EXCLUSIVE: How Amaechi, Hadiza Usman clashed over multibillion naira NPA contracts
The minister at least once ordered the cancellation of an invitation for bids for a contract in favour of the incumbent contractor.
Months before her suspension last week, the Managing Director of the Nigerian Ports Authority (NPA), Hadiza Usman, repeatedly faced off with her supervisor, the Minister of Transportation, Rotimi Amaechi, over the award of contracts, and Mr Amaechi at least once directed a procurement process be suspended in favour of an incumbent contractor, documents seen by PREMIUM TIMES have shown.
The disagreements drew in the Bureau of Public Procurement, the Attorney General of the Federation and the Chief of Staff to President Muhammadu Buhari, Ibrahim Gambari, who reported directives from the president to both parties and sought external advice to resolve the issues.
Ms Usman was suspended from office Thursday amid allegations by the minister that the NPA failed to remit N165 billion to the federation account. She denied wrongdoing and argued that the agency paid the due amount as provided by the Fiscal Responsibility Act. Her disagreements with the minister are believed to have played a role in her suspension.
Presidential spokesperson Garba Shehu announced that Mr Buhari had approved Mr Amaechi’s recommendation to set up an administrative panel of inquiry to investigate Ms Usman’s management of the NPA.
While inaugurating the probe panel Monday, the minister made clear the focus of the investigation is contracts and not remittances to the government.
The committee’s terms of reference, he said, include examining and investigating the administrative policies and strategies adopted by Ms Usman, and confirming her compliance with relevant laws and rules from 2016 till date.
“Examine and investigate issues leading to the termination of other contracts of NPA and confirm compliance with the terms of the respective contracts, court ruling and presidential directives,” The News Agency of Nigeria quoted Mr Amaechi as saying.
“Examine and investigate compliance with communication channel, as obtained in the public service.
“Examine and investigate the procurement of contracts from 2016 to date.
“Come up with suggestions and advice that would strengthen the operations of NPA and forestall such occurrences in future.
“And any other matter that may be necessary in the course of the assignment.”
Addressing those criticising the probe, the minister said: “This is in the discharge of our responsibility as a ministry and I don’t see why anybody is complaining.
“What is wrong in looking at what is happening in NPA? I don’t see what is wrong in that. As the Minister of Transportation for four years, I hardly know what is happening and I want to know now.
“The president agrees with me that it’s my responsibility as minister to find out what is going on.
“It worries me that people are saying we should not ask questions. Nobody has been indicted.”
The NPA Dredging Contract
Details seen by PREMIUM TIMES show that in one of the controversial contracts, the NPA had written the Bureau of Public Procurement, requesting to adopt a selective tender method for the engagement of nine dredging companies for the management of Port Access Channels across Lagos Pilotage, Bonny Pilotage, Warri and Excravos Pilotage Districts.
This newspaper understands that the value of the contract is N65 billion, with the Lagos channel contract valued at N31billion and the Bonny channel valued at N34 billion.
The NPA claimed its resolve to adopt selective tendering was due to the specialised nature of the service. It added that the subsisting contract with the Lagos Port Channel Management Company Joint Venture and the Bonny Channel Company were due to expire in December 2019 and June 2020, respectively. The move was approved by the Bureau of Public Procurement.
The minister, however, expressed concerns with the process and ordered it be cancelled and that the contractor be given a one-year extension. The minister said his directive was based on an advisory by the Bureau of Public Procurements to MDAs to suspend non-essential contracts as a result of the COVID-19 pandemic.
Ms Usman said in her memo that Mr Amaechi had complained about his ministry not being “carried along” in the process and had raised concerns about budgetary provisions for the contracts.
“You may please recall that in the course of the conversation, you also stated that the Federal Ministry of Transportation was not carried along before the advertisements went public contrary to an earlier Ministerial directive and expressed concern over budgetary provisions and the possible impacts of the COVID-19 pandemic on the procurement exercise,” she wrote in her letter to Mr Amaechi May 18, 2020.
Ms Usman argued that the subsisting contractors had been engaged for 15 years and that their contract was due to expire in August 2020. Ms Usman added that a charge made by the minister that the transport ministry was not “carried along” before the advertisement was made public by the NPA was corrected in a letter dated May 6.
The NPA boss explained further that concerns raised on budgetary constraints were not applicable to channel dredging which is central to the statutory responsibility of the ports and for which appropriate provisions had been made in the 2020 budget.
On COVID-19 concern raised by Mr Amaechi, Ms Usman said that would not affect the tender process because provisions had been made for courier submission and all were being done in line with the procurement law.
She concluded that if not satisfied with the facts presented by the NPA, Mr Amaechi should formally authorise the NPA to cancel the advertisement and extend the subsisting contract by an additional year.
In a letter dated June 2, 2020, the Ministry of Transport directed the NPA to withdraw the advertisement for the expression of interest for the dredging contract. The letter, signed by Pius Oteh, Director of Legal Services, said the ministry came to the conclusion after Mr Amaechi’s review of the NPA’s letter to that effect.
The ministry also directed that the subsisting contracts be extended by one year.
The transport ministry said its decision was made “in the overriding public interest” and the consequence of limited business environment caused by the outbreak of the coronavirus pandemic which could create a non-competitive procurement environment.
The ministry thereafter referenced a circular by the BPP which directed that all non-essential procurement processes that would not affect the activities of government be suspended in the light of the COVID-19 disruption.
The NPA complied with the minister’s directive and cancelled the procurement process. But the BPP, whose memo Mr Amaechi had referenced as the basis for his directive, strongly criticised the ministry and the NPA.
BPP Rebukes NPA, Ministry
In a letter dated June 18, 2020, the BPP argued that contrary to reservations raised about COVID-19, there were some activities of government that should not be delayed. “Nevertheless,” it said, “it is the responsibility of the BPP and not the FMT (Federal Ministry of Transportation) to approve the cancellation of a procurement process.”
The bureau warned that the NPA cannot unilaterally extend the tenures of engagement of the subsisting contractors without recourse to the public procurement act and directed the NPA to follow due process.
More importantly, the BPP wondered why the Ministry of Transport and the NPA decided to backtrack and cancel the advertisement of a contract it considered central to the operations of the NPA.
“Without any prejudice to the Bureau’s observation, the NPA, as the procurement entity, has the responsibility to decide whether or not this procurement is essential to their operations,” the BPP argued.
“Considering that these contracts have subsisted since 2005 i.e for about fifteen (15) years, it may not be in the best interest of Government to keep them any longer than necessary. As a matter of fact, the Bureau is concerned that the government is presently left at the mercy of the subsisting contractors without valid contracts.”
The Bureau thereafter directed that rather than cancel the advertisement for tender, it can allow an extension of six months to enable the NPA to carry out an International Bidding Process. It added that if the NPA is thereafter convinced that the cancellation is in the best interest of the public, it can cancel it.
Where the procurement is deemed as an essential service, the BPP advised that the NPA should forward all essential documents to it and make provision for prospective bidders to take advantage of courier services. It added that in line with Covid-19 guidelines, bidders are not expected to be present during the bidding ceremony.
PREMIUM TIMES learnt that based on the BPP letter, the NPA readvertised the contracts and proceeded with the procurement process. It informed the transportation ministry of that decision.
The ministry then indicated an interest in playing a role in the evaluation of the bids submitted by contractors, in what is clearly an unusual situation. The NPA agreed, although the process should have been for the ministry to await submissions by the NPA since it has to grant approval before the bids are forwarded to the BPE and the Federal Executive Council.
The bid evaluation session was held in late April, but the NPA was yet to complete the tender process for onward submission to the ministry when Ms Usman was suspended from office.
Meanwhile, after the NPA resumed the procurement process, Mr Amaechi’s ministry again wrote to the NPA directing it to suspend the tender process. He said instead, the agency should procure equipment and undertake the dredging itself.
Ms Usman then wrote to the president lamenting that the ministry’s directive was “another way of frustrating the conclusion the transparent process the Authority is conducting in line with the Public Procurement Act”.
She pleaded with the president to okay the continuation of the procurement process and approve NPA’s decision not to procure equipment for channel management as it does not have the skill set required to operate and maintain them.
The battle over INTELS contract
Aside from the disagreements over dredging contracts, documents seen by this newspaper also showed that both parties clashed over the contractual relationship between the NPA and Intels, a logistics firm.
PREMIUM TIMES reported the long-running disagreement between the NPA and Intels, leading to the termination of a boat operation contract being handled by the firm due to failure to comply with the Treasury Single Account directive of the Nigerian government in September 2020.
At the height of the crisis, the ministry of transport requested the president to direct the NPA to lift all orders against Intels, which has executed several contracts with the NPA for decades.
In a letter the ministry sent to the NPA, it directed the restoration of all contracts between the NPA and Intels, either suspended or purportedly terminated by the NPA. The letter, dated February 17 2021, refers to its earlier letter conveying a presidential approval to that effect.
The president, through the Chief of Staff, thereafter requested the NPA to provide details of its contractual obligations with the logistic giant.
The NPA in a letter seen by PREMIUM TIMES, dated January 25, 2021, said the boat contract with Intels reached the end of its contractual period in August 2020 after the firm complied with the TSA directive.
It went further to explain that in preparation for the expiration of the contract, NPA initiated a public tender process for the contract. Consequently, Intels and other bidders submitted bids for the tender but the company (Intels) allegedly violated one of the criteria for the tender process and was disqualified.
The NPA said the tender process proceeded and the companies with the highest score were prequalified and the result of the tender process sent to the Ministry of Transport for onward transmission to the Federal Executive Council (FEC) for consideration.
However, the NPA said nothing was heard from the ministry about the tender process yet the nation continued to lose revenue due to the failure to complete the tender process.
The NPA also disclosed that having lost out of the tender process, Intels initiated a court action against the NPA citing one of the debts owed one of its sister companies.
The NPA argued that this was wrong as both contracts were not linked to one another. Aside from the boat contract, the NPA listed other contractual agreements it had with the logistics firm.
In addition to the explanation by the NPA, the president also requested the Attorney-General and the BPP to provide legal advice.
In its intervention, the BPP expressed worry over the need to avoid a situation where contractors obtain contracts from government through the courts, rather than through the procurement process. The BPP argued in support of positions canvassed by Ms Usman and the NPA.
“The correct procedure is that contracts should be won through a proper procurement process that complies with the provision of the PPA, 2007,” the bureau said.
“Furthermore, there is need to avoid the kind of monopoly enjoyed by Messrs Intels which has cascaded into the entitlement mentality being demonstrated by the firm.”
The BPP warned further that monopoly will result in higher prices and erosion of value for money, advising the president to inform the attorney-general to avoid litigation