$852m operator’s debt: How infrastructure decay, govt policies hinder recovery of debts — NPA

The Nigerian Ports Authority (NPA) has attributed infrastructure decay, government policies as some of the reasons hindering the recovery of debts owed the agency.

The agency made this known on Sunday in a statement clarifying the probe by the Senate Committee on Public Accounts.

The agency noted that the $852,093,731.10 cited in the Auditor General of the Federation’s report, and it claimed that a total of $232,354,156.43 out of the sum had been recovered.

Managing director of the NPA, Mohammed Bello-Koko, who appeared before the Committee, said the House Committee on Public Accounts had, in the 9th Assembly, thoroughly verified the money and had given the Authority a clean bill of health.

Bello-Koko explained that the misunderstanding between the position of the Senate and House of Representatives Public Accounts Committees arose from the continuous repetition of sums dating back to the period before the 2006 port concession, which the current NPA Management had already accounted for. Still, the sums had yet to be expunged from its books.

“Most of the debts date back decades. I mean legacy debts from Nigerian National Shipping Line Ltd and the concession period. But we have been carrying these debts in our books and impairing the amounts, thereby making provisions for all such debts. We have written to the Auditor-General of the Federation on the procedure to take them out of our books and solicited for the support of the Senate in this regard,” he said.

He assured that the NPA will be accountable, adding that the debt includes estate rents, lease fees and throughput charges among others as stipulated in the Concession Agreements.

“The debts date back to the period 2006 to 2019, and there have been recoveries and some unrecoverable debts owing to issues such as Volume Change, Gross Minimum Tonnage (GMT)/Penalties, and Encumbered Areas, among others,” he said.

Giving insight on the recoveries, he said the figure quoted relates to the 2019 Auditor General’s report and it doesn’t reflect the current position of indebtedness to NPA.

He said a total of $232,354,156.43 had been recovered. At the same time, $504,663,452.37 balance constitutes an uncollectible portion due to volume change and contentions, $54,663,452.37 constitutes uncollectible portion due to GMT, $19,619,459.00 constitutes portion due to encumbered areas, $11,908,355.82 constitutes various penalties imposed on the terminal operators for not meeting set standards and $28,693,607.07 represents VAT of said amount.

He said N269 million has been recovered from the N1.8 billion concessionaire debt, leaving a balance of N1.6 billion, which represents encumbered areas of the terminals.

He said a total of $10.6 million had been recovered from the $67 million outstanding estate rent, ship dues and service boats.

Bello-Koko said the uncollectible debts are summation of GMT, which is a performance metric that Terminal Operators could not meet because of change in government policies and infrastructure decay.

According to him; “Some of the other debts are also legacy debts being owed by a government agency which metamorphosed into a limited liability company and for which the Authority is working out modalities with the relevant parties to recover accordingly.”

He confirmed that the Authority was in advanced talks to resolve the disputes surrounding these amounts, pointing out that all outstanding amounts due to NPA had been accounted for by the end of 2022.

Bello-Koko disclosed that the management of the Authority, in a concerted effort to correct the anomalies as seen in the concession agreements, engaged the World Bank to provide consultancy services for its review. At the same time, an inter-agency committee comprising NPA, FMOT, FMOJ, BPE and ICRC developed a template to address the inherent anomalies in the agreements that allowed for the accumulation of such debts and to forestall a recurrence.

He added that it has led to the signing of a supplemental concession/legal agreement, which will come into effect shortly.