6th August, 2015
By Aisha Cole
In 2006, the Federal Government conceded Nigerian ports to 26 private terminal operators to ensure efficiency and reduce costs of doing business at the ports.
Stakeholders, conversely, note that although the aim of the concession is to improve productivity and competitiveness, little of the objectives of the exercise have been achieved.
They, nonetheless, admitted that before the concession regime, Nigerian Ports Authority (NPA) demonstrated low level of efficiency resulting in long Turn Around Time (TAT) for ships and increased cargo dwell time.
According to them, the cargo dwell time is in contrast to the 48-hour international standard to clear cargo at ports.
“The pre-concession era was also marked with over-bloated, excessive port charges and pilfering, while ports infrastructure remained in decadence.
“Nigeria’s shipping profile nose-dived with the sale of 21 ships belonging to the defunct Nigerian National Shipping Line (NNSL).
“Up till today, efforts to resuscitate the national carrier NNSL since its demise in the 90s proved abortive.
“Indigenous ship owners also groaned over lack of jobs as their ships were rendered idle, a situation which had yet to improve,’’ they observe.
They opine that conceding Nigerian ports to private operators ought to have improved services beyond the expectations of Nigerians.
In the light of this, Chief Kunle Folarin, the Chairman, Nigerian Port Consultative Council, called for an assessment of the port concession regime.
At a news conference on the Review of Port Concessioning in Lagos recently, he pointed out that in spite of the high expectations of Nigerians from the concession; little improvement had taken place at the nation’s ports.
“Corrupt practices are still prevalent among ports operators, complaints of high port charges still persist as well as lack of adequate and modern equipment by the terminal operators.
“Ships and cargo are lost to neighbouring countries because of excessive charges and access roads to the ports are in deplorable condition,’’ he said.
Sharing similar sentiments, Malam Mohammed Bashar, the Permanent Secretary, Federal Ministry of Transport, said that the port reform had not even met some expectations of government.
He noted that arbitrary and high port charges, undue delay of cargo clearance and abuses of the concession agreement were prevalent.
He explained that the purpose of the concession exercise was to encourage investors in the port sector through Public Private Participation and to reduce cost of doing business at the ports.
He explained that the government approved the concession to create jobs and ensure user-friendly port services.
Bashar, however, said that the Federal Government had made efforts to address the negative impact of port concession by appointing the Nigerian Shippers’ Council (NSC) in 2014 as the interim regulator.
He said that the NSC would establish effective regulatory regime to control tariffs, rates, charges and other related economic activities.
Assuring the stakeholders of efficient services at the ports, Mr Hassan Bello, the Executive Secretary of NSC, said that the council would address cumbersome cargo procedure, massive capital flight, leakages in revenue and inadequate information of port processes.
“Nigerian ports remain costly and uncompetitive, leading to continuous diversion of Nigerian cargo to ports in neigbouring countries,’’ he observed.
He said that the council, as the economic regulator, would abrogate some illegal costs at the ports and increase demurrage and storage free days.
He said the council had constituted quarterly meetings of customs area controllers and collaborated with the relevant agencies to clear the port access roads.
Bello said the council had also set a bench mark rate to discourage arbitrary charges and it had taken steps to ensure full automation of ports operations, vessel intelligence, cargo intelligence and risk management.
“We are working towards the enforcement of the publication of terminal operators rates as specified in the concession agreement in order to instill healthy competition ,’’ he said.
This, notwithstanding, a maritime lawyer, Mr Osuala Nwagbara, opined that concession exercise was not a complete failure.
“There is no doubt that nearly 10 years after the leasing of port infrastructure to private entrepreneurs in Nigeria, there had been remarkable improvement in port development and service efficiency.
“There have also been complaints by users of port services that concessionaires of Nigerian ports have not kept to the terms and conditions of the tripartite agreement between the concessionaires, Nigerian Ports Authority and Bureau of Public Enterprises,’’ he said.
Nwagbara said it was heartwarming that the role of the NSC as interim port regulator had been gazetted.
“We will look forward with zeal and great hope to invoke sanction against violations of the provisions of the lessee and the concession agreement in the port system,” he said.
Similarly, some concerned citizens hold the belief that port concession regime has encouraged increase in cargo throughput –imports and exports– from 44,952 containers in 2005 to 1.2 million in 2014, while TAT had also increased.
They advise relevant authorities to address corruption and ensure that documentation processes at ports are internet technology-compliant.
According to them, the NSC, as economic regulator, must issue transparent and enforceable guidelines that will ensure the realisation and sustenance of the objectives of the port reforms.
By and large, Nwagbara advised that the NPA must perform its own obligations and monitor the concessionaires and other service providers with the enforcement of the concession agreementhe
—Cole wrote this article for the News Agency of Nigeria