De-categorization To lead To Loss of Govt Revenue- Intels
De-categorization of
port terminals by Nigerian Ports Authority (NPA) will result in huge revenue
loss to the Federal Government, INTELS Nigeria Limited has said.
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, explained 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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