8 January 2013

Nigeria: Disquiet Over N20 Billion Ports Inspection Contract

Reps probe deal with Cotecna, others

Key players in the shipping industry are raising concerns over the recent renewal of destination inspection contracts to three companies that have been handling the job since January 2006, Daily Trust learnt in Abuja.

The Federal Government on December 31 renewed the contracts to Cotecna, SGS and GlobalScan for six months, which will fetch the companies a total of N19.8 billion during the period.

Stakeholders in the industry say the companies, which are backed by powerful Nigerians, have not delivered on the initial contracts and so there was no reason for the extension.

Under the renewed deal, Cotecna will receive $10 million monthly, SGS $7 million and GlobalScan $4 million.

The companies are supposed to provide destination inspection services and also train Customs staff who should take over the job by the end of last year.

But sources said the three firms have breached the contract provisions by failing to install the required equipment and employing enough Nigerians.

"The companies have failed to provide and install heavy duty scanners at the ports to facilitate the identification of lethal contraband into the country," a source said.

A contract document between the Federal Government and GlobalScan, signed on November 15, 2006 by its chairman Emeka Offor and then-Finance Minister Ngozi Okonjo-Iweala, show that the company is required to train 350 Customs officers and 50 officers of other relevant agencies.

Another concern of stakeholders is that the Customs personnel who have been trained by the three companies are now prepared to take over the job and so renewal of the contract to the firms is a waste of public funds.

"The Comptroller General of Customs actually reported to the Ministry of Finance that the companies have trained his staff on how to handle the equipment they installed for them and the Customs officials are competent to handle the equipment," a source said.

"But the companies bypassed the customs and came to the ministry to ask for the extension of the tenure of their contract. No reference was even made to the service before the tenure extension.

"Normally the customs service should be the one to have applied to the ministry to seek for the extension of the contract period. But because the customs were ready to take over from the companies who have no reason to ask for extension, the companies contacted the ministry directly and got the extension."

Another source also said the companies never paid any tax on their earnings to the Federal Government.

"They are also not responsible for any loss Nigeria suffers unlike the practice in other countries where such port service providers also operate," the source added.

"There are also national security concern issues as such companies are in control of sensitive import and export information."

Cotecna reacts

But the management of Cotecna Destination Inspection Limited (CDIL) denied the allegations, saying the company paid taxes and has employed over 400 Nigerian skilled workers.

Speaking with Daily Trust in Lagos, spokesman for Cotecna, Aminu Mohammed, said the company also trained 1,633 workers solely and jointly trained 1,356 Customs service officers.

On tax remittance, he said: "It is not true that we have not been paying our taxes to government. The company does not collect money directly but only issues risk assessment reports upon which payments are made to customs."

He said there is no agreement in the contract on the number of Nigerians that should be employed.

Mohammed said CDIL has installed scanners in Apapa and Tincan seaports in Lagos, at Kano and Abuja airports, as well as at land borders of Jibiya in Katsina State and Banki in Borno State.

He said the scanners include 4 mobile 3.8 mev x-ray scanners, 2 hi-scan tunnel scanners, and constructed two 9 mev dual view x-ray fixed scanners. He said the scanners are jointly being operated with the Customs.

"There is nothing that we have not delivered based on the agreement we had with the Federal Government seven years ago," he added.

A Daily Trust reporter who visited the APM Apapa terminal last week saw the installed 3.8 mev x-ray scanners and 2 hi-scan tunnel scanners. Officials told the reporter that the scanners had in the past discovered concealed contraband.

An official of SGS told Daily Trust in Lagos that their operations cover Port Harcourt main port, Onne port, Idi-Iroko boarder and Ilorin airport. He said all the ports have installed heavy scanners except Ilorin airport, saying the delay there was because of on-going construction of warehouse for the scanners by the state government.

He also said there was no agreement as to the number of Nigerians to be employed by the company and that the Customs receives revenue for the services provided on behalf of the Federal Government.

Daily Trust could not get to speak with GlobalScan, whose corporate offices are at 22 Lobito Crescent in Abuja, in the same premises with Emeka Offor's Chrome Energy.

When our reporter visited the offices of GlobalScan yesterday, a documentation officer denied him entrance and said he should leave his number for the company's spokesman to call. Nobody called up to the time of going to press last night.

An email sent to a general manager of the company Hassan Adeogun was also not replied to.

Reps open probe

Meanwhile, the House of Representatives Committee on Customs said it has been investigating the substantive destination inspection contracts when the renewal was announced.

Vice chairman of the committee Kingsley Ogundu Chinda told Daily Trust: "We were talking with them and their contracts were supposed to expire by December but while we were on Christmas break we heard in the news that it has been extended for another six months.

"We have already invited them before the House vacated.... That was on, we have not concluded before the announcement of extension of six months. So when we resume, we are going to look at all that and the House's decision will be in the best interest of the country."

He added: "What we said is that look, you have a contract that will run up to December, how well have you performed that contract? Is there any aspect of it that has not been performed? Or is there anything that we as a government have not done? How prepared is the Nigerian Customs Service because part of your contract is that you will train the Customs to take over by December.

"Then we will ask the Customs, come how prepared are you to take over from them? These are the things that we are investigating before we heard of the renewal. So by the time we go back, members will now sit down to look at the issue of the renewal for six months."

Asked if the lawmakers will seek cancellation of the contracts, Chinda said, "I believe that contracts are not cast on stones. We will take our time to do what we ought to do thoroughly and at the end of the day whatever decision we will come up with it will be in the interest of the country."

No official of the Customs was willing to talk to Daily Trust on the controversy over the destination inspection contracts.

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