How controversy dimmed $3.1b e-customs project

The manipulations that led to the dramatic approval of the $3.1 billion Customs modernisation project to another party completely different from the one approved by the Federal Executive Council (FEC) remains a mystery for the operators to phantom.

With the recourse to litigation by the parties involved in the project, it is now coming to light that President Muhammadu Buhari may have been misled to override an approval granted by the Federal Executive Council, (FEC) he presided over in September 2020.

The FEC had on Wednesday, September 2, 2020, ratified the modernization project with specific directives to implement full automation of all the Nigeria Custom’s business processes and procedures through the development and implementation of a robust and secure ICT platform. This entails complete systems integration with the current ICT platform; development and implementation of modern customs border stations, airports and marine posts.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, who presented the memo approving the E-Customs project, explained that the concession was awarded in favour of Messrs E. Customs HC Projects Nigeria Limited for a concessionary period of 20 years. It was projected that government will earn about $176 billion during the period.

“So, council today ratified Mr. President’s approval for the PPP concession for a 20-year period to Messrs E. Customs HC Project Limited as a concessionaire for the delivery of customs modernization project. This is a project that will not have an immediate cost to the government, the investors are providing all of the financing and this revenue will be deployed in three phases and they will look over the investment in the concessionary period of 20 years.

“The key point is that it is not costing the Federal Government one thing, the $3.1 billion being proposed will be sourced by the sponsors and the partners” the Minister clarified.

This lofty vision is now threatened by a sinister plot to scheme out the approved concessionaire, Messrs E. Customs HC Project Limited and replace it will an entity registered at the Corporate Affairs Commission on April 5, 2022, just two months ago which has Umar –Ajijola Jummai Zainab as one of directors and shareholders.

Stakeholders have continued to worry on how the NCS and the Infrastructure Concession Regulatory Commission (ICRC) were able to convince President Buhari to approve a seeming illegality by replacing one company with another outside any known law in Nigeria.

The sore points were captured in a letter dated 25 April, 2022, by the Managing Director of Bionica Technologies, Alhaji Umar Tanko-Kuta to the ICRC, a copy which was obtained by The Guardian : “Following the emergence of a document which is neither a product of negotiation of the parties during their approved negotiation nor a document that was officially approved by the FEC, a meeting was scheduled at the instance of the Acting Director General of the ICRC, JAM Ohiani inviting the stakeholders to discuss the E-Customs Project.

“We observed that the key stakeholders of the E-Customs Project which is a Presidential Initiative on Customs Modernization were not present at the meeting supposedly of stakeholders. Our enquiry at the meeting revealed that the Federal Ministry of Finance, Budget and National Planning, the custodian of the approved Concession Agreement as well as E-Customs HC Ltd, the approved Concessionaire of this project were not invited. The issued directives of the Acting Director General of the ICRC was not intended to authenticate the legal copy of the Concession Agreement that was approved in September 2020 by FEC. Rather, the directives were geared towards validating the tampered document.

“Furthermore, we are concerned that meetings that appear clandestine in nature and styled “retreats” which took place on weekends in a hotel are being presented as validly constituted negotiations of parties. The Concessionaire’s legal team, upon objecting to the voidable nature of the exercise, were intimidated, bullied and harassed.

“Despite the issues raised as regards the conduct of Dr. Jobson Ewalefoh of ICRC in our letter dated 12th April, 2022, he was given the platform to make a presentation about the E-Customs Project which indicates that the ICRC has abandoned their statutory mandate as independent regulator and have assumed the contrived role of transaction adviser to the parties.

“As we stated in our letter to Nigeria Customs Service dated 31st March, 2022, the only lawful draft Concession Agreement is the one that was negotiated between the Federal Government team [led by the Assistant Comptroller General of Customs B. Aber and Late Mr Tampi Kupsar Wudapba, together with Government’s transaction advisory team (legal, technical and financial advisers) and officials of the Nigerian Customs Service], the Huawei consortium [led by Mr. Umar Tanko-Kuta of Bionica Technologies WA Ltd together with the Consortium’s legal, financial and technical advisers] and the lenders AFC and First Bank) between October 2018 and May 2019.

“The product of the approved negotiations was the Draft Concession Agreement that was submitted to the Federal Ministry of Finance, Budget and National Planning and vetted by the Federal Ministry of Justice in December, 2019 and approved by FEC in September, 2020. Any other version that we are requested to comment on is ultra vires as it does not represent the negotiated terms and conditions of the parties as approved by FEC.”

Copies of the letter were also sent to the Secretary to the Government of the Federation and the Minister for Finance, Budget and National Planning.

Rather than address issues raised above, the ICRC two days later despatched an “Update on the e-custom project” in what now appears to be a distortion of fact detailing series of meetings held to ratify an agreement and the fact that “the AGF reviewed and finalised the concession agreements as directed by the FEC and conveyed his approval to execute it to the NCS on the 14 of February, 2022.”

The ICRC recommended that: “the implementation of the project should proceed without delay and that members of the consortium except Bionica Technologies should be directed to form a Special Purpose Vehicle for the implementation of the project and to execute the finalised concession agreement as approved by the AGF.”

The update was sent to the SGF, the Minister of Finance, the AGF and the Comptroller General of Customs. Indeed, Bionica Technologies, the lead developer of the project raised several red flags, warning of the surreptitious steps taken by NCS and ICRC to undermine the earlier agreement sanctioned by FEC.

On April 25, 2022, the company wrote the AGF, referring to several correspondences detailing the role played by the chief law office of the country to carry out the instructions of the President and the FEC. The letter reads, inter alia:

“We were highly surprised, bewildered and in a state of dilemma when we learnt that the draft Concession Agreement, negotiated and approved by the HAGF (subject to observation/comments contained in your Letter, which observations were duly incorporated in the revised draft Agreement) and forwarded to the HMF in December 2019 was re-opened by NCS, a parastatal under the FMOF and sent back to your office for review.

“We find it strange, unconventional and against Civil Service ethics and due process that a draft Agreement already vetted and approved by the FGN’s highest law officer (HAGF), forwarded to the HMF, (the author of the letter requesting HAGF’s vetting and approval of the draft Agreement) was sent back to your office for a second review and second approval for reasons best known to the authority asking for review.

“At this juncture, it is pertinent to ask whether it is acceptable and lawful for NCS – a parastatal under the FMOF to just wake up one day and decide that it was not in agreement with the review carried out by the Chief Law officer to the Federal Government and therefore the reviewed Agreement should be sent back to the approving officer to de-approve, carry out a second review and re-approve what he had earlier approved. Was NCS acting on the directive of the HMF?

“It is worthy of note that as at this moment, the HMF is the custodian of the original approval conveyed to her by HAGF in December 2019 whilst NCS is having another approval of February 2022. There were no directives from the approving authorities that the original draft Concession Agreement for execution made pursuant to HAGF’s approval should be re-negotiated or substituted.

“The NCS substituted the earlier concession agreement as approved in December 2019 which featured material amendments and changes to certain boiler plate clauses which were agreed during the negotiation in 2019. The ICRC which is a regulatory agency seems to have assumed the role of the transaction advisers by actions at the meetings where we consistently made it clear that this draft Concession Agreement had already passed through due process and could not be subjected to another review.”

In another letter to the SGF on May 24, 2022, sighted by The Guardian, Bionica Technologies alleged that, “the ICRC connived with others to undermine FEC’s authority by attempting to substitute the negotiated terms and conditions approved by FEC with a corrupted version of the Concession Agreement which was neither negotiated by the parties nor approved by FEC. At every meeting of the project since FEC approval was obtained where ICRC was represented by Mr. Jobson Ewalefoh, he claimed that FEC approval to this project is subject to approval by the ICRC.”