’s acknowledgement of debt;

“INL declared availability to meet NPA in order to discuss the details for the certification of the 109,000,000.00 US$ for the additional works carried out;

“INL requested for postponement of the SOP application.
“On April 19th 2017, NPA acknowledged our acceptance of NPA’s proposal in respect of 28% agency commission (already included in the existing running Agency Agreement) and in particular to the 30% – 70% split, respectively to NPA and INL, related to the 72% balance. This would imply that the 30% is to be remitted on a monthly basis to NPA while the 70% is to be applied towards reducing the indebtedness to INL.

“Regarding the TSA application, NPA reiterated the strategic importance of such a request. However it is noted that TSA was not part of the existing agency agreement between the parties.”

The company said that on May 5th 2017, it replied NPA’s letter of April 19th 2017 proposing the opening of a jointly signed account between INL and NPA in which the boat service revenues would have been directed.
According to Bellinato, “Afterwards the account holders, with relative proxies, would remit the respective portions due to the parties, being 30% in favor of NPA and 70% in favor of INL.

“In the same letter we indicated our availability to identify the bank, from among the ones indicated by NPA; regarding the reasons of our proposal we firmly reiterated the precariousness of our financial status, mainly attributable to the credits towards NPA and heavily financed by various credit institutions.
“Such circumstances rendered alternative solutions to the ones suggested by us unviable, and also taking into consideration the inapplicability of TSA to running contracts in the manner proposed by NPA.

“Clearly, deduction of entitlements due to INL from collections under the Agreement, and payment of the balance into the designated NPA account for TSA purposes, would be in compliance with the TSA policy.”
Intels maintained that the decision by NPA to terminate the Agency Agreement, which was totally unexpected in consideration of the meetings held by the parties and exchange of letters, was clearly preposterous and the consequences highly injurious to the interests of the company.

“Hence, in compliance with the Article 12 of the Agency Agreement between the NPA and INL, we hereby request you to schedule a meeting within seven days from the date of this letter, in order to analyse the residual critical areas of our relationship and to agree, to the possible extent, on a common solution.
“Should this not happen, we hereby notify you that, in accordance with Article 13 of the Agreement, we will refer the matters to arbitration, in order to safeguard our company from the significant damages and other adverse consequences that may result from this rather unbecoming decision.

“We wish to reach an amicable solution as soon as possible for this complicated matter so that we can avoid to request for the intervention of the court for the immediate payment of any amount due to us from NPA, also in light of the likely pressure for action from our banks, which we may be compelled to do, despite our unwillingness,” the company stated in the letter.

Intels also warned that the “unjustified decision” by NPA would hurt Nigeria’s international credit rating and scare away the much needed foreign direct investment.
“Among them we cannot avoid to mention Intels itself, which has planned to make the investment for the largest African port in Badagry, for an amount of several billions dollars,” the company stated.

According to Intels, “For information purposes only, we recall that on November 8th, 2013 (Art. 2.2) an agreement with the NPA has been signed binding it, without any doubt, to reimburse the investments made on its behalf at FOT Onne – Phase 4B (and also under separate agreement for Eko Support projects) with the 100% of the incomes generated through the pilotage activities, which means that repayment will be made out of the 72% to be reserved to yourselves under the SOP proposed by NPA.

“Given that, it is clear that the said agreement sets the substantial transfer of the receivable in favour of our company, which cannot be disregarded and that only a subsequent agreement as the one the parties are negotiating (70%-30%) may modify, in your exclusive interest.

“Our relationship has always been characterised by timely execution of projects undertaken on behalf of NPA as well as operational efficiency, which has variously been acknowledged by NPA.

“It is also easy for you to ascertain the regularity and timeliness of the payments made by us on a monthly basis for the lease of facilities and throughput fees, equal to an amount of over 170 million US$ since the award of the concession.

“On July 26th, 2017 a joint technical meeting was held with the aim of reconciling the credit/debit balances between our entities, confirming the amounts due to our company. On that occasion, the request to postpone the issuance of a credit note in our favour related to the interests matured on the said amount was raised, for budget and financial statement needs.

“We mention this point only to confirm, should it be required, the effective and constructive cooperation existing between our respective entities, which contrasts sharply with your decision as communicated in your letter of today (Tuesday) and makes it even more unexplainable.”

Credits/Thisday, Nation


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