Intels decides revenue sharing formula with FG – NPA

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The House of Representatives heard on Wednesday that the revenue
collection contract between the Nigerian Ports Authority and
Integrated Logistics Services Limited hugely favoured the latter
such that the firm determined the Federal Government’s share.

The NPA and Intels signed a two-legged agreement in 2010
allowing the firm to collect revenue on behalf of the Federal
Government agency on some port operations.

The Managing Director, NPA, Hadiza Bala-Usman, told an ad hoc
committee of the House in Abuja that the agreement was silent on
the sharing formula of the revenue generated by the firm.

She stated this left Intels with the power to decide how much it
would remit to the Federal Government from any available balance
after it had taken a percentage for its services.

The committee, which is chaired by the Deputy Whip of the House,
Mr. Pally Iriase, is investigating the circumstances leading to the
termination of the contract last year.

Bala-Usman told the committee that the agreement she met on
assuming duties at the NPA in 2016 allowed Intels to take 28 per
cent of the generated revenue for its services.

She added that the balance of 72 per cent would later be shared
between the NPA and Intels.

However, she explained that it was Intels that decided how much
should go to the NPA from the 72 per cent, as the contract was
silent on that.

She stated, “The agreement was silent on this aspect. There was
nothing suggesting how the balance would be shared.

“So, this gave Intels the power to decide what share to leave
for the government and so on.”

The NPA MD recalled that up to 2013, the average monthly
remittance by Intels was $3m.

She added that the remittance rose to $5.6m in 2014 after some
negotiations and later dropped to $4m in subsequent years.

However, Bala-Usman informed the committee that a dispute arose
between the NPA and Intels in June 2016 after the firm declined to
comply with the Treasury Single Account policy of the
government.

She said the NPA communicated the government’s decision to have
all public revenues paid into a central account following which
invoices would be issued for Intels to be reimbursed.

She added, “But, Intels declined and chose to continue to keep
the revenue. In May 2017, we sought the advice of the Attorney
General of the Federation (Abubakar Malami), who appropriately
advised that Intels must comply with the TSA policy or the contract
should be terminated.

“Based on the advice of the AGF, a notice of termination was
issued to Intels.”

However, she admitted that following the face-off, Intels later
apologised to the NPA and agreed to comply with the TSA policy.

“So, since September 2017, Intels started complying with the
policy, though we have not received the advice of the AGF on the
withdrawal of the termination. But, they have been complying since
September 2017. Between 2016 and 2017, Intels had collected $48m,”
she added.

Out of the money, Bala-Usman said the NPA confirmed the
remittance of $28.1m into the TSA, while another payment of $14.5m
reported by Intels had yet to be confirmed.

According to the MD, both the NPA and Intels would have to do
some reconciliation to clarify whether the two payments came from
the $48m or from other sources.

Although, the lawmakers acknowledged that compliance with the
TSA policy was important, they noted that the manner in which the
NPA applied it to Intels was arbitrary, as it sought to ignore an
existing agreement.

However, they criticised those who drafted the agreement for
allowing Intels to get away with so much.

Commenting on the unfavourable nature of the agreement, Iriase
noted, “Nigeria is worse off with this type of arrangement.”