De-categorization of Port Terminals Will Lead to Huge Loss of Govt revenue, Says INTELS

*Says NPA’s action violates port concession agreement

INTELS Nigeria Limited has said that it opposes the de-categorization of port terminals by Nigerian Ports Authority (NPA) because it is not in the nation’s best interest, as it will result in huge revenue loss to the Federal Government.

In his Witness Statement on Oath filed at the Federal High Court Abuja in a case instituted by the company against NPA and four others, a Senior Legal Manager of INTELS Nigeria Limited, Mr. Dominic Onwuchekwa, stated that the proposed de-categorisation of the terminals will not only jeopardise the prospect of the Plaintiff recovering its investments under the concession agreement signed with the Federal Government, but that it will also undermine the commitments made to its lenders.

“In addition, the de-categorization will lead to a situation whereby all terminals will charge the lower fee of $1.2 per ton (even for oil and gas cargoes for which $5.83 per ton should be paid) in order to attract patronage from port users, but on the other hand short-changing the government itself and the people of Nigeria,” Onwuchekwa stated in the Witness Statement on Oath.

He further averred that in discharging its obligations in accordance with the terms and conditions of the various Lease Agreements (including the Concession) with the Federal Government, INTELS expended huge sums of money in upgrading port facilities and building infrastructures as well as developing specialized oil and gas designated terminals based on the need and requirements of the oil and gas industry world-wide.

“Conservatively, the Plaintiff has, thus far, expended over USD2 billion out of its own resources without amortization in various projects and has budgeted additional USD5 billion in phased Port Terminals development and infrastructural renewal,” he stated.

He said the huge investment by INTELS in five concessioned port terminals across the country were made in response to the Federal Government’s quest and demand for investment in port infrastructure development in Nigeria.

“In addition to the above, the Plaintiff had also expended these huge expenses because it had entered into and executed 5 nos. Lease Agreements on the Concessioned Port Terminals which life span were 25 years with option of renewal for a further term on each terminal,” Onwuchekwa stated.

He said INTELS’ investment in the concessioned terminals was “based on the assurances and comforts from the 1st – 5th Defendants, especially the 3rd Defendant’s (NPA) categorization of Ports and Terminals, stating that the company “was persuaded into financing huge capital intensive projects for the benefits of the 1st- 5th Defendants and the people of Nigeria”.

According to him, “this relationship was based on the understanding that the Plaintiff shall re-coup its investments from its agreements with the Defendants entered in respect of contracts at the Oil and Gas Terminal services. The dredging and the reclamation of the 95 hectares swampy area at Federal Lighter Terminal Onne is one example out of several entered into between the 3rd Defendant and Prodeco international Limited which was financed by the Plaintiff.”

It will be recalled that Justice A.R. Mohammed of the Federal High Court, Abuja last month issued an interim order directing the Nigerian Ports Authority (NPA) and four others to maintain the status quo in a suit filed by INTELS Nigeria Limited on the de-categorization of terminals at the nation’s seaports.

INTELS, which filed the suit number FHC/ABJ/CS/417/2017 at the Federal High Court Abuja, is, among other reliefs, asking the court to issue an order stopping NPA and other defendants including their representatives, agents or privies from implementing a proposed policy review which purports to cancel the designation of ports and terminals in Nigeria having led it into committing huge human, financial and material resources into developing five port terminals located in Calabar Terminal A, Warri Old Terminal A, Warri New Port Terminal B, Onne Port Federal Ocean Terminal A and Onne Port Federal Lighter Terminal B.

The defendants in the suit are the Federal Government of Nigeria, Attorney General of the Federation, Nigerian Ports Authority, Bureau of Public Enterprises and the Federal Ministry of Transport.

INTELS also asked the court to make a declaration that the five Lease Agreements it entered into and executed between the Plaintiff and the 3rd, 4th and 5th Defendants (who executed same for and on behalf of the 1st and 2nd Defendants) in respect of Warri New Terminal, Warri Old Terminal, Federal Lighter Terminal B, Calabar Terminal A and Federal Ocean Terminal A, all dated October 24, 2005 for 25 years renewable leasehold, are still subsisting.

Other reliefs sought by the company include a declaration that the Defendants are duty-bound to honour, perform and fulfill their contractual obligations as stated in the five Lease Agreements all dated October 24, 2005 between the Plaintiff and the 3rd, 4th and 5th Defendants acting for and on behalf of the 1st and 2nd Defendants; a declaration that the Plaintiff has not in any way whatsoever and howsoever, breached, violated and or failed to perform any of its duties and obligations as stated in the five Lease Agreements entered into and executed between the Plaintiff, and the 3rd, 4th and 5th Defendants acting for and on behalf of the 1st and 2nd Defendants.

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