Posted by By Sonny Aragba-Akpore (Lagos) and Mathias Okwe (Abuja) on
AFTER about three years of unsuccessful bid to turn around the embattled Nigerian Telecommunications Limited (NITEL), Pentascope International was yesterday sent packing from the national carrier.
AFTER about three years of unsuccessful bid to turn around the embattled Nigerian Telecommunications Limited (NITEL), Pentascope International was yesterday sent packing from the national carrier.
The Federal Government terminated the controversial management contract between NITEL and Pentascope and may head for court to demand some claims from the Dutch company.
The sacking of Pentascope, The Guardian investigation revealed, was ordered by President Olusegun Obasanjo over several factors.
Key among the factors is the disagreement between the Federal Government and Pentascope on the management fee of NITEL, which was contracted in 2003 by the Bureau of Public Enterprises (BPE) under the leadership of Malam Nasir el-Rufai, the current Minister of the Federal Capital Territory.
The Guardian learnt that while the National Council on Privatisation (NCP) insisted on $10 million management fee, Penta`scope allegedly stuck to its price of $16 million, a development that did not go down well with President Obasanjo.
The government finally accepted to pay $12 million.
Already, an estimated $9 million has been collected by the Dutch company from government under the deal. This prompted the House of Representatives to raise queries last year, and resolved to review the terms of the contract, which it alleged violated several sections of the Companies and Allied Matters Act of Nigeria.
Other reasons which finally led to the termination of the deal, according to Presidency sources, include:
The need to protect the assets of NITEL in readiness for its privatisation in June, 2005;
The need to boost the prospective investors' confidence in NITEL and make it attractive to the investors.
The need to reduce losses incurred by NITEL as it is alleged that Pentascope's balance sheet recorded about $500 million loss last year, which made government worry on the competence of the firm to profitably manage NITEL for privatisation.
A terse statement terminating the deal as directed by the Minister of Communication, Chief Cornelius Adebayo yesterday was addressed to the management of Pentascope, and copied the management of NITEL, M-TEL and the BPE.
The statement titled: " Release from Management Contract of NITEL/ M-TEL" reads in part: "The Boards of NITEL/ M-TEL and management of the BPE, having reviewed the purported management contract signed between you; BPE and NITEL have come to the conclusion that the operation of the management contract offends against Nigerian laws."
"Consequently, Pentascope International is immediately relieved of the management of NITEL/ MTEL. The management of Pentascope International should hand over all properties of NITEL/M-TEL in your possession to NITEL ."
The Guardian learnt that a new protem management firm is to be appointed soon to oversee NITEL until it is transferred to a new investor by June of this year.
The BPE Head of Communication and Marketing , Mr. Soji Adesugba yesterday confirmed the development but declined further comment.
Pentascope was engaged in 2003 as a stop - gap measure to provide the required managerial and technical expertise for the smooth operation of NITEL, pending the identification of a competent core investor.
Pentascope was named as preferred contractor by the BPE in questionable circumstances.
Among other conditions prescribed by the BPE were that the would-be management contractors should have the antecedent of having managed a network of about a million lines elsewhere, technical know-how and ability to raise funds to grow NITEL sufficiently.
But Pentascope was said to have none of these experiences. Curiously, the BPE went ahead to name it the preferred management contractor.
Indeed, investigations by The Guardian at the time indicated that Pentascope never had any experience let alone listed among the names of renowned management companies in the Netherlands.
It was also gathered that the company was a "portfolio" firm set up by some former staff of KPN Royal Dutch Telecoms, the national carrier in the Netherlands.
For instance NITEL's dwindling fortunes occasioned by a drop in its network profile was seen by the workers' union and the House of Representatives Communications Committee as part of reasons to fire the Dutch team.
By April 2003 when Pentascope took over NITEL management, about 455,000 lines were said to be functional in the over N100 billion network set up in 1984.
A year after, the network had dwindled to 288,000 lines.
Besides, there was a huge debt profile of about N33 billion as announced by the managers on November 10, 2004 when they addressed the press in Lagos.
The Guardian learnt that a Federal Government's legal team headed by Dr. Alex Iziyon (SAN) was heading for court to enforce the action and demand appropriate claims from Pentascope.
Though details of government's statement of claims from Pentascope remained hazy yesterday, it was leant that necessary notices have been prepared, served and filed at the Federal High Court Abuja.`