Huawei Technologies is planning to sue the Nigerian government in London in the next month over the $304 million partnership deal made with the Nigeria Customs Service.
The project was initiated by Bionica West Africa Limited in 2018, with Bergman Security Consultant and Supplies Limited (representing the NCS), Huawei, and African Finance Cooperation (AFC) as partners, and was approved by the federal government on September 17, 2019. This followed a memo sent to the Federal Executive Council (FEC) by the Minister of Finance, Budget, and National Planning.
Acting on the memo by the Minister of Finance, Budget, and National Planning to the FEC for approval, President Muhammadu Buhari had, vide letter SH/COS/08/10/4/225 of September 17, 2019, granted anticipatory approval for the engagement of the Consortium Bionica Technologies West Africa Limited (lead sponsor), Bergman Security Consultant and Supplies Limited (co-sponsor), Africa Finance Corporation (lead financier), and Huawei (lead technical service provider), to establish a project SPV to enter a 20-year concession arrangement with NCS and ICRC for the Customs Modernization Project (establish paperless Customs Administration) (electronic Customs
NCS insisted on a different shareholding structure and control of the SPV, resulting in litigation. NCS allegedly falsified documents to enable it to expunge Bionica and hand the project over to a company allegedly formed by an ally of the Customs Comptroller General.
In a letter dated May 23, 2022, which was received by the president’s office on May 24, 2022, the Comptroller-General of Customs claimed that following the final vetting and approval of the concession agreement by the Attorney General of the Federation (AGF) for execution by parties, Bionica Technologies West Africa Limited, one of the co-sponsors, had rejected the approved concession agreement by the AGF as directed by the FEC. He added that Bionica rejected and refused to execute the concession agreement, which had been extensively reviewed by all stakeholders and approved by the AGF.
Based on this, Bionica sought and got approvals from PenCom, the Infrastructure Concession Regulatory Commission (ICRC), and related government agencies, and then proceeded to secure the federal government’s approval for the take-off of the project.
But things took a different twist when the Customs Service ignored a federal government directive and made efforts to delete Bionica as the lead sponsor.
In a suit filed by Bionica, which had the federal government and the Attorney General of the Federation (AGF) as respondents, the company prayed the court to intervene in the subject matter, threatening the e-Customs project expected to automate and digitalize all NCS business processes and procedures and establish a paperless digital Nigeria Customs organization, thereby institutionalizing the use of emerging smart technologies in all NCS operations.
Sources with knowledge of the deal told reporters that the full development and implementation of the e-customs project would generate a total revenue of $176.2 billion over the concession period and would adopt a staggered revenue-sharing formula between the concessionaire and the federal government of Nigeria.
Since the approval of the deal, the management of NCS, which wanted a different shareholding structure and control of the SPV, has been battling the lead sponsor, resulting in litigation.
