FG Directs NPA to Cancel Pilotage Monitoring Agreement with Intels

The Nigerian Ports Authority (NPA) has been directed by the federal government to cancel the pilotage monitoring agreement it has with Intels Nigeria Limited.
Under the agreement, the integrated logistics provider guides ships coming into the ports and leaving for safety purposes.
Intels, it was gathered has carried out the services for NPA for many years now.

With the agreement, Intels collects charges on behalf of the NPA from shipowners for the job in which it also receives 28 per cent commission from what it collects.
But in a letter from the Attorney General of the Federation (AGF) and Minister of Justice, Mallam Abubakar Malami (SAN), the Managing Director of the NPA, Ms. Hadiza Bala-Usman was directed to terminal the contract.
In the letter said to be dated September 27, the attorney general described the agreement as illegal, moreso with the introduction of Treasury Single Account (TSA) by the present administration.
In an exclusive report by THISDAY Newspaper, the Attorney general had in the letter drawn the attention of the NPA MD that the agreement was in violation of Sections 80(1) and 162(1) and (10) of the constitution.
The attorney general’s letter cancelling the contract was also based on the request by the MD in a letter seeking “clarification of Conflict Between Executed Agreement and Federal Government Treasury Single Account Policy”.
Part of the letter published by THISDAY reads:
“Request for Clarification of Conflict Between Executed Agreement and Federal Government Treasury Single Account Policy,” the attorney general said: “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 ab initio, 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% 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.
“In the premise of the above, the conflict between the agreement and the TSA policy presents a force majeure event under the agreement, and NPA should forthwith commence the process of issuing the relevant notices to Intels exiting the agreement which indeed was void ab initio.”

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