How 18 terminal operators owe FG N490bn – The Sun Nigeria
By Steve Agbota
New facts have emerged about the N490 billion reportedly owed to the Nigerian Ports Authority (NPA) by 18 terminal operators.
The facts came amid media reports Monday and Tuesday that operators’ total debt to the NPA was US$753 million and N1.61 billion (N490 billion cumulative).
A source familiar with the matter has clarified that the debt accumulated between 2006 and 2019, adding that the period from 2020 to 2022 was not part of the reported debt.
According to the source: “The debt is from the period 2006 to 2019 and the debt figures are composed of, among other things, property rents, lease fees and transit fees as specified in the concession contracts.”
However, he said there had been recoveries during the period and there had also been bad debts.
He specifically stated, “There were recoveries during the period and it is non-recoverable debt due to issues such as volume changes, minimum gross tonnage (GMT)/penalties and polluted areas, among others.”
When asked to explain the reasons why debts are not collected, he explained that volume change means volume adjustment, for example.
“The concluded contractual agreement states that the rental fee is paid in full if the percentage deviation between the actual performance and the forecast volume is within minus 10 percent to plus 10 percent.
“However, if the percentage variation performance is more than minus 10 percent to plus 10 percent, the lease fee payable will be adjusted by a corresponding percentage. Therefore, the adjustment is made against the lease fee payable by the percentage change in volume,” he explained.
He stated that the impacted areas refer to “areas that have been affected due to factors not caused by the tenant, such as reaching the concessionaire, and this results from the inability of the concessionaire to meet the commitment.”
According to the official: “VAT unpaid (VAT) refers to the VAT element of unpaid lease fees resulting from the adjustment caused by the volume change defined above,” while “penalty refers to the financial burden incurred for failure to comply with the terms will be suffered payment in a contractual agreement. This is due to the concessionaire not paying within the time/days specified in the contractual agreement. Simply put, it refers to a late payment fee.”
An agency official, speaking on condition of anonymity, also revealed that the number quoted in the press in connection with the 2019 Auditor General’s report does not reflect current indebtedness to the NPA.
According to him, “It is important to clarify that of the $852,093,731.10 reported in the Federation Auditor General’s report and reported in the media, $504,663,452.37 represents an uncollectible portion due to volume changes and disputes ; $66,627,342.76 represents an uncollectible portion due to Minimum Gross Tonnage (GMT); $19,619,459.00 represents an uncollectible portion due to contaminated areas; while the sum of $98,114,442.46 was collected, leaving the sum of $163,069034.51 as the actual amount owed only by three (3) of the terminal operators.
“It is very important to note that the bad debts are the sum of the above GMT (a key performance indicator) that the terminal operators were unable to meet mainly due to changes in government policies (issues such as acts of God, infrastructure decay, poor road network) outside of the port and others.”
He also pointed out that some of the debts are legacy debts “owed by a government agency that has converted into a limited liability company and for which the agency is working out arrangements with the relevant parties to settle them accordingly.” collect”.
He expressed optimism that “there will be a resolution and recovery of what is due to the NPA by the end of 2022” with the agency, which is already in an advanced stage of talks to resolve the dispute over these amounts.
He also hinted at the establishment in late 2017 of an interagency committee made up of NPA, Federal Department of Transportation (FMOT), Department of Justice (FMOJ), Bureau of Public Enterprises (BPE) and Infrastructure Concession Regulatory Commission (ICRC) tasked with reviewing the concession agreement, which has led to some anomalies.
According to him, the committee had already developed a template to address the inherent anomalies in the arrangements that allowed the accumulation of such debts to prevent a recurrence.
The official went on to say that the relationship between the NPA and terminal operators is an ongoing business, which entails reconciliation at every point along the way.
He reiterated the fact that the NPA is in control of the debt situation, saying that the agency has mechanisms in place to recover all terminal operators’ debts.
He therefore dismissed “all the clamor in the media room about the indebtedness of terminal operators” as unnecessary and inappropriate.