THE Special Adviser on Policy Coordination to the President, Hadiza Bala Usman, has accused the chairman of BUA Group, Alhaji Abdul Samad Rabiu of “persistently violating his contractual obligations” to Nigeria.
Usman, a one-time managing director of the Nigerian Ports Authority (NPA), spoke in response to Rabiu’s article titled, “Two years of President Tinubu: A business perspective.”
Rabiu had in the article made reference to how a concession agreement on the operation of Rivers port was terminated by Usman during her tenure as the NPA managing director in a renewed battle between her and the group between 2016 and 2021.
The chairman of the BUA Group, in the article, commended President Bola Ahmed Tinubu, whom he stated had improved the business environment for private enterprises, unlike in the past when there were “arbitrary shutdowns” of businesses.
He wrote: “We no longer worry about arbitrary shutdowns or politically motivated disruptions. Let me give a real example. We started a new business in Port Harcourt four or five years ago under BUA Foods, operating at the Rivers ports under a concession with the Nigerian Ports Authority. It was going very well. One day, we woke up to a letter stating that the concession had been revoked, the terminal shut down and the lease agreement terminated. There was no warning, no issue, no conflict.
“Later, we discovered that the managing director of the NPA at the time decided to close the business, simply because our operations were competing with those of her friend. She wanted to impress her friend. That was the only reason.”
But Usman, in her response, described Rabiu’s claim of waking up to a letter terminating the concession agreement as “a blatant lie.”
She stated, “It is not just that the BUA Group received numerous notifications and warnings about its negligence of contractual responsibilities; some of these warnings preceded my tenure as managing director.
“Although the article otherwise stated factual and commendable efforts of the President Bola Ahmed Tinubu administration to stabilise the business climate in Nigeria, his narration of the dispute between the Nigerian Ports Authority (NPA) and the BUA Group is, to say the least, shameful.”
While explaining the facts of the matter, Usman recalled that BUA Ports and Terminal Limited became concessionaires of Rivers Port Terminal B for a 20-year tenure through a concession agreement contract dated May 11, 2006, adding that the terminal was handed over to them for use with effect from August 10, 2006.
She stated that as part of the terms of agreement for the concession, BUA Ports and Terminal Limited was required to commence full reconstruction of Berths 5 to 8 within 90 days of the handover of the facility.
She added, “Ten years after taking possession of the terminal and operating it, BUA had not commenced the rehabilitation of the quays it was required to commence in 90 days.
“A notice of default was issued to the company on February 11, 2016, which was before my appointment as the managing director of the Nigerian Ports Authority.
“The letter, with the subject: ‘Non-compliance with the reconstruction of Berths 5-8 in line with your terminal development plan as contained in your lease agreement’ read in part: ‘We refer to the above subject matter and our earlier letters dated May 19, 2014 and February 3, 2016. We observed that you had deliberately/and or refused to commence improvement on the reconstruction of Berths 5-8 in line with the laid down procedure in the approved development plan as contained in appendix D of the executed agreement.”
According to the former NPA managing director, despite receiving the letter, dated February 11, 2016 from, the company refused to honour this fundamental and material term of the lease agreement, which compromised the integrity of the other adjoining berths in the ports.
She said that on August 17, 2016, the NPA under my leadership issued another notice of default drawing the attention of BUA to the failure to fulfill its obligations. Still, BUA did not commence the rehabilitation in line with the contractual obligation.
There was no immediate response from the BUA Group yesterday. However, when the issue first broke out in 2019, BUA had explained that the NPA had an obligation to dredge the port and repair the quay apron but had failed to do so. It added that the lease agreement between the parties provided for mutual rights and obligations and made provision for a dispute resolution mechanism, which explicitly stated that disputes shall be resolved by arbitration.
Explaining further, BUA said the termination of the lease agreement in 2016 prompted it to go to court and obtain an injunction against the termination.
The firm explained also that the repairs required at the terminal were as a result of the activities of hoodlums who over the years had cut the pipes and steel beam of the berth, thereby affecting their stability.