Our Case: Between NPA and BUA Ports and Terminal, Port Harcourt

Proshare

Wednesday, October 2, 2019   / 01:59PM  /  By BUA Group     / Header Image Credit: BUA/NPA

 

Our attention has again been drawn to the statements by the Managing Director of the Nigerian Ports Authority, Miss Hadiza Bala Usman on the issue of the decommissioning of the BUA Ports Terminals Port Harcourt.

 

We respond as follows:

 

It is gratifying to note that the MD of the NPA admitted issuing a Notice of Termination but interestingly omitted to acknowledge that NPA failed to abide with the provisions of the Lease Agreement especially the dispute resolution provisions. The  Agreement provides that certain steps must be taken where there is a dispute which cannot resolved amicably, then the matter should be referred to arbitration.

 

It is however interesting to note that the MD of NPA failed to state that NPA actually failed to carry out any of its own obligations under the Agreement to date, which obligations are necessary and required for a concomitant obligation by for any meaningful reconstruction.

 

For instance, the NPA has the specific obligation to dredge the ports, repair, renew, rebuild the quay walls and provide security for the terminals. It did not do any of these.

 

It was the failure of the NPA to provide the required security that led to the nefarious activities of hoodlums and vandals who over a period of time cut the pipes and steel beams of the berths thereby affecting their stability and consequently making remedial works imperative.

 

As a matter of fact, within three months of Ms. Bala Usman assuming office, she went to Port Harcourt and in her haste to stop BUA, the Hadiza Bala Usman led NPA immediately terminated the contract without any recourse to the provisions of the lease agreement, which does not grant her or the NPA such powers.

 

As a responsible corporate citizen, which appreciates the coercive powers of the NPA as an agency of Government, BUA approached the Federal High Court for the protection of its rights and investments. The court dutifully granted an injunction restraining the NPA from giving effect to the Notice of Termination and also ordered parties to proceed to arbitration in accordance with the terms of the Agreement.  In essence, NPA was enjoined to await the outcome of the arbitration proceedings.

 

The NPA and its MD, upon realizing their grave error, initiated arbitration proceedings as stipulated in the lease agreement - a move BUA welcomed and is actively participating in. (See Annexures 2 & 3 for NPA's request for arbitration, BUA's response and BUA's Counter Claims) However, while the arbitration process is still ongoing and in a move that has baffled everyone, the Hadiza Bala Usman led NPA has once again disregarded the entire judicial process and went ahead to decommission the terminal allegedly based on the contents of a letter we wrote to the NPA seeking to perform remedial works  on some parts of the terminal that were vandalised. We restate that 'decommissioning' is alien to the agreement and its terms. We also restate that these remedial works which do not necessitate the closure of the terminal stemmed from NPA's failure once again to live up to its obligations as regards the lease agreement on providing security to forestall vandalism.

 

Rather than wait for the outcome of the arbitration proceedings, which it had itself initiated, NPA again issued a letter decommissioning the terminals, which is tantamount to an effective termination of the Agreement, ostensibly relying on the said letter written by us requesting the approval of NPA (as required under the Agreement), to carry out the remedial works.

 


Proshare Nigeria Pvt. Ltd.

 

Contrary to the assertion of NPA that BUA Ports and Terminal wrote a letter to it complaining about the safety of the Terminal to lives and properties, it failed to state that such letter was in pursuant to Article 8.4 of the Lease Agreement which enjoins BUA Ports and Terminal Limited to report any environmental and safety emergencies to NPA. Sequel to this, the purport and essence of BUA's letter was to seek approval to effect remedial work as envisaged and clearly stated in the Agreement. The NPA has deliberately and mischievously ignored the essence of the request of BUA(i.e approval for remedial works) rather it celebrated the safety concerns that BUA raised - which is line with the BUA's obligation under the Lease Agreement to inform the NPA of any such issues before taking remedial action.  - Article 8.4 of the Lease Agreement) 

 

What the NPA also failed to inform the public on, was that it requested for guarantees and an indemnity before BUA could carry out any activities. BUA provided the required indemnity and the Terminal was reopened  and was in operation for just three (3) weeks before it magisterially verbally ordered the closure of the Terminal till date. The NPA has not till date responded to the request for approval nor approve the remedial works to be carried out rather, it demonstrated its determination to effectively to effectively terminate the Lease contrary to the terms of the Agreement and the order of the court restraining the NPA from giving effect to the notice of termination.

 

We once again state that everything BUA has done is in line with the Lease Agreement and it is imperative to note that the Agreement envisaged cases of emergencies.

 

It is gratifying to note that NPA claims emphasis on the rule of law but it consistently flouted almost every provisions of the contract including but not limited to dredging, respect for court orders and arbitral process. It is on record that NPA has not complied with any of its obligations under the Lease Agreement.

 

NPA has now resorted to undermine the arbitration process it initiated. Let the due process take its course

 

We restate that there is no provision under the Agreement enabling NPA to decommission the terminals neither is there anything in our letter to the NPA that to suggest that the remedial works required to be carried out on the berths affected  requires a closure of the entire Terminal.

 

Our stance is that the NPA under the current management should desist from misleading the general public with inaccurate statements and deliberate misinformation.

 

We state that disputes are not resolved on pages of newspaper, twitter accounts or other social media.

 

We believe that if the NPA has confidence in the merits of its case, it should as a law abiding Agency of Government and creation of statute, it should diligently prosecute its claims in the arbitration.  

 

In conclusion, BUA wonders why anyone would think it is uninterested in developing the BUA Ports & Terminals or not interested in the safety of lives and property when it has invested hundreds of millions of dollars in putting up flour mills, pasta plant and a new sugar refinery in the last 3 years which have just been completed and are to be commissioned this month. As a matter of fact, the decommissioning came only a week after we advertised the recruitment of over 1000 persons to work at these plants to be commissioned this October. We believe if the matter is still in arbitration and there is nothing illegal being done by BUA, it is important that BUA and NPA come together to address the issue of repairing the jetty so that the over 1000 people already employed start their jobs.

 

BUA remains fully committed to fulfilling its obligations towards the concession agreement and will continue to do so. We therefore enjoin the Hadiza Bala Usman led NPA to stick to the terms of the concession agreement and allow the judicial process of arbitration they initiated take its course whilst both parties work together in the interim to complete the remedial works at the terminal.

 

Download Links

1.      Operations At Nigerian Sea Ports & Terminals: Ports Users Survey Report - Proshare

2.     Operations At Nigerian Sea Ports & Terminals: Ports Users Survey Report - CBi

 

Proshare Nigeria Pvt. Ltd.


Related News - Maritime

  1. International Maritime Organization 2020 Deadline Fast Approaching
  2. Nigeria Maritime Industry
  3. Mauritius - Eyeing A Place on Maritime Silk Road
  4. Japaul Oil and Maritime Services Plc Appoints Mr. Akinloye Daniel Oladapo as Ag. Managing Director
  5. Average Water Transport Fare Increased By 0.57% MoM in May 2018 - NBS
  6. 4,175 Ocean Going Vessels Recorded at Nigerian Ports in 2017
  7. Lagos to Strengthen Infrastructure On Waterways, to ease Transportation
  8. Average Fare Paid by Passengers for Water Transport Increased by 6.05% MoM to N631.55 in Dec 2017
  9. Kenya's First Commercial Cargo Train Begins Operations

 


Proshare Nigeria Pvt. Ltd.

 

Related News

1.          CCNN, BUA Cement wins EMEA Finance Award - Jun 25 2019

2.         BUA and Wartsila Oy of Finland Sign 48MW Power Project for Sokoto Line 3 - Mar 22, 2019

3.         BUA, CBMI Sign Agreement to Build New 3million Kalambaina Cement II Plant in Sokoto - Jan 06, 2019

4.         Shareholders Overwhelmingly Approve BUA's Kalambaina Cement and CCNN Merger - Nov 30, 2018

5.         Economic and Institutional Restructuring for the Next Nigeria - Soludo

6.         CBi and MACN to hold Round-Table Session On "Service Delivery At The Nigerian Ports"

7.         FX Food Restrictions: CBI Calls on CBN To Explore Broad Stakeholder Engagement

8.         FX Restriction On Food Import May Raise Inflation Rate In Q4 2019

9.         FX Unification in Nigeria: Simple Thoughts, Tougher Mission

10.      Average Fare Paid For Intercity Journey Increases By 0.35% MoM To N1,624.76 In August 2019

11.       Transportation: Lagos Government To Address 60 Key Traffic Areas

12.      Average Fare Paid By Commuters For Intercity Journey Increased By 0.76% MoM in July 2019

13.      Average Fare Paid For Bus Journey Inter City Increased By 0.17% MoM to N1,606.92 in June 2019 - NBS

14.      Average Fare Paid For Bus Journey Within City Decreased By -2.74% MoM to N176.28 in May 2019 - NBS

15.      723,995 Passengers Travelled Via Rail in Q1 2019 - NBS

16.      Average Fare For Bus Journey Intercity Increased By 0.77% MoM to N1604.36 in April 2019 - NBS

17.       Average Fare Paid By Commuters Intercity Increased By 2.85% MoM to N1,592.07 in March 2019 - NBS

18.      Domestic Passenger Traffic Grew By 23.19% YoY in 2018 - NBS

19.      Grounded 737 MAX Won't Negatively Affect Airport Credits - Fitch

20.     Average Fare Paid By Commuters Within City Increased By 1.43% MoM to N177.57 in February 2019 - NBS

 

Proshare Nigeria Pvt. Ltd.

 

 

READ MORE:
Related News
SCROLL TO TOP