Operators Kick As Minister Moves To Overturn Concession Agreement Renewal

Terminal operators have kicked over the minster of Transportation, Mu’azu Sambo’s directive for performance audit on terminal operators.

LEADERSHIP reports that months after Nigerian Ports Authority (NPA) renewed lease agreements of the terminal operators, the Ministry of Transportation is pushing to overturn the pact on the pretext that it did not follow due process.

The terminal operators whose concession agreement had expired and have had their licences renewed by the NPA after being cleared by the Infrastructure Concession Regulatory Commission (ICRC) are Port and Cargo, ENL, Josepdam, and AMS in Warri.

However, documents from the Ministry of Transportation and the Infrastructure Concession Regulatory Commission (ICRC), the concessionaires were said to have complied by all the rules and were duly awarded the appropriate certificates by ICRC, which is the constitutionally mandated agency for that purpose.

However, speaking in Lagos over the weekend, the minister of Transportation, directed the Nigerian Shippers’ Council (NSC) to carryout performance audits on the terminal operators as part of prerequisites for any lease renewal.

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While meeting with the NSC Governing Board members, the NSC Executive Secretary, Hon. Emmanuel Jime, as well as management staff in Lagos, Sambo expressed dissatisfaction that requests for concession agreement renewals from the Nigerian Ports Authority (NPA) had been submitted without verifiable data on the performance of the terminals, saying that as the port economic regulator, NSC was best placed to perform this role, a development that is likely to pitch NPA against NSC.

However, a memo from ICRC, dated December 30, 2022 and referenced ICRC/HQ/P/S.04/266 revealed that the minister had been fully briefed on the conclusion of the concession agreements.

The memo reads in part, “The honourable Minister may wish to note that the Commission had given approval to the Nigerian Ports Authority (NPA) for the renewal of the Terminals Concession through letters referenced ICRC/DG/50/S.52/118 dated September 24, 2021, subject to obtaining all necessary approvals including the Federal Executive Council for ease of reference, and attached copies of the letters.

“The Commission’s approval was given based on the Business Case submitted to the Commission by the NPA and subsequent negotiations held between the Government team (NPA, ICRC, the “Transaction Adviser) and the affected Terminal Operators.”

However, a stakeholder in the maritime sector, who spoke on the condition of anonymity, said the minister was turning logic upside down by attempting to drag Shippers’ Council into an agreement that had been concluded by NPA and ICRC.

The source said while the process of agreement was at the preliminary stage, Shippers’ Council was duly represented in the inter-ministerial committee set up by the immediate past Minister of Transportation, Rotimi Amaechi, to follow everything to the end.

“Mind you, the inter-ministerial committee set up by Rotimi Amaechi had submitted report over a year ago, and in that Committee, Shippers’ Council was represented by Chief Agu and Mrs Ifeoma. So for the current minister to turn around now to say that Shippers’ Council was not carried along does not arise, because, one, they were represented, even though, legally speaking, they are not a party to the agreement and they have no part to play in the concession agreement. Their role in the Act setting up Shippers’ Council does not include the role the minister is giving to them.

“They are not technically equipped to know what NPA or the terminal operators are doing. Their job does not include the role the minister is giving to them, so.whatever the minister is doing is totally illegal and has no place in law. It is an overkill.

“Secondly, even if they were, they were a party to the committee that okayed the renewal because they were fully represented by no less a person of Chief Agu and Ifeoma. So that means they already confirmed. So what does the minister want them to confirm that has not been confirmed.

“The inter-ministerial committee, which comprised BPE, Federal Ministry of Justice, Ministry of Finance, Budget and National Planning, NPA, ICRC, and Shippers’ Council. The Committee, headed by the Permanent Secretary, Ministry of Transportation, Dr. Magdalene Ajani, was to check and recommend whether the concessionaire had fulfilled all the terms and conditions.”

The source noted that prior to the ICRC Act, it was the Bureau of Public Enterprises that was solely responsible. Renewal or whatever doesn’t even need to go to the Federal Executive Council. 

“In this particular case, the concession for five terminals, ENL, two terminals, Port and Cargo, one terminal, Josepdam Port, one terminal and AMS, in Warri, one terminal.

“Under the concession agreement, the concessionaire is supposed to indicate whether he wants to renew the concession or or not three years before the expiration, then if both parties are willing to continue with the concession they will now start the process of the renewal. 

“It is supposed to be renewed at least, two years before the expiration of the agreement. If NPA, the landlord, is not renewing the agreement, two years to the expiration, the concessionaire will start handing the facility over to NPA.

“Bear in mind that the concessionaire who is still interested in the concession must indicate in writing at least three years before the expiration of the concession. 

“In this case, all the companies mentioned earlier indicated their willingness to continue with the concession at the appropriate time. They fulfilled all the terms and conditions but, as it were, the then Minister of Transportation, Rotimi Amaechi, decided not to allow the concession go through the normal process. 

“The National Assembly even had to intervene, it summond the Ministry of Transportation, and all the regulatory agencies, ICRC, BPE, Shippers’ Council to state why they were not renewing the concession. 

“The National Assembly directed them to renew the agreement with a deadline, which eventually was not obeyed. In the course of it, the Ministry of Transportation granted lease of extension, first six months and another six months. But the National Assembly said the extension granted was illegal and then mandated the Ministry of Transportation to renew immediately, which of course was not done.

“Then came a new minister, Eng. Sambo. The new minister instructed NPA to ensure that the concession was renewed within 45 days, and as it were, NPA needed to get compliance certificate from ICRC, which they had since issued. ICRC had issued compliance certificates that the concessionaire complied and okayed the renewal.

“Moreover, the agency that is mandated to confirm everything, the ICRC, has done its report, which was received by the Minister of Transportation. Sincerely speaking, they were not even supposed to send the report to the Federal Executive Council, but they did and they were asked to step it down to be re-presented. Re-present does not mean giving power to a body that lacks power.”