CustomsGate: $3 billion project mired in controversy

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Despite a restraining court order and informed legal advice, the Federal Executive Council, FEC, confirmed the re-award of concession on the Nigeria Customs Service Modernisation Project on Wednesday. The E-Customs project is valued at $3.1 billion.

Clem Agba, speaking after the FEC meeting presided over by Vice President Yemi Osinbajo, Minister of State for State, Finance, Budget, and National Planning, said the council approved a memo naming Messrs Bergman Security Consultant and Supplies Limited as the project sponsor, Africa Finance Corporation as the lead financier, and Huawei Technologies as the lead technical service provider.

The Minister stated that he was unaware of a pending court order on the matter, despite the fact that two Senior Advocates of Nigeria had written to the Ministers of Justice and Finance urging them to comply with a court order in a suit FHC/ABJ/CS/848/2022 filed by the original concessionaire, Messrs E-Customs HC Project.

Senior lawyers Ahmed Raji and Dipo Okpeseyi warned the AGF, the Minister of Finance, Budget and National Planning, and the Secretary to the Government of the Federation in separate letters last week of “underhand efforts being made to obtain the Federal Executive Council’s approval and or ratification of the re-award of the E-Customs Modernisation Project.”

In a follow-up letter to the Vice President, Prof Yemi Osinbajo, Ahmed Raji and Co. drew attention to the pending suit on the subject at the Federal High Court in Abuja, and claimed that the Ministry of Finance has perfected plans to present a memo for the Council’s ratification of a new concessionaire in flagrant disregard for the rule of law.

The lawyers specifically requested that the Federal Executive Council suspend, discontinue, or discountenance any request to initiate deliberations or a fresh request for approval for the award of the said contract to any other bidder in addition to the original approval granted by the FEC to Messrs E-Customs Project Limited.

“Despite all of this, the Nigeria Customs Service is pushing for another approval from the FEC with the sole purpose of embarrassing, overstepping, and undermining the earlier approval and ratification by the FEC and prejudice the matter pending in court,” Mr Okpeseyi wrote in a letter to the Secretary to the Government of the Federation dated April 11, 2023. The AGF, the Minister of Finance, and the CG, NCS were all copied on the letter.

Alhaji Umar Tanko-Kuta, the representative of the plaintiffs in the complaint, testified in court that the FEC authorized the selection of Messrs E-Customs HC Project Ltd as the concessionaire for the project on a 20-year concession agreement on September 2, 2020.

He also claimed that a disagreement emerged when the CG of the Nigeria Customs Service “sought to impose a shareholding and governance structure on the concessionaire in a manner inconsistent with the negotiated terms and the full business case approved by the Infrastructure Concession Regulatory Commission.”

In June 2022, the Federal High Court in Abuja restrained the Federal Government from enforcing or carrying out the agreement on the Customs Modernisation Project, also known as E-Customs, allegedly executed by its agents on May 30, 2022, which replaced the rightful concessionaire with another company- Trade Modernization Project Limited- registered at the Corporate Affairs Commission on 6 April, 2022.

On February 20, 2023, Justice Inyang Ekwo requested that all parties preserve the res of the matter and refrain from interfering with the proceedings.

The Nigeria Customs Service, Trade Modernization Project Limited, Huawei Technologies Company Nigeria Limited, and Africa Finance Corporation are the claimed agents who carried out the disputed concession arrangement.

The court also issued an interim injunction prohibiting the Federal Government or its agents acting through the Federal Executive Council from retroactively ratifying the decision to award the Customs Modernization Project, also known as the e-customs project, to Trade Modernization Project Limited, Huawei Technologies Company Limited, and Africa Finance Corporation.

The court further stated that the order will be in effect until the hearing and resolution of the complaint brought by two aggrieved corporations against the Federal Government and other parties.

The lawsuit was deferred on Wednesday to June 8, 2023, for a definite hearing.

Remember that the plaintiffs, E-customs HC Project Limited and Bionica Technologies (West Africa) Limited, jointly challenged the alleged unlawful and fraudulent replacement of their names in the concession agreement, which was previously approved by President Muhammadu Buhari and ratified by the FEC on September 2, 2020.

Anone Usman of Ahmed Raji Chambers, counsel to the two aggrieved corporations, presented an ex-parte application to the Federal High Court for interim injunction against the defendants to preserve his clients’ interests.

While ruling on the ex-parte motion, Justice Ekwo approved the plaintiffs’ petitions, citing adequate proof of interest in the concession project.

The Federal Government of Nigeria, the Attorney-General of the Federation, the Minister of Finance, Budget, and National Planning, the Infrastructure Regulatory Concession Commission, the Nigeria Customs Service, Trade Modernization Project Limited, Huawei Technologies Limited, Africa Finance Corporation, and Bergman Security Consultant and Supplies Limited are the defendants in the suit, from the first to the ninth defendants.

In their statement of claim, the two plaintiffs described how they planned to carry out a customs modernization project with the help of various government officials for the benefit of the Nigeria Customs Service.

They stated that President Muhammadu Buhari granted anticipated approval for the e-custom Project after a series of meetings and negotiations with some of the defendants.

They claimed that on September 2, 2020, the Minister of Finance presented a memo number EC2020/153 to the Federal Executive Council, FEC, the Federal Government’s top decision-making body, and obtained approval for the two plaintiffs to be given the concession.

Plaintiffs also claimed that the problem began when the Nigeria Customs Service unilaterally reassessed the FEC approval and imposed additional restrictions, including a shareholding formula and governance structure.

They said that the NCS’s authority to unilaterally review FEC authorisation had been challenged, and that the Comptroller General of Customs stayed firm. Plaintiff claimed that they were surprised to learn in the news that the Nigeria Customs Service had signed a concession agreement with Trade Modernization Project, Huawei Technologies Company, and African Finance Corporation on May 30, 2022, in total violation of the Concession Agreement vetted by the AGF in collaboration with the Minister of Finance.

They said that the Trade Modernization Project was established in April 2022 at the Corporate Affairs Commission, with the chairman being Alhaji Saleh Amodu, a close friend of the Comptroller General of Customs.

Plaintiff claimed that because the new company was only formed in April 2022, it could not and did not obtain the full business case compliance certificate from the Infrastructure Regulatory Concession Commission and Federal Executive Council approval to carry out the e-customs project.

As a result, they asked the court to declare that the Federal Government’s and its agents’ decisions to enter into concession agreements with Trade Modernization Project, Huawei Technologies Company, and African Finance Corporation in relation to the e-customs project are illegal, null and void, having been made in flagrant violation of Section 2 of the Infrastructure Concession Regulatory Commission Act 2005.

They further requested that the court proclaim E-customs HC Project Limited to be the approved and rightful concessionaire for the e-customs project, as approved by the Federal Executive Council at its meeting on September 2, 2020, and in accordance with Section 2 of the Infrastructure Concession Regulatory Act.

They also sought a court injunction for the Federal Government, through the AGF, Finance Minister, ICRC, and NCS, to complete the E-customs project with the first plaintiff by September 2020, as approved by the FEC.

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