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Osubi Airport Debacle and the Morning After

The recent withdrawal of air traffic services at the Osubi Airport in Warri, Delta State by the Nigerian Airspace Management Agency (NAMA) and the subsequent brief closure of the gateway was fallout of the agelong tradition of contractual impunities in the highly sophisticated sector afterall.

Nigerians, particularly the flying public experienced  a dose of avoidable embarrassment following flight hiccups that trailed the long drawn battle of wits, supremacy and fireworks, caused ostensibly by dearth of caution and due diligence in entering the contract between Shell Petroleum Development Company (SPDC) and the current operator, Shoreline Oil Services Limited.

SPDC had entered into air traffic services contract at the airport with NAMA for a monthly remittance of N18,543,517  before the oil multinational  gave out the facility to Shoreline Oil Services which continued operating the Osubi Airport without due recourse to the original contract with SPDC

The palpable oversight on the part of Shoreline Oil Services overtime transmuted to a pile of debt totalling N566,422,000.50 which led to NAMA withdrawing its services to the airport in September this year.

Investigation by NigerianCurrent revealed that SPDC may not have appropriately briefed Shoreline Oil Services on details of contractual terms it had with NAMA over monthly charges for the air traffic services being provided.

A source disclosed that the rancour would have been avoided should SPDC had properly briefed the current operator; Shoreline Oil Services limited which it sold the airport to.

The operator of the Warri Airport ostensibly bought over the airport from Shell Petroleum Development Corporation without proper briefing on the full liability of the company.

It will be recalled that NAMA withdrew its services from the Osubi Airport over a debt balance of N566,422,000.50 accumulated over time by the Osubi Airport only to restore the services October 24 after a N31 million payment was paid by Shoreline Oil Services limited.

Light soon began to settle on the terms of agreement after NAMA began moves to recover the huge debt from the management of the Osubi Airport, culminating in a letter to SPDC, dated 26th April, 2016 and signed by one Kola Karim, a Director with Shoreline Oil Services limited.

The letter stated that his company had investigated and discovered that NAMA’s claims of which there is an agreement for SPDC to pay N17, 660, 000 ( seventeen million, six hundred and sixty-six thousand) monthly for service fees as Air Traffic Management Services Agreement (ATMS) was valid.

The company, from the letter, however absorbed itself by stating that when SPDC divested from Osubi Airport it only made available a contract which was for the sum of N2,976,583. 00, as monthly fee from NAMA.

Karim posited that it was the responsibility of SPDC, which no longer handle the airport to bear the cost of the differential.

Our source who is privy to the agreement however said that due diligence may not have been thoroughly done before consummating the agreement with SPDC, leaving Shoreline the current owners to bear the brunt of the former’s indebtedness.

He pointed out that Shoreline Oil Services Limited also ought to have been upped its vigilance while taking over from SPDL, knowing that it is normal to inherit both asset and liability of the deal

Our correspondent further learnt that the service fees charged from 2009 was N18,543,517 monthly but because SPDC was paying N17,660,600 monthly as against what is on paper, the agency ( NAMA), had been playing along, being a cost recovery agency.

The letter from Shoreline Oil Services Limited which was addressed to the Financial Director (Nigeria and Gabon), Shell Exploration and Production Africa also read in part:

“Our investigation regarding NAMA’s claims of the existence of a .. Between itself and SPDC Ltd on behalf of itself and partners (SPDC) upon which they asserted that there is an agreement to pay a monthly service fee of N17, 660, 000 ( seventeen million, six hundred and sixty-six thousand) under an Air Traffic Management Services Agreement (ATMS). NAMA has provided evidence of SPDC’s payment.”

“However, when SPDC decided to close out/divest 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 NGO1002424) which expired 30th June 2012 for the sum of N2,976,583 as monthly fee to NAMA.”

“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 as at the completion of the sale transaction and the non-disclosure of payment of N17, 660, 000 as monthly fees to NAMA.”

Meanwhile, the Public Affairs unit of NAMA has continued to keep sealed lips on the matter other than saying that the Osubi Airport operators had paid N31,000,000 and that the agency will contact them to reconcile and defray their remaining debt.

NAMA spokesman, Khalid Emele,  said: “NAMA is a cost recovery agency and has no powers to write off any debt as a government agency just as our agency wants its clients to also be in business so we all can grow in turn. It is not the agency’s wish for anyone to face challenges,” just as he said “on what you asked, I cannot confirm or deny.”

NAMA claimed that its decision to open the Osubi Airport was further informed by appeals from well-meaning stakeholders and in consideration of the overall interest of the public.

By Gboyega Adeoye

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