The Nigerian Ports Authority (NPA) and Intels have agreed to new terms, including the reduction of the agency commission on pilotage collections from 28 per cent to a lower commission of 24.5 percent, among others.
The new arrangement follows an interim injunction by the Federal High Court in Lagos preventing the termination of Intel’s role as a managing agent in various pilotage districts and a presidential directive to extend the boat operation contract of Intels.
In a statement titled, “Setting the Record Straight in Respect of Service Boat Monitoring Operation in Nigerian Ports Authority: Reinstatement of INTELS Nigeria Limited as Management Agent,” the NPA said apart from the reduction of the agency commission on pilotage collections from 28 per cent to a lower commission of 24.5 per cent, both parties also agreed that all revenues collected by the logistic company must be paid into the designated Treasury Single Account (TSA) of the NPA at the Central Bank of Nigeria (CBN).
Parties also agreed to a waiver of $100, 000,000 part of the accrued interest as of 31 July, 2023, on the indebtedness to Deep Offshore Services Limited under the Phase 4B Agreement.
The statement further mentioned an agreement to a further waiver of the interest which shall accrue on the outstanding debt under the Phase 4B Agreement for two years, commencing on 1 July, 2023, and ending on 30 June, 2025, which is currently estimated in the sum of US$93,317,556.
“There is a reduction of the interest rate on the indebtedness to Deep Offshore Services Limited from six-month LIBOR rate + 6.5% to 6-months SOFR rate + 3% effective from the date of execution of the supplemental agreement.
“The Authority will be saving a total sum of $ 326,895,226 as a result of a waiver of a part of accrued interest and reduction of interest rate from 6.5 percent to 3 percent on the debt over the next 15 years,” a part of the statement read.
“The proposed spread of the debt of $522,433,453.25 to be paid back over 15 years will, of itself, earn for the Authority a huge benefit in terms of preservation of funds to meet its other operational needs over the period,” the NPA further said.
According to the NPA, the legal impasse created by the dispute with Intels and Deep Offshore Services Nigeria Limited caused the federal government to lose enormous revenue in the period it took over the management of pilotage.
“After the expiration of the Service Boat Management Agreement, the Authority took over the performance of the service through various Departments and Divisions.
“However, due to the constraint of not having the requisite technology to monitor the operations, the expected revenue dwindled and it resulted in the drastic reduction of revenue generation for the Authority.
“An analysis of its impact on the authority’s revenue showed a sharp decline from $216 million and $209 million in 2014 and 2015 respectively under the INTELS agency to $130 million and $99 million in 2020 and 2021, respectively, after taking over by NPA. The situation in 2023 is even worse as the collection up to June 2023 was only $55.3 million,” the statement revealed.
The Federal Government, through the NPA, in September 2020, announced the termination of Intels’ boar contract before the expiration of the Service Boat Monitoring Agreement, following which INTELS Nigeria Limited and Deep Offshore Services Limited instituted a suit no FHC/CS/L/1058/2020 at the Federal High Court, Lagos against the Authority seeking orders of the Court to restrain the authority from engaging new Service Providers to carry out the monitoring of Service Boat Operations in the Exclusive Economic Zone.
