BUA Group: NPA Decommissioning of Port Harcourt Terminal Threatens $400m Project

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Business

October 4,2019

The recent decommissioning of BUA Ports and Terminal, Port Harcourt, Rivers State by the Nigerian Port Authority (NPA) is threatening the take-off of $400 million project and negating the federal government’s policy of ease of doing business and efforts to attract investments to the country.

The General Manager, BUA Ports & Terminals Limited, Mr. Mohammed Lile Ibrahim, stated this, insisting that the action by the government agency was not only undermining concessioning agreements and internationally acceptable judicial/dispute resolution procedures, but also contradicts federal government’s claims of creating conducive environment for businesses to thrive.

Ibrahim said while BUA had been fulfilling its part of the lease obligations, NPA had failed to do same.

“While NPA’s action has affected some jobs and activities of our customers who use the jetty, what Nigerians should know and must not allow to happen is the loss of more jobs and the stoppage of $400 million sugar and pasta factories project.

“That project, which has already provided employment for over 1,000 works is meant to commissioned at the end of this month. But the shutdown of the port terminal is threatening the take-off of the project. “As I talk to you now, dock workers have not been earning income since the port was shut, government is losing revenue as the charges we ought to pay for cargos handled through the port have stopped and our customers who use the jetty to bring products are also affected and their businesses are suffering,” he said.

The GM lamented that the wheat meant for the commencement of the pasta factory was already in the sea and the truck to bring the material to the factory are already at the jetty but there is no place for the ships to berth and discharge the cargo due to NPA’s action.

Ibrahim, therefore called on the federal government to prevail on NPA to rethink its action and stop the losses being suffered by stakeholders using the port terminal.

BUA Group had accused the NPA of failing to meet with its obligations regarding the lease agreement and of disregarding the Federal High Court, Lagos Division injunction restraining NPA from terminating or giving effect to the Notice of Termination pending the referral of the issues in dispute to arbitration as provided under the lease Agreement. Also, BUA group questioned why the NPA will jettison the pending arbitral processes of the Court of Arbitration of International Chamber of Commerce in Paris and take laws into its hands by de taking physical possession of the Terminal.

“Under the agreement between the parties, NPA has an obligation, among others, to dredge the port and repair the quay apron of the Terminal which responsibility it has failed to perform till date. The Lease Agreement provides for mutual rights and obligations and makes provision for dispute resolution mechanism which explicitly states that dispute shall be resolved by arbitration.

“The question is why did NPA refuse to give approval to carry out necessary remedial repair works as requested in BUA’s letter of 16th May, 2019 and as confirmed by NPA letter of 17th June, 2019, as the substance of our letter?

“The simple answer is that NPA management is determined at all cost to terminate the Lease Agreement notwithstanding the terms of the agreement which provides that parties should continue with their respective obligations under the Agreement pending the resolution of the disputes, the order of injunction and the pendency of the arbitration proceedings between the parties,” the company said.

“To our surprise and utter bewilderment and in clear breach of the contractual provisions, NPA by a letter dated 11th November, 2016 terminated the Lease Agreement. BUA Ports and Terminals as a law abiding corporate citizen approached the Federal High Court, Lagos Division in Suit No. FHC/L/CS/633/17 between BUA Ports and Terminal Ltd v. NPA contesting the purported termination of the Lease and obtained an order of injunction restraining NPA from terminating or giving effect to the Notice of Termination pending the referral of the issues in dispute to arbitration as provided under the Agreement. The Order granting injunction is dated 18th January, 2018.

“By the terms of the agreement, the parties are enjoined to continue with the observance of the terms and performance of their respective obligations under the Agreement even while disputes are being resolved by either court or arbitration.

“As a result of the injunction and the terms of the contract, BUA Ports and Terminals continues to carry out its obligations under the contract pending the resolution of the dispute. It is important to state that subsequent to the order of injunction, BUA Ports and Terminals wrote several letters and made overtures to the management of NPA for an amicable resolution of the dispute.

“NPA did not respond to the request for amicable settlement or the overtures made as the management of NPA appears bent and determined to give effect to the Notice of Termination by several measures including but not limited to decommissioning the Terminal.

“Consistent with the terms of the agreement, BUA wrote a letter dated 16th May, 2019 to notify the NPA of the state of the jetty and the need for immediate remedial works.

“BUA Ports and terminals specifically in that letter requested the approval of NPA for it to carry out the necessary repairs and reconstruction to avert imminent collapse and danger to human lives.

“However, NPA instead of giving the requisite approval as requested in our letter and consistent with the terms of the Agreement, in its determination to give effect to the purported Notice of Termination took laws into its hand by directing the decommissioning of the jetty and immediate closure of the terminal.

“It should be stated that the repairs required was as a result of the nefarious activities of hoodlums and vandals who had over a period of time cut the pipes and steel beam of the berths thereby affecting their stability, among others. The activities of these hoodlums and vandals were at various times reported to the NPA who had the responsibility and obligation under the Agreement to provide security for the Ports. The NPA did nothing. Indeed BUA in its determined effort to tackle these issues caused some arrests to be made and some of the suspects prosecuted, but NPA as owners of the Ports showed little or no interest in the prosecution and the case was lost. Obviously, if the NPA had been alive to its responsibilities and provided the required security, the activities of the vandals would have been prevented.

“It is important to stress that the repair and reconstruction required for the part of the Jetty in question does not require a decommissioning or closure of the entire Terminal. The carrying out of the remedial works if approved by the management of NPA would have remedied the defects stated in our letter to NPA and averted any risk of loss of property and lives. It is apparent that NPA is using the said letter by BUA Ports and Terminals as a subterfuge for an effective termination and closure of the Terminal in violation of the order of the court restraining NPA from carrying into effect the purported Notice of Termination.

It is also germane to point out that under the Lease Agreement, NPA has an obligation, among others, to dredge the port and repair the quay walls and apron of the Terminal which responsibility it has failed to perform till date. The dredging of the port is a sine qua non condition for the effective reconstruction and rehabilitation of the jetty given the age of the port (over 100 years old).

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