Managing Director of NPA, Mohammed Bello-Koko.

Strong indications emerged that the Senate Committee on Public Accounts and the Nigerian Ports Authority are set to resolve the legacy debts debacle, some of which date to pre-colonial era while several others have accumulated for decades but are still captured in the financial books of the authority.

Recall that Managing Director of the NPA, Mohammed Bello-Koko, who had appeared before the House Committee on Public Accounts of the 9th Assembly, where the debts were thoroughly verified and gave the Authority a clean bill of health had also appeared before the Senate Committee on Public Accounts on December 8, 2024 over the same issue.

Some of the members of the committee.

Bello-Koko explained that the misunderstanding between both chambers of the National Assembly arose from the continuous repetition of sums dating back to the period before the 2006 Port Concession Programme of the Authority, which the current management of the NPA had already accounted for but the sums had yet to be expunged from its books.

Meanwhile, in a fresh move to permanently resolve the issue, the Senate Committee invited the management of the NPA to appear before it on Friday, February 16, 2024, where the Committee referred the matter to a sub-committee for a review and possible expunged from the books of the Authority.

In a post gleaned from his verified X handle; @MohdBelloKoko, the Managing Director of NPA said:” Earlier today, my team and I appeared before the Senate Committee on Public Accounts, led by Senator Wadada, to review the legacy debts of the Nigeria Ports.

“These legacy debts date back to over 20 years, arising from encumbered areas, debts owed by state-owned enterprises, operators, among other claims.

“The Senate Committee assigned a sub-committee to review the debts and find a lasting solution—possibly a write-off, similar to the decision of the House Committee on Public Accounts of the 9th National Assembly.”

The NPA MD had last year provided clarifications to the Senate Committee on Public Accounts on the alleged debt sum of N1 billion, which the committee said was not clarified in the report of the Auditor General of the Federation.

NPA-boss had also extended the clarifications to the $852,093,731.10 cited in the Auditor General of the Federation’s report, which then circulated in the media, even as he said that a total of $232,354,156.43 out of the sum had been recovered.

In his clarifications, Bello-Koko had said: “The debts date back to the period 2006 to 2019,” adding that “There have been recoveries within the period under review, and they are unrecoverable debts owing to issues such as Volume Change, Gross Minimum Tonnage (GMT)/Penalties, Encumbered Areas etc.

“For avoidance of doubt, it would be necessary to explain the following terms:

“Volume Change – Means volume adjustment. The Executed Contract Agreement stated that if the percentage variation between actual/ performance and projected volume is within minus 10% to plus 10per cent of the lease fee will be paid in full. However, if the percentage variation performance is more than minus 10per cent to plus 10per cent the lease fee payable will be adjusted by an equivalent percentage. Therefore, the adjustment is against the lease fee payable by the percentage change in volume.

“Encumbered Areas – Refers to areas that are inaccessible due to factors not caused by the tenant such host community hostility, marshy land etc.

“Guaranteed Minimum Tonnage (GMT)- This to the projected tonnage pledge by the Concessionaire to achieve, this arises from the inability of the Concessionaire to meet up the pledge.

“Unpaid VAT- This relates to the VAT element of the unpaid Lease Fees arising from adjustment brought about by the volume change defined above.

“Penalty- Refers to financial burden suffered for failure to meet terms of payment in a contractual agreement. It is as a result of the Concessionaire not paying within the specified time /days allowed in the contractual agreement. Simply put, it refers to a charge for late payment.”

He continued: “The figure quoted in the press relates to the 2019 Auditor General’s report and it doesn’t reflect the current position of indebtedness to NPA.

“It would be pertinent to clarify that out of the amount of $852,093,731.10 cited in the Auditor General of the Federation’s report and being circulated in the media, a total of $ 232,354,156.43 have been recovered.

“The balance $504,663,452.37 constitutes uncollectible portion due to volume change and Contentions, $54,663,452.37 constitutes uncollectible portion due to Gross Minimum Tonnage (GMT), $19,619,459.00 constitutes Portion due to Encumbered Areas, $11,908,355.82 constitutes various penalties imposed on the terminal operators for not meeting set standards and $ 28,693,607.07 represents VAT of said amount.

“In relation to the concessionaire debt of N1.8bn, a total of N269m has been recovered leaving a balance of N1.6bn which represents encumbered areas of the terminals.

“As regards the outstanding estate rent, Ship Dues and service boats of $67m a total of $10.6m has been recovered.”