Gov’t, APM Terminals At Odds Over US$29M ‘Remittances’

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APM Terminals holds the concession to operate the Free Port of Monrovia for 25 years.

The Daily Observer has reliably learned that the Government of Liberia may pursue legal remedy against the management of APM Terminals Liberia for allegedly defrauding it of millions in United States dollars for auxiliary service fees collected between the period February 2011 to July 2019.

According to our source, the Government of Liberia, through the Internal Audit Agency (IAA), recently completed a reconciliation audit of the National Port Authority (NPA) and APM Terminals on fees collected by APM Terminals, as well as royalties remitted to NPA management, considering the quantity of items handled or services performed.

According to the audit report, APM Terminals received an aggregate collected revenue value of US$29,607,017.48 that should have been remitted to the National Port Authority (NPA).

“We performed a reconciliation of fees collected by APM Terminals Liberia Ltd, alongside royalties remitted to NPA, taking into account quantity of items handled or services performed during the period, February 2011 to July 2019. We identified revenue lines, including Container Throughput Handling, General Cargo Handling, Marine Services, Weigh Bridge and Auxiliary Services fees; established annual fees collected with royalties remitted, and tested the accuracy of amounts remitted based on the approved tariffs,” the audit report stated.

“We requested for monthly bills that were issued to APMT, copies of receipts, copies of returned cheques and bank statements associated with remitted royalties. Except for monthly bills, which were incomplete, NPA did not provide us the rest of the documents mentioned above,” the report said, highlighting the serious deficiencies in the NPA’s own record keeping processes.

The report continued: “The exercise largely relied on documents provided by the Concessionaire (APM Terminals Liberia Ltd). Based on Royalty Reports submitted by APM Terminals, total fees collected on various revenue lines for the period (February 2011 to July 2019) valued US$341,988,669.56 while US$57,622,569.38 was remitted.”

However, the report further stated that APM Terminals Liberia collected Auxiliary Service fees, with rates that are not mentioned in the approved concession rate (Appendix 10). The Tariff Report indicates collections for auxiliary service fees at an aggregate collected revenue valued US$29,607,017.49 without remittance to National Port Authority (NPA).

To the contrary, according to the report, a revenue line created by APM Terminals, referred to as ‘Auxiliary Revenue, comprises services that are directly identified under Container Throughput Handling as referenced in appendix 10 of the concession agreement.

Importantly, some of the services identified under Container Throughput Handling, which have been deliberately shifted to Auxiliary revenue by APM Terminals, include 40’ Import Reefer Full, 40’ Export Reefer Full, 40’ Import/Export reefer Empty, 20’ Transshipment Reefer Full, 20’ Transshipment Reefer Empty, 40’ Transshipment Reefer Full, 40’ Transshipment Reefer Empty, among others.

APM Terminals refrigerated container rack. At the time of this photo there are no refrigerated containers on service.

The term “Reefer” is an abbreviation for refrigerated containers, which APM Terminals says it developed its capacity to support, realizing the need after the concession agreement was signed. According to George Adjei, Managing Director of APM Terminals Liberia, the company decided to offer refrigerated container storage services to support importers and exporters of perishable goods, such as supermarkets, local farmers, among others.

The refrigerated container storage is a set of racks connected to power generators working to keep refrigerated items fresh by cooling until ready for release by customers outside of the port or ready for shipment.

The sources furthered that, like in the case of Storage fees, there is no Concession rate mentioned for remittance of Auxiliary revenues; however, APM Terminals has been using Concession rates stipulated for Container Throughput Handling of 22.8% and General Cargo handling of 18.8% to remit on Storage fees.

Therefore, our sources have hinted that the government of Liberia has detested APM Terminals’ justification on grounds that remittance of royalties, in accordance with the Concession fees, is subject to income generated on Services Rates. That remittances are made on Containers Throughput Handling, General Cargo Handling, Marine Services and Weigh Bridge, the government says, provides sufficient reasons for remitting on auxiliary revenue.

Amidst the tight financial and economic space in the country, should this legal action be perfected against the APM Terminals, sources in government circles are hopeful of GoL retrieving the more than Twenty-nine million United States dollars in remittances on auxiliary fees allegedly denied it for the last eight years.

In response to a Daily Observer inquiry on the matter, APM Terminals Managing Director, George G. Adjei, in an interview last week, said the company has not violated the concession agreement.

He made reference to Section 7.07 (a) and (b) of the Concession Agreement between APM Terminals and the Government of Liberia, which outlines general and specific parameters, respectively, for Service Rates.

The clause concerning General Parameters states that: “(a) The Concessionaire shall ensure that the Services Rates shall be in accordance with Applicable Law and competitive with other ports of comparable cargo throughput and scope of activities in West Africa.”

For Specific Parameters it says: “(b) For services that are listed in Appendix 10, the Concessionaire shall charge rates for its Operations (the Services Rates) which are equal to the rates set forth in Appendix 10 in accordance with the terms and conditions included therein. For services which are not listed in Appendix 10, the Concessionaire shall charge rates in accordance with 7.07 (a) and any other applicable provisions of this Agreement. Value added taxes and other taxes shall be added as required to the accounts rendered to the Concessionaire’s Customers. Income generated from charging the Service Rates shall accrue directly to the Concessionaire without any collection, deduction or set off by the Concession Entity.”

In Appendix 10 of the concession agreement, Services Rates are set forth in tables per the following sub-items: Container and General Cargo Quay Handling; Container Storage; General Cargo Storage; and Marine Services. The Services Rates shall be adjusted on an annual basis in accordance with the Inflation Index.

Thus, Mr. Adjei reasons, the concession agreement allows APM Terminals to provide additional services, outside of Appendix 10 of the concession agreement, without being required paying royalties, an issue he said was raised by the auditors that amounted to US$29 million as “defrauding the national government.”

‘Revenue Suppression’ 

The IAA audit report also accuses APM Terminals of revenue suppression — reporting royalties and fees collected from February 2011 to July 2019.

According to the audit report, total royalties reported by APM Terminals were valued US$23,245,682.38, while the recast amount from the reconciliation audit is US$25,737,788.13, which resulted to an unreported variance of US$3,240,834.61.

Expert sources have hinted that the variance of US$3,240,834.61, if not properly explained with adequate evidence, could mean that APM Terminals reported an understated revenue, which subsequently means royalties for the mentioned period were also understated and suppressed at the disadvantage of the government and people of Liberia.

Mr. Adjei further said that he could not publicly address the audit report beyond his earlier references to Section 7.07 (a) and (b) of the concession agreement, because the audit report calls for mutual agreement between the two parties, including the National Port Authority (NPA) and the APM Terminals, until final conclusion is reached.

“We agreed for the audit to be conducted by the NPA through the Internal Audit Agency (IAA), which is in agreement with the concession agreement. Again, we also responded to the findings. We agreed with NPA that until the matter is resolved or concluded, we should to go to the media and still want to respect the agreement,” Mr. Adjei told Daily Observer.

Mr. Adjei said since the inception of the concession agreement in 2011, APM Terminals continues to comply with the agreement by meeting all of its requirements.

Mr. Adjei said the mutual agreement for the withholding of the audit results was agreed upon prior to the conduct of the audit, indicating that there was no time frame set for the conclusion of the discussions between the parties over the audit report.

He said the company would respond to any calls from the court if called upon, as indicated by the Government of Liberia to invite or take APM terminals to court.

9 COMMENTS

  1. I DO NOT KNOW WHY PEOPLE CONTINUE TO TALK ABOUT LEGAL ACTION WHEN IT COMES TO RAMPANT CORRUPTION IN LIBERIA. THERE IS NOT A SINGLE PRECEDENT TO SHOW RAMPANT CORRUPTION IS A CRIME IN LIBERIA, WE DO NOT HAVE A PRECEDENT BECAUSE RAMPANT CORRUPTION IS NOT A CRIME UNDER THE LAWS OF LIBERIA AND THAT IS WHY WE CALLED LIBERIA SWEET LIBERIA WITH SO MANY MANY FOOLS LIVING IN PARADISE ON THE DAILY BASIS MY PEOPLE. A COUNTRY WHERE CORRUPTION IS NOT A CRIME AT ALL, TELL ME WHO DOES NOT WANT TO WORK FOR GOVERNMENT. (WATCH)

    • james you are right there will be no repercussions to any crimes committed. Liberia is a whore and the politicians are the pimps.

  2. Guys,

    Forget about what happened from 2011 to 2017. Put mechanisms in place to begin to effectively collect government revenues. To date, the Liberian government does not even collect 1% of the taxes to be collected. The IMF put the recovery rate at 0.017%.
    Forget about what happened in the past, leave it with a credible and impartial anti-corruption body, get down to work. Our people are suffering, pay their salaries, improve their livelihood. Liberia is a virgin economy. Start some something concrete and serious.
    If you are unable, Cummings and “apologists” are eager to take on the job.

    • i beg you yah. I here in america working 60 hours a week on a time clock. I wish i was in Liberia stealing money. i swear if they offer me a job in Liberia i will quit my job and run to Liberia. I make $50,000 a year but i will do better working for the Liberian government. i could easily make $200,000 a year stealing money from stupid Liberians who have dinosaur brains. We who are here are dying to get a good job in Liberia because it is legal to be corrupt and to steal. if you rob Liberia you will not go to Jail ROBERT SIRLEAF

    • DOLO, I PERSONALLY DO NOT WANT TO BELIEVE YOU ARE JUST ONE OF THOSE LIVING IN UTOPIA, THERE IS NO WAY ON REAL EARTH NOT UTOPIA, TO HAVE A VIABLE FINANCIAL SYSTEM IN PLACE IN LIBERIA THAT WILL BENEFIT THE CITIZENS AND LIBERIA AT LARGE, SIMPLY BECAUSE RAMPANT CORRUPTION IS NOT A CRIME UNDER THE LAWS OF LIBERIA, SO CORRUPTION NOT BEEN A CRIME IN LIBERIA IS NOT IN DISPUTE AT ALL SINCE IN FACT RAMPANT CORRUPTION IS IN OUR DNA. ALL ANYONE HAS TO DO IS TO FIND A JOB BY ANY MEANS IN GOVERNMENT AND THEN GO AHEAD WITH STEALING AS MUCH AS YOU CAN WITHOUT ANY FEAR, IT IS NOT A CRIME AT ALL. LIBERIA IS A COUNTRY WITH SO MANY MANY PEOPLE LIVING IN PARADISE ON THE DAILY BASIS. EVEN THE GUYS IN SIERRA LEONE ARE SO EDUCATED, MINDFUL AND WELL VEST IN INTERNATIONAL LAWS THEY JUST DISREGARDED LIBERIA’S REQUEST TO EXTRADITE COSTA , ALL BECAUSE THE GUYS IN SIERRA KNOW VERY WELL THERE ARE SO MANY MANY FOOLS LIVING IN PARADISE IN LIBERIA ON THE DAILY BASIS MY PEOPLE . (WATCH)

      • Mr. Kpadeh

        It is not difficult at all. We can fiscally discipline Liberia for the equal distribution of wealth. It takes the willpower of the leadership.
        Weah said he could fix things, but he set a bad precedence. It automatically disqualifies him. In 2023, vote Cummings and just give him 6 months to see changes that will unfold before your eyes. It’s easy to do, but not with a corrupted leadership like Weah’s.

      • So true, Uncle Hney. Only Liberians, in unison and led by one of the best and patriotic of us, can change the status quo. So, don’t just sit and criticize, think about doing something for Liberia.
        We understand not much can be done under a leadership without vision or plan. A nation is not run by vain passion but skillsets and intellects of its citizenry. Therefore, let’s start by upholding excellence, rewarding merit and hard work. Let’s begin to frown on ineptitude, mundanity and illiteracy. Let’s learn to have one another’s back and forge ahead with optimism to begin a new day in Liberia, yes, it is possible!

        Brother James, 25 years may seem a long time but its actually very short. Liberia doesn’t have companies to run such infrastructure after many years of fratricide. Foreign companies with the required technology and skillsets had to come to start the process. By the end of the 25-year contract period, if the country cannot prove it has the necessary skillsets and techniques to take over, the contract should be renewed.
        The balls must get rolling until Liberians can be capacitated technologically and financially to assume their destiny. Our prayer should be the laws being voted in both houses. They may compromise the future of this country.
        I am personally begging highly skilled technocrats and seasoned lawyers to get interested in leadership at both houses. Leaving both houses with wisecrackers is detrimental to the sustainable development of the country. Therefore, I support the maintenance of emoluments being paid to our lawmakers. The citizenry should vote in the right people, people who see, understand and easily adopt to the unraveling technological advances and threats at hand. Ghana has started delivering medical equipment and assistance to remote locations by drone, when are we going to even imagine such era for Liberia with what we have at hands?

        Good morning Uncle Hney and Mr. Davis!
        Stay blessed!
        By the way Uncle Hney, you would make a brilliant and very good senator, think about it. We could run your campaign come 2023, through or without the ANC.
        Let me know what you think.

  3. On a very serious note on this article, where it is alleged that the APM Terminals as a company has signed a 25 year contract with the Liberian government. But what is that supposed to mean? Let see if there is some understanding about this 25 years contract as it relates to foreign take over through some ideas of privatization of government entities and its benefits. From the government point of view, it is investment being made by a foreign company and it is an opportunity for government not to be burdened with administrative costs and salaries and corruption in running its entities. The only answer to that is Privatization ! Now , privatization of a county’s entire entities by a foreign company or companies amount to that old school word of neo-colonialism. Or even worse Colonialism. But the two words although have different meanings and opinions , they are relatively responsible for the backwardness of the human resources of the country. Without going through all the arguments, after the 25 years of foreign occupation through a privatization scheme , how realistically are the citizens and the government ready to run the affairs of that entity ? What training ? And not just any kind of training, but technological training that will be sustainable in maintaining the operations of the port . That is when and if APM Terminals leaves . There are calls to hand ove the port of Grand Bassa to a foreign private company. Just like the same as the APM Terminals. The nation is still waiting to see if any lesson was learned through technological training and business administration, and that Liberians can run their own ports, and generate the needed resources to operate that port. But sadly, another 25 years is in the making. After neo-colonialism through privatization by foreign companies is all done away with, how prepared are the people to take over. If these long term contracts were meant to help build up the human resources capacities of the country, the country is very far from that objective. Privatization without a cause or with a limited cause, it profits that nation nothing. The old RIA thought to be run by the American airline PanAm, perhaps after 20 years or less, it was President Tolbert who took pride to give that airport a facelift. Perhaps because of shame or for the OAU conference. But PanAm did nothing for that airport. Don’t know if PanAm was responsible for RIA, but as the airport’s main carrier, it is safe to assume. So RIA has become do it yourself( DIY) after all those years. Bong mines and the other iron ore company, after those companies left through privatization, the nation could not pick up the pieces. Privatization is not wrong, if it is meant to produce and to build up the human capacity of the nation. It is wrong when privatization comes neo-colonialism through privatization, leaving the country and its people without being able to pick up from where the company’s contracts ended. So there are many companies old sites that tells that very story in that country. And the government and its people are lacking in every technological skills to pick up the pieces. Even if loans were made available, they just can’t. Next is the privatization of LEC. Will there be better planning done as to enhance better technological skills through education and training , or just the usual APM Terminals contract ? Although corruption was meant to be brought under control through privatization, boy, that’s a lots of cash left outside of the system. Read the Panama Papers and the connection of the former UK Prime Minister working behind the scenes for the privatization of the port in Grand Bassa.

  4. Gentlemen,
    I really understand how some of you feel about Liberia. There aren’t enough jobs to go around if there are jobs in the first place. There is perennial corruption. Some high-level government employees survive on theft. Most of the major roads are messed up because no one cares about servicing them. Education is not given a special attention. Hospitals are usually short on medication. Running water is in short supply. Electricity comes and goes. Sexual promiscuity is a way of life for little girls and sometimes for boys. Lawmakers earn more money than their United States counterparts. But yet, no one sees the effectiveness of laws they make. In some cases, the judicial branch of government is neither methodical or meticulous. The list of things that need to be done is almost endless. Should we abandon our country? No way.

    Suggestion: please don’t give up!
    It hurts. I really understand. Countries that gained independence 100 years after we declared independence seem to be in a better position than us. For instance, I found out recently that a US private Ivy league university has a facility in Ghana. There’s not one single being who could magically change Liberia. (This is not an insult, but rather a simple reality).

    So who fixes the motherland? All of us. Through a collective effort. Let’s not get discouraged.

    Peace

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