NPA Terminates JVA with NGETCL over Violation of Procurement Act

BPP raised memo in 2015 rendering the contract invalid

The Nigerian Ports Authority (NPA) has terminated the Joint Venture Agreement between the authority and a consortium led by Niger Global Engineering and Technical Company Limited (NGETCL) for not complying with the Public Procurement Act.

The NPA stated this in a letter dated August 22, 2017, addressed to the Managing Director of NGETCL handling the Calabar Channel project.

By terminating the agreement, the NPA has acted on the recommendation of the Bureau of Public Procurement, which had during the administration of former President Goodluck Jonathan condemned the contract and asked that its implementation should be stopped.

The latest letter titled, “Joint Venture Agreement between the Nigerian Ports Authority and the Consortium Led by Niger Global Engineering and Technical Company Limited” was obtained by THISDAY at the weekend.

It reads: “Please be informed that the Nigerian Ports Authority, as a statutory corporation, having established non-compliance with the provisions of the Public Procurement Act 2007 in the selection of the consortium led by your company as a party to the Joint Venture Agreement (JVA), cannot continue to maintain a JVA which is inconsistent with an extant law of Nigeria and therefore in breach of public policy. Accordingly, the authority is constrained to put an end to the JVA.”

The NPA, in the letter signed by its Board Secretary/Legal Adviser, E. I. Williams (Mrs), added: “Take note that the Joint Venture Agreement dated July 25, 2013 between the Nigerian Ports Authority and a consortium led by Niger Global Engineering and Technical Company Limited, including the Joint Venture Agreement dated January 25, 2013 between the same parties, is hereby terminated.”

NPA, through its subsidiary, Calabar Channel Management (CCM) was reported to have entered into a contract with NGETCL.

The contract, meant to dredge the Calabar Channel was awarded to NGETCL, but was allegedly condemned by the Bureau of Public Procurement for violating all due processes.

The issue later degenerated into a crisis, having caused conflict between NPA and the Chairman, Senate Committee on Customs, Excise and Tariff, Senator Hope Uzodinma, a former chairman of the company.

Efforts by THISDAY last night to get the reaction of the management of NGETCL was unsuccessful.

The recommendation for termination of the Calabar channel contract actually predates the President Muhammadu Buhari administration and the leadership of Ms. Hadiza Bala-Usman at NPA.

The former Director-General of BPP, Emeka Ezeh, had in a memo to the former President Goodluck Jonathan, on May 18, 2015, raised issues and made recommendations about the contract at the twilight of the administration.

In the memo obtained by THISDAY, Ezeh asked Jonathan to approve the termination of the contract, especially on the grounds that NGETCL hijacked the process of selection of the qualified companies. In fact, Ezeh alleged that NGETCL was fraudulent and did not follow the due process to get the contract.

According to the memo obtained by THISDAY, “At the end of the prequalification exercise, six companies were pre-qualified and submitted their technical and financial bids. Based on the tender evaluation, recommendation was made to the Bureau for Public Procurement for issuance of no objection certificate for the award of contract in favour of Messrs Lagos Channel Management Company in the sum of 120,331,193.47. Over N26 billion.

“The Bureau of Public Procurement on September 9, 2011, as a result of protest by Dredging and Reclamation Jan De Nul Limited, declined the issuance of a “NO OBJECTION’ certificate for the award of contract for the Dredging of Calabar Access Channel in favour of Messrs Lagos Channel Management Company Limited.

“Consequently, in November 2012, a representation was made to the President by the Bureau for Public Procurement for alternative bid through selective tendering. This was considered and approval was granted to invite six out of the companies that bidded initially along with Bonny Channel Company (BCC) and a new joint venture to be formed for managing the Calabar Channel under the name Calabar Channel Management Limited (CCML). At the time of the presidential approval for the re-procurement of the dredging contract for the Calabar Channel, CCML had not yet been incorporated as a JV with NPA, but a proposal to that effect was under consideration.

“The incorporation of CCML was necessary first to give it the required legal personality to enable it bid for the capital dredging of the Calabar Channel in line with presidential approval. It is expected that it would then proceed to handle the maintenance dredging when the capital dredging is completed. The proposed share structure of the JVC was to be 60 per cent for NPA 40 per cent for the consortium. It was at this stage that Niger Global Engineering Company Limited and its consortium hijacked the process. It signed a questionable Joint Venture Agreement with NPA and went ahead to CCML at the Corporate Affairs Commission (CAC) altering the share structure arrangement.”

“It was discovered that the Joint Venture Agreements curtained terms that were skewed and disadvantageous to the financial interest of the Nigerian Ports Authority (NPA) while some other parts extended the scope of work to include Ibaka Deep Sea Port in Akwa Ibom State, which was not within the Calabar Channel port.”

Ezeh therefore submitted: “Having examined the letter ref. T.0160/s.107/IX of June 10, 2014 forwarded to His Excellency by the HMOT, I wish to observe as follows:

· That the issue was presented to the President without any input from the Board of Directors of the Nigerian Ports Authority and the NPA had advised severally that any long-term maintenance contract should be after the capital dredging in line with the consultant’s opinion on the matter.