President Buhari

The Federal Government has said that its decision to direct the Nigerian Ports Authority NPA to terminate the over-seven year old pilotage contract with INTELS Nigeria Limited INL was because the contract violates several sections of the 1999 constitution, contrary to speculations in some quarters that the cancellation has a political undertone.

Speculations have been rife in the last 48 hours that the termination of the INTELS contract was part of the grand design by the current administration to dissipate the business empire of former Vice President, Alhaji Atiku Abubaka, who holds substantial stake in the firm with some other Italian investors over his recent comments on restructuring, which the government is opposed to and his plans to contest the 2019 presidential election, which might clash with the political aspirations of President Muhammadu Buhari.

Meanwhile, INTELS has officially contested the decision of the NPA to terminate the agreement, describing it as totally unexpected and clearly preposterous, insisting that the consequences of the termination in such manner would have terminal consequences on its finances and highly injurious to the interests of the company.

Attorney General of the Federation and Minister of Justice, Mallam Abubakar Malami SAN, while making the clarifications, says the contract agreement violates sections 80(1) and 162(1) and (10) of the constitution, especially in relation to the Single Treasury Account TSA, insisting that both parties did not take into cognisance the provisions of the contract during the discussions that preceded the actual signing of the contract.

He also cited section 80(1) of the constitution, which provides all revenues or other moneys raised or received by the Federation (not being revenues or other moneys payable under this constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose) shall be paid into and form one Consolidated Revenue Fund of the Federation.

According to him, section 162(1) states: ‘The Federation shall maintain a special account to be called ‘the Federation Account’ into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja’.

Similarly, it was also gathered that sub-section 10 of 162 provides that for the purpose of subsection (1) of this section, ‘revenue’ means any income or return accruing to or derived by the Government of the Federation from any source and includes: (a) any receipt, however described, arising from the operation of any law; (b) any return, however described, arising from or in respect of any property held by the Government of the Federation; (c) any return by way of interest on loans and dividends in respect of shares or interest held by the Government of the Federation in any company or statutory body.

The AGF had in a letter dated September 27, 2017 to the Managing Director of the NPA, Hadiza Bala-Usman and entitled: ‘Request for Clarification of Conflict Between Executed Agreement and Federal Government Treasury Single Account Policy’, stated that the agreement, which has allowed INTELS to receive revenue on behalf of NPA for 17 years, violates the Nigerian Constitution, especially in view of the implementation of the Treasury Single Account (TSA) policy of government.

The letter reads in part: “I refer to your letter dated 31st May 2017, ref: MD/17/MF/Vol.XX/583 in respect of the above subject matter wherein you sought clarification on the legal issues implicated by the continuous implementation of the Managing Agent Contract Agreement dated 11th February 2010 executed between the Nigerian Ports Authority NPA and INTELS Nigeria Limited for the provision of boats pilotage operations, in the light of the Federal Government of Nigeria’s Treasury Singe Account (TSA) policy”.

“Upon my review of your letter under reference and the relevant agreements, I have been able to conclude inevitably that the terms of the agreement as agreed by parties and the dynamics of its implementation which permits INTELS to receive revenue generated on behalf of NPA from the onset, clearly violates express provisions of Sections 80(1) and 162(1) and (10) of the 1999 Constitution of the Federal Republic of Nigeria, 1999 (as amended). It is thus curious that parties did not avert their minds to the above provisions of the constitution whilst negotiating the agreement.

“The inherent illegality of the agreement as formed has since been expounded by the TSA policy issued by the Head of Service of the Federation on behalf of the Federal Government of Nigeria directing all ministries, departments and agencies to collect payment of all revenues due to the Federal Government or any of her agencies through the TSA.

“The objective of the presidential directive (TSA policy) in exercise of the executive powers of the president under section 5 of the 1999 Constitution (as amended) was in furtherance of the spirit and intent of Sections 80 and 162 of the constitution and to aid transparency in government revenue collection and management.

“NPA being an agency of the federal government is bound by the TSA policy and has not howsoever been exempt therefrom. Due to the constitutional nature of the TSA, where there is a conflict between the TSA and the terms of the agreement, the TSA shall prevail.

“Therefore all monies due to the NPA currently being collected by INTELS and any other agents/third parties on behalf of NPA must henceforth be paid into the TSA or any of the sub-accounts linked thereto in the Central Bank of Nigeria (information of the account will be communicated in due course) in accordance with the TSA policy.

“For the avoidance of doubt, the agreement for the monitoring and supervision of pilotage districts in the Exclusive Economic Zone of Nigeria on terms inter alia that permits INTELS to receive revenue generated in each pilotage district from service boat operations in consideration for 28 per cent of total revenue as commission to INTELS is void, being a contract ex facie illegal as formed for permitting INTELS to receive Federal Government revenue contrary to the express provisions of Sections 80(1) and 162(1) and (10) of the 1999 Constitution of the Federal Republic of Nigeria (as amended), which mandates that such revenue must be paid into the Federation Account/Consolidated Revenue Fund.

But in a swift response, in a protest letter by INTELS dated October 11, 2017 and signed by one of its director, Mr. Silvano Bellinato, and addressed to the MD, NPA, the company formally protested the contents of the letter of the authority dated October 10, 2017 communicating the termination of the contract.

According to Bellinato, on March 15, 2017, INTELS received NPA’s letter with ref HQ/F&A/ED/AD/INTELS/034 in which NPA acknowledged a debt towards INTELS in the sum of $674,767,415.00 (in addition to the interests accrued in the meantime) in addition to other contents.

He also stated that the NPA in the said letter communicated the need to reconcile the sum of $109,000,000.00 for the additional works carried out as well as informing INTELS about the implementation to be discussed in respect of a ‘transit account’ called the NPA Service Boat Revenue Collection Account domiciled at one of the banks indicated by you and the related standard operating procedures.

The protest letter also reads: “The NPA confirmed 28 per cent agency commission to INTELS and the 72 per cent balance to be shared between the NPA and INTELS in the ratio 30:70. On March 27, 2017, we replied to every point in your letter of 15th of March to the effect that INTELS took note of NPA’s acknowledgement of debt; the INTELS declared availability to meet the NPA in order to discuss the details for the certification of the $109,000,000.00 for the additional works carried out; and the INTELS requested for postponement of the SOP application”.

He therefore expressed surprise and shock the sudden decision of NPA to terminate the contract even when both parties have been in mutual talks.