The Nigerian Ports Authority (NPA) has revealed that the nation is set to save an impressive $326.8 million, approximately N227.86 billion, following an agreement with INTELS Nigeria Limited on the contentious pilotage contract.
In total, the NPA stated that the federal government would benefit by over $500 million, considering the interest waiver of $193,317,556 and a reduction in the interest rate on the outstanding debt. The interest rate is adjusted from six-month London Interbank Offer Rate (LIBOR) + 6.5% to six months Secured Overnight Financing Rate (SOFR) + 3%.
The benefits also include the extension of the debt repayment period to 15 years, with the initial two years being interest-free, along with a reduction in commission from 28% to 24.5%.
Acknowledging the Minister of Marine and Blue Economy, Adegboyega Oyetola, for his efforts in resolving the INTELS issue, NPA emphasized the government’s gain from the agreement.
In a statement titled “Setting the Record Straight in Respect of Service Boat Monitoring Operation in Nigerian Ports Authority: Reinstatement of INTELS Nigeria Limited as Management Agent,” NPA addressed misinterpretations in certain media reports.
Breaking down the agreement, NPA highlighted a waiver of $100 million on the accrued interest as of July 31, 2023, on the indebtedness to Deep Offshore Services Limited under the Phase 4B agreement. Additionally, there’s a waiver of interest accruing on the outstanding debt for the two years starting July 1, 2023, amounting to an estimated $93,317,556.
The interest rate on the debt to Deep Offshore Services Limited was also reduced from six-month LIBOR rate + 6.5% to 6-months SOFR rate + 3% from the date of executing the supplemental agreement.
NPA emphasized that the total savings amount to $326,895,226 over the next 15 years due to the waiver and interest rate reduction.
The statement clarified, “The interest of the authority is to ensure that services are provided in line with international best practices and to enhance the revenue profile of the federal government.” To address the legal impasse, the NPA proposed a settlement initiative with INTELS, submitted to the federal government through the Ministry of Transportation.