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EVALUATING NIGERIA'S PORT CONCESSION ARRANGEMENT

By NBF News

The litany of complaints over the performance of most terminal operators has compelled the Federal Government to take steps to evaluate the activities of the port concessionaires. SULAIMAN ADENEKAN examines how the ports have fared

Nigeria currently has 26 ports. The first Nigerian port was inaugurated in the pre-independence period and its establishment dates back to the middle of the 19th century.

Nigerian ports were concessioned in 2006 as a result of an inefficient port system, high port charges, long turnaround of cargoes and ships and high level of corruption.

In spite of concessioning of the ports, not much improvement seems to have been noticed at the nation's ports. Importers had at various times complained of high port charges, lack of equipment by the terminal operators and other corrupt practices. This situation has made the customs agents to embark on strike action at various times.

The terminal operators have also complained of lack of adequate infrastructures at the ports, thereby impeding their business operations, as the environment under which they operate is not conducive and this increases the cost of doing business.

The Senate Committee on Marine Transport headed by Senator Gbemi Saraki, condemned the process leading to the 2006 port concession programme.

She alleged that there were irregularities in the amount that was paid by the terminal operators. Saraki also said that the terminal operators had reneged on their part of the agreement as they failed to bring in their investments.

Saraki ,therefore, called for a review of the deal, alleging that there was insincerity in the whole arrangement.

However, the Minister of Transport, Alhaji Yusuf Suleiman, recently inaugurated a committee tagged 'Port Reforms Evaluation Committee' aimed at reforming the 26 terminals in the country.

Suleiman said, 'Government's reform agenda for the sector was therefore targeted at improving; enhancing management capability of enterprises; creating a conducive institutional; legal and regulatory framework; developing private sector participation in financing, management and operations of port facilities.

'Other related objective of the reform is to increase the efficiency of port operations,decrease the costs of ports services to the users,decrease the costs to the government for the support of a viable port sector, boost economic activity and accelerate development; and make Nigeria the hub for international freight and trade in West Africa.

'I have every confidence that this committee which has been carefully chosen will do a thorough job and come up with a decisive report which will form the basis for further government policy direction on the issue and proffer lasting solution to emerging challenges.'

He said the government decision to concession the ports as part of a reform programme was informed by the urgent need to address the declining performance of Nigerian Ports which were adjudged to be inefficient and unattractive to shippers.

The Managing Director, Nigerian Ports Authority, Mallam Abdul Salam Mohammed, said that the ports were concessioned to increase efficiency in operations, decrease cost of port services to stakeholders, reduce cost to the government for the support of viable port sector, and attract private sector participation so as to free public resources for public services

This objective, according to him, led to the invitation of bidders in December 2003 and 110 applications were received while 94 of the applicants were pre -qualified and issued bid documents. Most of the terminals were handed over in 2006.

According to him, the role of the private sector (terminal operators) includes cargo operations, port labour, investment in equipment, investment in terminal maintenance and insurance of concession assets.

That of the NPA includes port planning, licensing and control, port development, technical regulations, marine services and channel management.

Historically speaking, according to NPA sources, upon the discovery of the rich natural resources in the West and Central African by the Europeans needed for their economic industrial revolution, the Bight of Benin was opened up by John d'Aveiro of Portugal in 1485, while Captain Wyndham of Britain landed on the nation's coast in 1553.

The entrances to the Lagos Lagoon aimed at providing facilities for ocean going vessels were opened in 1906, which was when approval was given for the construction of the first length of the East Mole and railway from Lagos to Otta and then to Abeokuta to aid easy transportation of stone needed for the construction of the mole.

On February 1, 1914, the first mail-steamer S/S Akoko entered the Lagos harbour which made vessels to begin to use the facilities provided at the Customs wharf on Lagos Island two months later.

However, the decision to develop Apapa Port was taken in 1913 and construction of the first four deep-water berths, 548.64 metres long in Apapa, began in 1921. Twenty seven years later in 1948, an additional 762 metres of berths were constructed and about 41 hectares of reclamation behind the wharves were formed to accommodate transit shed,warehouses and marshalling yards.

The discovery of coal in Enugu motivated the building of ports in the eastern flank of the country; as work commenced on the building of Port Harcourt wharf during the first quarter of the century.

In 1913, Port Harcourt port was opened to shipping by the Governor General, Lord Lugard, while the railway line to Enugu was completed three years later in 1916 and a berth for colliers was dredged out and constructed as a place where loading could take place.

Four berths of 1,920 feet long were developed at the Port Harcourt Port in 1927, and following a report by the Port Harcourt Port Advisory Board, the sum of four million pounds was provided for the first major extension work of the Port Harcourt Port in 1954.

In 1960, the Nigerian Ports Authority embarked on an elaborate manpower development through Cadetship Training Awards and emphasised on Marine Engineering, Accountancy, General Management, Civil, Mechanical and Electrical Engineering to boost its operations. By the early sixties, beneficiaries of the trainings awards had begun to graduate and shape the future of the ports industry.

In Lagos, the authority added six berths of 943 metres to the existing ones, while four berths with a total quay length of 506 metres were added to the facilities and steps were taken to mechanise the traffic operations in these ports. Port development then fell in line with the first National Development Plan between 1962 and 1968.

The sum of N45m was spent during this period on the execution of second Apapa Wharf Extension and improvements of port facilities in Port Harcourt.

During the civil war between 1967 and 1970, The Federal Military Government enacted a special decree which empowered the Nigerian Ports Authority to acquire the ports of Warri, Burutu and Calabar,

previously operated by private entrepreneurs. Holts Transport were former owners of Warri Port, UAC owned Burutu Port while Calabar Port was originally owned by five operators.

Meanwhile, N3.35m was spent by NPA at the time to acquire these ports, while Lagos Port with its comparatively limited capacity was made to bear the weight and burden of the tremendous flow of war time cargoes and other goods coming into the country.

Between 1970 and 1974,the Federal Military Government drew up a Post War Second National Development Plan for the rehabilitation of Port Harcourt, Bonny, Calabar, Koko and Lagos ports in which N4.1m was initially earmarked to that effect. These initial post-war port development efforts were however not adequate to prevent congestion phenomenon that was building up in the ports since the civil war period which later led to unprecedented ports' congestion between 1970 and 1975.

In 1975-1980 this marked the era of third development plan in which the Tin Can Island Port was commissioned by October 14, 1977 and two years later on 16th June, 1979 the new Warri Port was commissioned together with the new Calabar Port on 19th June, 1979.