INTELS Nigeria Limited has waived a $193 million debt in order to resolve the ongoing controversy surrounding the pilotage contract with the Nigerian federal government. The resolution was announced by the Nigerian Ports Authority (NPA).
The NPA stated that this resolution, reached in the national interest, is anticipated to boost revenue generation by entrusting the service boat contract to INTELS.
Acknowledging the efforts of Adegbeyega Oyetola, Minister of Transportation, Marine, and Blue Economy, in resolving the crisis, NPA expressed disheartenment over the unnecessary revenue loss suffered. However, it highlighted that the agreement with INTELS is expected to save Nigeria $326.895 million, with the federal government benefiting by over $500 million.
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”, NPA revealed the specifics of the agreement.
This includes a waiver of $100 million of accrued interest, a further waiver on interest for two years, and a reduction in the interest rate on the indebtedness to Deep Offshore Services Limited. The total savings over the next 15 years are estimated at $326,895,226.
Additionally, the agency disclosed a reduction in the agency commission on pilotage collections from 28 percent to 24.5 percent. The NPA emphasized that the restructuring of the debt over 15 years will significantly benefit the Authority, allowing preservation of funds for other operational needs.
NPA further clarified its commitment to international best practices, revenue enhancement for the federal government, and the mitigation of revenue loss. It noted that INTELS and Deep Offshore Services Nigeria Limited proposed settlement terms, which were subsequently approved by the federal government on August 18, 2023.
NPA further informed that the Federal High Court’s judgment on September 21, 2023, recognized the settlement, leading to the execution of the managing agency agreement between NPA and INTELS. Following the expiration of the Service Boat Management Agreement, NPA took over operations but faced challenges due to a lack of technology, resulting in a decline in revenue. The agency admitted errors in its past management and detailed its procurement process for new service providers.
Explaining further the authority said despite legal challenges, including a lawsuit against the authority, the Federal High Court’s decision in July 2023 upheld NPA’s objection and struck out the suit.
The NPA’s proposed settlement initiative, submitted to the federal government through the Ministry of Transportation, ultimately led to successful negotiations and concessions by INTELS and Deep Offshore Services, bringing an end to the prolonged dispute.
