Facts And Fallacies Of Channel Management

The Administrative panel set up to probe the management of the Nigerian Ports Authority (NPA) on the watch of its suspended Managing Director, Hadiza Bala Usman, has begun sitting. One of the issues that will be raised at the hearing is channel management.

A number of questions will be asked: what is the state of the channels? What is the status of the contract for the Joint Venture Partnership for channel management (capital/maintenance and wreck removal)? Has the contract been awarded after the ministerial directive in August 2020 that further contract award in respect of the channel management should be put on hold?

 The Ministry of Transportation had explained that it objected to the award of contracts for the management of channels by the Nigerian Ports Authority (NPA) because it is more cost-effective for the NPA to procure necessary equipment and execute the contracts in-house. From available records, the NPA under Hadiza’s administration had yet to award any contract before the current feud, contrary to insinuations that the NPA ignored a ministerial directive on the issue.

The Ministry had, in a statement by its Permanent Secretary, Dr Magdalene Ajani, disclosed that while channel management contracts had been routinely awarded over the years by the NPA at a cost of between N50 billion and N60 billion on an annual basis, Amaechi had adopted a firm position that the NPA should undertake the job of channel management on an in-house basis through the acquisition of the necessary machinery and professional capacity to stop the humongous annual sums paid out to dredging contractors by the agency.

The ministry had claimed in the statement that the NPA did not deem it necessary to date to respond to the ministerial directives, despite the fact that the above letter was duly received by the NPA on February 2, 2021. But there are claims, strengthened by some facts and figures, on which a critical mind could make some logical inferences. The first is that the contract for the Joint Venture Partnership for channel management has not been awarded as it is still undergoing procurement. This is verifiable and if discovered to be otherwise, subject to rebuttal. In line with due process, the award of the contract must go to the Ministerial Tenders’ Board and thereafter to the Federal Executive Council (FEC) for approval.

The alternative narrative is that the Minister had requested that the NPA should extend the existing JV partners (in respect of the Channels contract) for one year at the expiration of their 15-year contract in August 2020, and that, however, in line with the Public Procurement Act (PPA), the NPA had in line with the Minister’s directive, sought the “no-Objection” of the Bureau of Public Procurement (BPP) to extend the contract for one year; but the BPP declined the request and directed the NPA to proceed and conduct a public tender for the Joint Venture Partner.

Furthering the narrative, it was sufficiently established that following the decline by the BPP to grant the extension directed by the Minister, he (the Minister) then sent a letter to the NPA that it (NPA) should procure the dredgers and not proceed with the tender and also to provide information about costs in wreck removal.  It was at this point, as learnt, that critical issues of budgetary provisions and due process reared their heads.  It was germane to consider the financial capability of the NPA to procure the dredgers as directed by the Minister in the context of budgetary provisions.  It was confirmed that the procurement of dredgers was not provided for in the 2020 supplementary budget and 2021 main budget. So, it was impossible to activate the ministerial directive to procure.

Some had argued that the money could be vired from some subheads in the budget, but they failed to appreciate the length of time it would take the NPA to procure the dredgers even it if had obtained budgetary virement. Again, the entire gamut of the process of procurement and maintenance is also critical. The more significant question to address between procurement and maintenance weighs on the side of maintenance, to wit: does the NPA have the manpower resources and the requisite skill set to do the maintenance and wreck removals? It is clear in the face of the question that since in the meantime the NPA does not have the manpower resources to handle the equipment, the JV contractors should have subsisted but for the BPP’s objection.

Since the directive that the NPA should procure dredgers was not as simple as the directive came, the claim and contention over sidestepping the ministerial directive should be resolved in favour of the NPA and its suspended Managing Director. But then the implication of the “delay” was that the extension of one year that the Minister wanted would be got through the back door. So, what exactly is the Minister’s anger against the backdrop of the fact that he had earlier directed the extension of the contract for the JVP for another one year, if not that the BPP raised the objection that has created the Elephant in the room?

Looking at the position of the minister on the procurement of equipment by the NPA to execute the job of channel management in-house dispassionately, one should also consider the amount of damage procurement of the equipment would do to the coffers of the NPA/Federal Government.  The current market prices according to some industry sources are staggering.  These are the equipment that JV companies use globally for the management of channels. It is the reason channels management is done globally through third party contractors with a track record of performance and financial capacity to absorb the possible shocks that arise during job execution. They could afford the equipment which they deploy in various project sites globally. Would the minister expect this behemoth of equipment to be procured at the snap of the fingers or at his directive?

The minister as a man of courage should call out Hadiza such that it would be impracticable for her to put up a defence that would exculpate her.

For instance, in one of the claims against Hadiza Bala Usman, they alleged failure by the NPA under her to remit N165 billion into the Consolidated Revenue Fund (CRF) account of the federation.  Those making this allegation do not understand the guiding principle for remittance of operating surpluses. According to the laws guiding the remittance, such amount to be remitted into the CRF are arrived at upon the audit of the accounts of the government agency concerned. What the accusers are talking about are calculations arrived at from budget provisions rather than the audited financial statements of the NPA.

The truth is that the Minister requested that the NPA should extend the existing JV partners for one year at the expiration of their 15-year contract in August 2020.  In line with the Public Procurement Act, the Authority sought no objection to extending the contract for one year in line with the Minister’s directive but the Bureau of Public Procurement, BPP, declined the request and directed the Authority to rather proceed to conduct public tenders for the JV partner.

Can it be verified that when the Authority notified the Minister about this development, he sent a letter directing the Authority to procure the dredgers and provide information about costs of wreck removal instead of proceeding with the tender. But there are many challenges to the execution of this directive namely: How can the authority procure dredgers when they are not within its budget? How long will it take for the authority to procure the dredgers even if it obtained budget virement? What is the cost of buying the dredger and its maintenance? Has the authority the skill and manpower resources to do the capital, maintenance, and wreck removals? To boot and more importantly, has there been any award of dredging contract and has the tender been completed? Sancta simplicitas!

Onwuachu, a lawyer, wrote from Yaba, Lagos.

Culled from TheGuardian