How Amaechi, LADOL moved against Intels, crushed Atiku’s monopoly

As many Nigerians speculate on Federal Government’s decision to terminate the contract between the Nigerian Ports Authority and Alhaji Atiku Abubakar’s multi-billion dollar cash cow Intels, many assume it to be a result of a  political disagreement, however the facts of the matter may not be so.

Former vice president Atiku Abubakar may indeed have many political foes but it was his near stranglehold monopoly on oil and gas cargoes that was his undoing. Atiku’s sweet heart deal with the Nigerian Ports Authority is the kind of deal only a select privileged few in the Nigerian economy cabal are capable of entering into.

Atiku’s position as a top Peoples Democratic Party chieftain, former customs boss and former national leader secured him the deal and sustained the deal for him.

However it was other players in the logistics business, namely Lagos Deep Offshore Logistics Base (LADOL), founded by Ladi Jadesinmi that took the bull by the horns and sued the Goodluck Jonathan-led Federal Government over its concessioning of all oil and gas cargoes at the NPA terminals in Onne, Warri, and Calabar.

Earlier this year, the Minister for Transportation, Rotimi Amaechi had hinted that his office was working on a legal solution to the Intels/Atiku monopoly and appealed to industry stakeholders to maintain the status quo until a solution arose.

“If indeed there was such agreement that all oil and gas cargoes should be brought to Warri, Onne and Calabar, then it would be wrong to take part of somebody’s job‎ and give it to another person,” Amaechi had said.

CEO of LADOL, Mrs. Emmy Jadesinmi had said that there had been presidential directives from both Olusegun Obasanjo and Umaru Yaradua cancelling the diversion of all oil and gas caroges to eastern ports.

She argued that diverting the cargoes would create a monopoly and unfair advantage for some operators at the expense of others including LADOL which had invested to $500 million in facilities and equipment.

According to a Premium Times report, in May 2016, the Minister of Transportation, Rotimi Amaechi, wrote President Buhari about various issues affecting the concession of Nigerian ports to private businesses. In July, the presidency forwarded the letter to the Attorney general of the federation (AGF), Mr. Malami, for his legal opinion on the various bottlenecks and a review of some of the policies that were adopted since 2000.

In April 2017, President Buhari approved the recommendations of the AGF which included the reversal of the exclusive handling of oil and gas cargoes at Intels controlled ports.

In 2008, Mr. Yar’Adua’s administration reviewed the agreement and issued a circular to the effect that irrespective for the designation of Onne, Warri and Calabar ports as oil and gas terminals, importers could approach any port of their preference for business.

The directive came after a move by the Minister of Transportation at the time, Diezani Alison-Madueke, asked the BPE to re-categorise the ports so that Intels could be given exclusive right to handle oil and gas cargoes. Mrs. Alison-Madueke’s circular also appointed Intels as managing agent in Lagos Pilotage District.

But in a letter to his chief economic adviser, the minister of transportation and the managing director of the NPA, Mr. Yar’Adua reversed the re-categorisation because of its “potential damage the said circular was capable of wreaking on the Nigerian economy”, the report claimed.

“The circular issued by the minister reversing the approval of the former President in 2006 (to the effect that oil and gas importers are free to choose ports of their preference for the cargoes) be withdrawn immediately and the approval of the former President stands and cannot be reversed without referring to the President.

“The appointment of Intels as Managing Agents at the Lagos pilotage district is hereby revoked. Another competent agent should be appointed to allow for competition. These decisions take effect immediately,” the letter by Mr. Yar’Adua read.

But In 2014, another directive by Mr. Yar’Adua successor, Mr. Jonathan, designated Onne, Warri and Calabar Ports as exclusive oil and gas terminals created confusion in the industry.

The new directive was given on January 18, 2014 but a month later, Mr. Jonathan surprisingly suspended the policy he had approved. He however did not state which policy will now govern the handling of oil and gas cargoes.

On April 20, 2015, following a recommendation by Ministry of Transport, Mr. Jonathan gave another directive stating that “all oil and gas related cargoes must be handled only at the designated terminals as in the letter from the BPE”.

This gave birth to the agitations by concessionaires and ultimately triggered the decision of Ladol to sue the government to protect its interest.

But Mr. Malami stated that the BPE letter referred to by Mr. Jonathan was on written on July 10, 2008 to Mrs. Alison-Madueke. He said the letter was designed to deliberately misinform Mr. Jonathan.

“The fact are that former President Yar’Adua had vide his directives on 4th August, 2008 overridden any such position by directing that the earlier approval by the President Obasanjo (which gave the oil and gas operators the liberty to choose terminals) should be restored. Therefore, as at 2015, when president Jonathan gave the purported approval, the policy position was as affirmed by President Yar’Aduain 2008 and not the erroneous position conveyed in the memorandum by the former Minister of Transport,” Mr Malami wrote.

In its review of the controversies around the concession of the ports, the office of the AGF said that the categorisation of the terminals in Onne, Warri and Calabar as exclusively oil and gas terminals “is not only unknown to the shipping industry, it encourages monopoly and therefore inimical to the investment climate in the country.”

The AGF office also argued that an independent verification it undertook also confirmed that in the global shipping industry, the three broad categorisations of ports and terminals are Bulk Cargo, Container Cargo and multi-purpose Cargo. It added that oil and gas is generally not classified as a category in itself.

Thus the office of the AGF recommended that “government should pursue a policy of liberalisation of ports and terminals use which emphasises the liberty of importers to so choose their ports/terminals.”

It added that this will promote competition, value for money and even spread of port infrastructure along the country’s coastal belt.

 

 

Source: PT

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