Nigeria: How Terminal Operators’ Debt Rose to N490bn Debt in 13 Years

Fresh facts have emerged about the N490 billion reportedly being owed the Nigerian Ports Authority (NPA) by 18 terminal operators.

A source familiar with the matter has clarified that the indebtedness accrued between 2006 and 2019, adding that the period covering 2020 to 2022 was not part of the reported indebtedness.

According to the source: “The debts date back to the period spanning 2006 to 2019 and the debt figures are composed of estate rents, lease fees and throughput charges among others as stipulated in the concession agreements.”

He, however, said that there had been recoveries within the period under review, and that there had also been unrecoverable debts.

He specifically disclosed: “There have been recoveries within the period under review, and they are unrecoverable debts owing to issues such as volume change, Gross Minimum Tonnage (GMT)/penalties, and encumbered areas, among others.”

On the factors hindering debt recovery, he stated that volume change, among other issues, were responsible.

“The Executed Contract Agreement stated that if the percentage variation between actual performance and projected volume is within minus 10% to plus 10%, the lease fee will be paid in full.

“However, if the percentage variation performance is more than minus 10% to plus 10%, the lease fee payable will be adjusted by an equivalent percentage. Therefore, the adjustment is against the lease fee payable by the percentage change in volume,” he explained.

An official of the Authority speaking under the condition of anonymity also disclosed that the figure quoted in the press related to the 2019 Auditor General’s report did not reflect the current position of indebtedness to NPA.

According to him: “It is pertinent to clarify that out of the $852,093,731.10 cited in the Auditor General of the Federation’s report and being circulated in the media, $504,663,452.37 constitutes uncollectible portion due to volume change and contentions; $66,627,342.76 constitutes uncollectible portion due to gross minimum tonnage (GMT); $19,619,459.00 constitutes uncollectible portion due to encumbered areas; while the sum of $98,114,442.46 has been recovered, leaving the sum of $163,069034.51 as the actual amount owed by only three (3) of the terminal operators.

He however expressed optimism that with the Authority already at an advanced stage of talks to resolve the disputes surrounding the said amount.

He also hinted about the setting up of an inter-agency committee comprising NPA, Federal Ministry of Transportation (FMOT), Federal Ministry of Justice (FMOJ), Bureau of Public Enterprises (BPE) and Infrastructure Concession Regulatory Commission (ICRC) in late 2017, with the task to undertake a review of the concession agreement.

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