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NPA attributes non-remittance of $852 million, N1.8 billion to faulty concession agreements

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Mr Mohammed Bello Koko

The Nigerian Ports Authority (NPA) has attributed the non-remittance of $852 million and N1.8 billion to faulty concession agreements signed with the private operators by the Federal Government in 2006.

This was made known by the Managing Director of NPA, Mohammed Bello-Koko, on Thursday, while responding to the enquires by the Senate Committee on Public Accounts based on the audit queries raised against the authority by the Office of the Auditor General of the Federation.

Bello-Koko, who was directed to appear before the senate committee alongside other management staff, absolved the authority over these unremitted funds from private operators.

He explained to the committee that the lump sums of $852 million and N1.8 billion, raised in the queries, were an accumulation of unremitted funds from private port operators who came on board through 2006 concession agreement.

Concession agreements faulty

  • Bello-Koko said, “The $852 million and N1.8 billion unremittance by private operators to NPA, are largely caused by faulty concession agreements the Federal Government signed with them in 2006 when the ports were concessioned.
  • “The concession agreements were faulty in the sense that some of the operators are facing encumbrances in different ways to cover the space concessioned for them which also encumbered them to remit what is due from them to NPA.
  • “The encumbrances in question range from the inaccessibility of some portions of areas leased, by concessionaire, communal encumbrance and volume change or turnage amount.”

He told the committee members that the Federal Government that signed the concession agreement with the private operators even contributed to encumbrances faced by the concessionaires at the beginning by not removing structures that belonged to it from the right of way of the affected concessionaires.

More insight

Going further, the NPA boss said,

  • Out of the $852m, going by our in-house assessment, $504m are accumulated unremitted levies due to encumbered areas.
  • “However, we have been able to recover $232.2m and N269.4m from the N1.8bn.
  • “We have gotten consultancy from the World Bank for review of the concession agreements which would be free from any form of encumbrances.’’

On the second query of outstanding debts of $ 67.45 million and N32.266bn, the NPA boss told the committee members that the debts were not incurred by the NPA but by the defunct Nigerian Shippers Councils whose debtors are no longer traceable.

What you should know

  • The Office of the Auditor General of the Federation had in its 2019 Audit Report, alleged that NPA failed to collect remittances which amounted to $852 million and N1.8 billion from terminal operators.
  • This was part of the 12 audit queries issued by the Office of the Auditor-General for the Federation against the NPA based on the authority’s financial statement for the 2019 financial year.
  • The Senate Committee on Public Accounts, on the strength of the audit queries against NPA on Tuesday, directed its Managing Director, Mohammed Bello-Koko, and other management staff, to appear before it unfailingly within 48 hours.

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