As disagreement over treasury single account compliance lingered between it and the Nigerian government, the management of Integrated Logistics Services Limited, Intels, has withheld more than N40 billion it earned between January and September 2017 —including billions that should have gone into the federation account as Nigeria’s cut.
Documents seen showed that the firm earned $132,957,286.18 (or N40.55 billion at N305/per dollar) within the first nine months of the year, but failed to remit percentage due, which it calculates at its own discretion due to a lack of formal sharing arrangement, to the government.
The only boat services revenue received by NPA was a paltry $26,502.52 charge which was deposited directly by a customer into NPA’s TSA account at Central Bank, documents show.
The amount represented 0.07 percent of the $132,957,286.18 that Intels, which is partly owned by former Vice President Atiku Abubakar, has paid so far this year.
The withheld fund is part the revenues Nigerian government could have tapped into to beat back its 2017 budget shortfall.
The stalemate over compliance with the administration’s TSA office compelled the Nigerian Ports Authority to discontinue its contractual obligations with Intels for the collection of boat services revenue for oil and gas cargoes at different ports in the country.
The NPA has been locked in a protracted dispute with Intels since 2016 when the agency first demanded that all revenues collected by the firm from service boat operators be paid into a government-run account in line with the TSA public accounting mechanism.
In a June 28, 2016 letter, for instance, the maritime agency warned Intels that the firm was violating extant concession regulations by insisting on collecting revenues into its bank accounts rather than the NPA’s TSA account with the CBN.
Officials also instructed Intels to start computing identification and payment profile of service boats individually, rather than the wholesale listing of all service boats under the name of Intels. This would allow each service boat operator pay into NPA’s transit accounts in local banks for onward remittance to the CBN.
The NPA also devised a new standard operating procedure that includes a new revenue-sharing agreement. Under the new SOP, Intels will keep 28 per cent of collected revenues. Of the remaining 72 per cent, Intels will pay 30 per cent to the NPA and 70 per cent will go into amortisation, settlement of outstanding loans which Intels incurred in the course of developing and maintaining the pilotage districts.
The SOP also included provisions for Intel’s 28 per cent commission and 70 per cent amortisation to be transferred into the company’s account by the Nigerian government within seven days, failure of which will attract an interest of 0.15 per cent to be incurred by the government in favour of Intels.
While Intels accepted the new sharing arrangement, the firm said it could not comply with the TSA policy because its loans were backed by the revenue inflows. The firm also demanded a restructuring of its outstanding loans to the NPA because the existing 27-year plan for repayment was not sustainable.
NPA officials said that Intels had been reluctant to allow revenues go into the NPA’s account because the firm might have been concealing actual revenues it had collected over the years.
Intels officials declined to comment on the matter with PREMIUM TIMES throughout the weekend. The company’s spokesperson, Bolaji Akinola, neither acknowledged nor replied messages and calls to his telephone.
‘Mutual accord contract’
The NPA engaged Intels on August 9, 2010, to coordinate oil and gas related activities in the compulsory pilotage district within the country’s exclusive economic zone.
Amongst the six key aims of the contract, which has a duration of 10 years, was for Intels to collect all revenues for service boat operations and other relevant dues invoiced against vessel owners.
The contract agreement stated that Intels should take a 28 per cent commission from collected revenues, which includes a 10 per cent withholding tax but excluding five percent value-added tax.
But the agreement did not state how much should go to NPA. It only mandated Intels to give NPA a share of the remaining 72 per cent while the rest goes towards amortisation.
The missing clause then left Intels with the discretionary powers to give NPA any share it found convenience.
This allowed Intels to give NPA an average of 18 percent of the 72 per cent from 2013 to early 2014.
By mid-2014, Intels began paying 33 per cent of the 72 per cent to NPA, following demands by ports officials that the agency needed to improve its liquidity position, documents showed.
The company paid NPA 29.59 per cent (or $62,093,087) and 23.79 (or $40,047,458) of the 72 per cent of collected revenues in 2015 and 2016, respectively, documents showed.
But in 2016, NPA’s new managing director, Hadiza Bala Usman, demanded an end to the arbitrary allocation of revenues by proposing a binding 70:30 split in favour of Intels and NPA, respectively, from the shareable 72 percent of collected revenues.
This demand, as well as others, including the need for compliant with TSA regulations, triggered the confrontation that lingered until now.
Attorney-General Abubakar Malami advised NPA to abort the contract because it failed to comply with Nigerian Constitution, to begin with.
After initially condemning NPA’s unilateral cancellation of the contract, Intels later issued an apology to the ports authority, with its co-founder Gabriele Volpi telling THISDAY the company was ready to comply with all demands by the government.
We later gathered that Ms. Bala Usman had not received an apology letter from Intels, but said she would entertain such communication if it eventually arrives at her desk.
Comments
Post a Comment