Cargo Tracking Contract: How delayed execution cost Nigeria $500m annually — Shippers’ Council

The Shippers’ Council of Nigeria has raised the alarm over the cost of the delay in implementing the International Cargo Tracking Note (ICTN) contract.

Pius Akutah, the Executive Secretary of the Shippers’ Council, disclosed this on Monday at a hearing on the ICTN, a cargo tracking technology.

The hearing, organised by the House of Representatives Committee on Shipping Services, Customs, Ports and Harbour, and Maritime Safety, Education, and Administration, is investigating the non-implementation of the contract.

Mr Akutah revealed that Nigeria has lost about $2.5 billion over five years, approximately $500 million annually, due to the non-implementation of the contract.

“Nigeria has lost almost $2.5 billion within the last five years due to the lack of implementation. Because of some investigations led by the EFCC, five years have passed without progress,” he said.

“Implementation began for two years and then somehow stopped. We are losing that amount annually.”

Background

In July, the federal government announced the award of a contract to procure advanced solution technology for the Nigerian oil and gas sector.

The Minister of State for Petroleum, Heineken Lokpobiri, announced the deal at a press briefing, saying it would enable the country to track every cargo of crude oil loaded in Nigeria to its destination.

PREMIUM TIMES later exclusively reported that the contract breached an existing contract awarded by the previous government.

In March 2023, the administration of former President Muhammadu Buhari engaged Antaser Nigeria Limited to implement a cargo tracking system for 15 years.

The Nigerian Shippers’ Council (NSC) signed the agreement with Antaser Limited and four other companies on a “No Cure, No Pay Basis” with a revenue-sharing ratio of 60:40, accruing to the Federal Government of Nigeria and the consortium, respectively.

The contract with Antaser Nigeria Limited aimed to correlate actual flow with declared quantities and address discrepancies by introducing electromagnetic flow metres with remote data acquisition.

‘NUPRC, Customs’ attempt to hijack project at higher cost’

In its presentation, Antaser’s chairman, Emeka Obionozie,, informed the committee of how his company received approval to implement the project. He said Federal Executive Council also gave approval for the project.

He said that under the current administration, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Customs Service (NCS) are moving to implement similar technology in the oil and gas sector at a higher cost.

“We informed the Shippers Council of the attempt by the Nigerian Upstream Petroleum Regulatory Commission and Nigerian Customs Service (NSC) to implement part of the ICTN scope at a high cost to the nation. These efforts, and the complications arising from them, are due to delays in implementing the ICTN scheme,” he said.

“The rushed move, if allowed, would lead to duplication, mediocrity, unnecessary costs, and, more importantly, compromise the transparency that is the central pillar of the service scheme.”

Mr Obionozie said that the company’s contract with the government remains valid, adding that the company “maintains over ninety-five per cent (95 per cent) global network outreach for trade monitoring and cargo inspections.”

Minister’s absence almost halted probe

The absence of the Minister of Marine and Blue Economy, Gboyega Oyetola, nearly halted the committee’s probe.

The probe was scheduled to commence at 10 a.m.; however, by 11 a.m., the minister had yet to arrive. The lawmakers then resolved to take a one-hour recess to allow him to attend.

During this time, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, arrived at the hearing. PREMIUM TIMES learnt that lawmakers asked him to leave, insisting they would only proceed with Mr Oyetola.

After the recess, Babatunde Sule, a director at the ministry, appeared before the committee to stand in for Mr Oyetola.

Mr Sule informed the lawmakers that the former Osun State governor was out of the country, explaining his absence.

The Chairman of the Committee on Shipping Services, Abdussamad Dasuki, later allowed Mr Sule to stand in for the minister.

Speaking on the contract, Mr Sule stated that the initial contract was awarded in error, adding that Mr Oyetola made “frantic efforts” to revive it but was unsuccessful.

“When the minister assumed office, he made significant efforts to revive this contract. We held multiple stakeholders’ meetings, and even invited the lead partner for discussions. Yet, all issues have not been fully resolved. Time constraints prevent me from detailing all the Honourable Minister has done to actualise this contract,” he said.

When questioned by lawmakers, Mr Sule admitted he was unaware of certain details, requesting that lawmakers allow the minister to brief them.

“At this level, there are matters he might handle that may not be within my knowledge. I therefore request the indulgence of this committee to await the minister’s account of what he has done so far on the ICTN issue. It is a very critical matter. This is what I can share on the ICTN project,” Mr Sule said.

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His comments prompted jeers from lawmakers, with many questioning Mr Sule’s capability to represent the ministry on such a subject.

In his final resolution, Mr Dasuki said the committee would hold further hearings with all relevant parties to clarify the main issues.

The committee adjourned after hearing contributions from several participants at the session.