There has been a truce between the Nigerian Airspace Management Agency (NAMA) and Shoreline Oil Services Ltd which operates the Osubi Airstrip in Warri, Delta State as the agency has restored air traffic services to the facility.
The withdrawal of air traffic services was occasioned by debt controversy in which NAMA claimed N17.7 million monthly service charge from Shoreline while the company insisted that it inherited N2.975 million monthly fee from the agreement the former concessionaire of the airstrip, Shell Petroleum Development Company (SPDC), had with NAMA.
The Contentious deal
The contract variation agreement between NAMA and SPDC obtained by NewsGazette showed that back in 2009 when both parties signed an agreement there was an upward variation of monthly lump sum from N2, 976, 583.00 to N18, 453, 577.00.
As of July 1, 2009, total backlog due was N372, 923, 773.76.
In the ‘Effective time of the variation’ of monthly fee agreement between NAMA and SPDC, it was stated: “Effective July 1, 2009, this variation will pay a lump sum backlog covering the difference between the old and the new rates (N18, 453, 577.00-N2, 976, 583.18) from July 1, 2009 to December 31, 2010 (N280, 205, 888.76) and the new rate of N18, 543, 577.00 from January 2011 to May 31, 2011 (N92, 717, 885.00) while the new monthly rate will continue going forward from June 1, 2011 to June 30, 2013.”
Shoreline had argued that it was unaware of any upward review of the contract sum as the former concessionaire did not disclose same when it (Shoreline) bought into the management of the airstrip.
It also said that SPDC officials “orally confirmed that SPDC had never acceded to NAMA’s increase in its monthly service in the sum of N17, 660, 000.”
A letter dated April 26, 2016 and signed by a Mr. Kola Karim for Shoreline and addressed to the finance director, (Nigeria and Gabon), Shell Exploration and Production Africa Ltd, Lagos reads: “Further to our letter dated April 22, 2016 and our investigation regarding NAMA claims of existing contract between itself and Shell Petroleum Development Company upon which they asserted that there was an agreement to pay a monthly service fee of N17, 660, 000 under an air traffic management services agreement (ATMSA).
“NAMA has produced evidence of SPDC’s payments of the said sum. However, when the SPDC decided to close out/divest its interest in Osubi Airstrip and at the time of our acquisition in 2015, the only information SPDC made available to us was a contract (Contract No. NG010002424) which expired on June 30, 2012 for the sum of N2, 976, 583 as monthly fee to NAMA.
“Furthermore, your officials orally confirmed that SPDC had never acceded to NAMA’s increase in its monthly service in the sum of N17, 660, 000.
“Therefore as there exists a contract of performance by SPDC with NAMA, SPDC has the responsibility to bear the cost of the difference between the N2, 976, 583 which was disclosed in the contract made available to us at the completion of the sale of transaction and the non-disclosure of payment of N17, 660, 000 as monthly fee to NAMA.
“To preclude further disruption to our business, SPDC should take immediate steps to pay the difference due to NAMA on the monthly service charge which is the sum of N176, 201, 554 as at April 30, 2016.”
No ‘armistice’ yet
NAMA, in a statement signed by its spokesman, Mr. Khalid Emele, said Shoreline had paid N31 million “being part payment of accumulated charges for the provision of air traffic services at the airstrip by NAMA.”
He stated that the “payment leaves Shoreline Oil Services with a debt balance of N566, 422, 000.50 as of October 28, 2018.”
The part-payment was made after NAMA had taken the “difficult decision to withdraw air traffic services to Osubi airstrip after Shoreline Oil Services persistently refused to honour financial obligation to us despite several entreaties.”
Emele expressed the hope that the airstrip concessionaire “will take full advantage of this window of opportunity to make additional payment that will substantially defray the above N566, 422, 000.50 debt as well as agree on a concrete and workable payment plan that will clear the outstanding balance.”