INTELS waived $193m debt to resolve service boat contract-NPA

BY GODWIN OBI

The Nigerian Ports Authority (NPA) said that INTELS Nigeria Limited waived $193 million as part of efforts to resolve the stalemate on the service the pilotage contract with the federal government.
The NPA insisted that the agreement reached with INTELS was done in national interest adding that revenue generation will increase as a result of the effort.
The NPA also praised the Minister of Transportation, Marine and Blue Economy, Adegbeyega Oyetola for working tirelessly to ensure that the crisis is resolved.
According to NPA, Oyetola was disheartened by the needless loss of revenue as a result of the impasse adding that showed concern and patriotism in resolving the dispute.
The NPA added that Nigeria will save $326.895 million from the agreement it reached with INTELS on the contentious pilotage contract.
The authority said the Federal Government overnment will earn a benefit to the tune of over $500,000,000.00 – taking into consideration the interest waiver of $193,317,556, the reduction in interest rate on the outstanding debt from 6-months LIBOR rate + 6.5 per cent to 6-months SOFR rate + 3 per cent, the spread of the repayment of the debt over 15 years, with the first two years interest-free and the reduction in commission from 28 per cent to 24.5 per cent.
In a statement tagged, “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 decried the misinterpretation in a section of the media, citing a letter issued by the Port Manager, Lagos Port Complex, Apapa and addressed to Shipping Companies on the matter.’

“It is has become necessary to put the record straight for the benefit of the public and the generality of stakeholders in the Port industry. This is also to avoid distortions and conjectures, which may arise by reason of wrong interpretation of the aforementioned letter, “the NPA said.
Giving a breakdown of the agreement, the NPA said it agreed a waiver of the sum of $100,000,000 being part of the accrued interest as at 31st July, 2023 on the indebtedness to Deep Offshore Services Limited under the Phase 4B agreement.
“A further waiver of the interest accruing on the outstanding debt under the Phase 4B Agreement for the period of two years commencing from 1st of July 2023 and ending on the 30th of July, 2023 which is estimated in the sum of $93,317,556.
“Reduction of the interest rate on the indebtedness to Deep Offshore Services Limited from 6-months LIBOR rate + 6.5% to 6-months SOFR rate + 3 per cent effective from the date of execution of Supplemental Agreement. The Authority will be saving a total sum of US$ 326,895,226 as a result of waiver of part of accrued interest and reduction of interest rate from 6.5% to 3% on the debt over the next 15 years.
“Reduction of the agency commission on Pilotage collections from 28% to a lower commission of 24.5 per cent as opposed to increasing it due to astronomical rise in cost of operations. The proposed spread of the debt of $522,433,453.25 to be paid back over a 15-year period 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, “it stated.
The above facts, the NPA said, represent the true position on the matter adding that, “The interest of the authority is to ensure that services are provided in line with international best practices and to enhance the revenue profile of the federal government. In order to mitigate the attendant loss of revenue and surmount the legal impasse created by the dispute, the authority proposed a settlement initiative with INTELS, which was submitted to the to the federal government through the Ministry of Transportation.
“Intels also made proposal for settlement on behalf of itself and Deep Offshore Services Nigeria Limited. Protracted negotiations followed and the parties eventually reached a settlement following remarkable concessions by Intels/Deep Offshore and verifiable gains by NPA/the federal government.
“The authority was thereafter sued by Pacific Silverline Limited, Nexttee Oil and Gas Trading Company Nigeria Limited, ICA Logistics Limited and Ishasha Investments Limited at the Federal High Court, Lagos in suit No. FHC/L/CS/1772/2022 seeking declarative reliefs and an injunction restraining the Authority and the Honourable Attorney General of the Federation from awarding the contract for the Service Boat Operations Monitoring contract in the four pilotage districts to any other entity other than one which participated fully in the procurement process.
“The Federal High Court on the 11th of July, 2023 upheld the objection of the authority and struck out the suit. The claimants have since filed an appeal at the Court of Appeal against the ruling of the Federal High Court and also applied for an injunction to restrain the Authority from executing the ruling of the Court. The appeal is pending at the Court of Appeal, Lagos and no date has been fixed for the hearing of same.
“Messrs Pacific Silverline Limited recently filed another suit at the Federal High Court, Kano in suit no. FHC/KN/CS/245/2023 against the Honourable Attorney General of the Federation challenging the approval granted the authority to settle the cases between the Authority and Intels Nigeria Limited. The Federal High Court wholly dismissed the said suit on the 30th of November, 2023.”
It added: “In order to mitigate the attendant loss of revenue and surmount the legal impasse created by the dispute, the authority proposed a settlement initiative with INTELS which was submitted to the federal government through the Ministry of Transportation. Intels also made proposal for settlement on behalf of itself and Deep Offshore Services Nigeria Limited. Protracted negotiations followed and the parties eventually reached a settlement following remarkable concessions by Intels/Deep Offshore and verifiable gains by NPA/the federal government,” it added.

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