By Ade Jacobs
The N3 trillion controversial contracts awarded by the Nigerian Customs Service (NCS) to a private firm Messrs E-Customs HC Project Limited has caught the attention of the Nigerian Senate which has now decided to summon the Comptroller General of Nigeria Customs Service, Col Hameed Ali (Rtd).
The Punch reported that the vice chairman of the Senate Committee on Customs and Excise, Francis Fadaunsi, said the customs boss has been invited to explain the modalities for the contract awarded to the foreign firm.
Two months ago, precisely on September 3, 2020, the minister of Finance, Zainab Ahmed, had stated after the weekly Federal Executive Council (FEC) meeting that the administration had approved the $3.1 billion concession of the service to a private firm, E. Customs HC Projects Nigeria Limited for a period of 20 years.
365Daily had earlier reported that the multi-billion naira revenue contract did not go down well with many stakeholders in the maritime industry, including lawyers, ex-customs officers, agents and freight forwarders who said the contract was not awarded with Nigeria’s interest at heart.
Those that kicked against the concession believe that what the NCS needs at this time is not privatisation, but rather, a holistic retraining of its officers and men; enhancement of welfare packages and other incentives that will enable them perform optimally as a core revenue generating agency of the federal government.
Apart from this, many stakeholders also insist that the 20-year window granted the concession firm to recoup its $3.1 billion investment is too long, considering the small funds it would be committing to the project, while others have also criticised the government for concealing details of the multi-billion contract.
For instance, a former Comptroller General of Customs, Haman Bello Ahmed and Emeka Akabogu, a maritime lawyer, have separately demanded to know why the contract details have been shrouded in secrecy, wondering whether the real motive for awarding the contracts was to generate more revenue for the government.
Ahmed said: “The agreement should be a public document; it is an agreement between the government and the contractors. It is the right of Nigerians to get the details of the contract. Are they bringing the equipment and the technology? If they are doing all these, then it means that the government has concessioned the revenue collection of import duty to a foreign company.”
Also speaking on the issue, Akabogu said “the project being contemplated will probably incorporate complete automation of data submission and verification processes for cargo clearance in a formal single window. I absolutely subscribe to it as it will resolve the current issues which bedevil import clearance efficiency, including extortion by Customs and under-declaration by importers. But it will not cost $3.1billion and does not need a 20-year concession.”
Apart from key industry players, the civil society groups in the country have also joined in condemning the contract.
The Socio-Economic Rights and Accountability Project, SERAP said such sensitive contracts should not be awarded to a foreigner.
According to Adetokunbo Mumuni, its executive director “If we could concession collection of duties to a foreign establishment, then the Nigerian government should concession the administration of Nigeria to another foreign body; that is what it means.
“To say you want to concession the collection of your duty, which is your statutory responsibility, to a foreign establishment is a manifestation of unseriousness. It should never be thought of in the current Nigerian enterprise, otherwise the Nigerian government could as well concession the administration of Nigeria to a foreign establishment or a foreign country.”
On his part, the executive chairman, Centre for Anti-Corruption and Open Leadership, “I feel highly embarrassed and it’s embarrassing to the image of Nigeria and to an average educated Nigerian because even the civil servants that are supposed to have been gainfully employed do not have enough job to do and we have enough technocrats that can deal with the collection of duties.
“I don’t believe there is any reason why such a task would be concessioned to a private firm on behalf of the government. If there is any technical expertise that is lacking, there should be capacity building for the customs personnel to be able to carry out their assignment effectively and efficiently.
“More embarrassing is that they are concessioning it to a foreign firm and that is not acceptable. In foreign countries, Nigerians are revered in terms of expertise and technical capacity to carry out any task in any field, so we have what it takes. I hope it’s not the belief that ‘anything foreign is better’ is what is at work here. That move is out of place.”
The Senate has now decided to beam a searchlight on the concession by inviting the Customs CG and the concessionaire to make presentation and submit all the documents relating to the contract, according to Senator Fadaunsi who insists that the concession could be an avenue for some entrenched interest to rob the country.
According to him, “Our committee will write the CG, NCS to demand for the documents with which the agreement was signed. He is expected to bring all the documents relating to the agreement. All of us in the committee did not support the concessioning idea.
“If the CG, NCS refuses to bring the documents, we will write to the Minister of Finance who is the chairman of the board, and a centre point of the deal to bring them. We want to see the agreement. We held a meeting on the issue during the week.
“As soon as we go through the documents and we find out that it is almost the same thing which other administrations had done in the past which is just to find jobs for the ‘boys’, or a special interest for some people to steal our money, we will kick against it.”
The senator stated that the NCS has the capacity to generate revenue for the federal government if the rank and file of the service were well motivated, noting that the contract has become very controversial after the same has been awarded to another firm, which is now threatening litigation.
He said “There is no amount of money we want to generate in the Customs that the personnel of the Nigerian Customs Service, if properly trained and monitored, cannot generate.”
“What is the essence of the seven per cent cost of collection? It is to collect maximum revenue. What the Comptroller General of the NCS should do is to recruit more personnel instead of looking for foreigners to come and spend a false N3.4bn, claiming that they will spend the amount on ICT.
“Meanwhile, the NCS had already awarded a contract of almost N384m early this year on the same scanner that the foreign firm said it would invest money on.”
THE CONTRACT DETAILS AND CONTROVERSY
According to the details of the contract, the concessionaire is expected to invest $3.1billion and generate $176bn within the 20-year contract period, estimated at about N3trillion per annum.
However, another firm, Messrs Adani Systems Limited/Webb Fontaine, had faulted the contract award to Messrs E-Customs HC Project Limited.
Adani’s management claimed that it had an existing agreement with the Federal Government to do the same project with nearly the same conditions and insisted that the E-Customs HC wanted to hijack the project.
The development drew the attention of the House of Representatives and it subsequently asked its Joint Committee on Finance and Customs to probe it.
The Joint Committee mandated the parties involved in the controversial contract to maintain status quo ante pending the outcome of the public hearing.
In carrying out their findings, the panels invited the Federal Ministry of Finance, Budget and National Planning, the Attorney General of the Federation and Minister of Justice, the NCS, the Infrastructure Concession and Regulatory Commission and the two contractors.
The panel in its report cited Section 42(1a) of the Procurement Act 2017, the Bureau for Public Procurement on April 11, 2017, which granted certificate of no objection to the CBN recommending Messrs Adani Mega Systems Limited/ Webb Fontaine for the award of the project contract.
It was also discovered by the committee that CBN-TC on the CISS on behalf of the Federal Government engaged and signed contract with Messrs Adani Systems Limited/Webb Fontaine on a Build Operate and Own agreement.
The document indicated that the proposed concession period would last for 20 years on pro- rata sharing of 1 per cent (CISS and NESS) on phase 1 of ($300m) investment.
The committee held that there was a contract agreement entered between the CBB-TC on CISS.
It also held that, although the new consortium presented a letter of engagement from the office of the Chief of Staff to the President and other documents showing the level of work they had done, it was unfortunate that there was no contract agreement with the Federal Government of Nigeria.
Investigations showed that Messrs Adani Systems Limited/ Webb Fontaine had instituted a court case challenging the cancellation of the agreement in December 2018 at the Federal High Court with suit No FHC/ ABJ/CS/2017, demanding $2.5bn as damages.
Based on the suit, the Solicitor General of the Federation wrote the Minister of Finance, urging her to consider the strength and weakness as well as litigation fees.
Meanwhile, the office of the Chief of Staff to the President had issued a letter engaging the consortium to carry out the same project awarded to Messrs Adani Systems Limited/Webb Fontaine seven months after they were engaged by CBN-CISS. The letter, titled, ‘Presidential Initiatives on Customs Modernisation of e-Customs Project,’ was dated September 17, 2019.
The Reps Joint Committee concluded that the Presidency was not duly informed of the existing contract agreement and litigation filed by Messrs Adani Systems Limited/ Webb Fontaine.
It also said there was no evidence before the committee that a contract was signed between the consortium and the Federal Government or CBN- CISS.
The Joint Committee in its recommendations therefore said Messrs Adani Systems Limited/ Webb Fontaine should be allowed to continue with the project so as to avoid unimaginable possible revenue loss to the country.
They also supported a Build-Operate-Transfer delivery method for the project and not Build, Operate and Own.
The report was signed by the chairmen of the House of Reps committees on Finance, Public Petitions and Customs as well as clerks of both committees on Finance and Customs.
Meanwhile, the NCS said it has not received any invitation from the Senate on the issue. Joseph Attah, a deputy controller of customs and spokesman for the service said he’s “not aware of any summons or invitation by the Senate or about what you just asked me.”