The Federal Government’s approval for the dredging of the Calabar Port access channel is causing a stir in the maritime industry. With billions of naira sunk in the project with nothing to show for it, many are wondering whether the project has not become a conduit for siphoning public funds. Maritime Correspondent OLUWAKEMI DAUDA examines the issue.
President Goodluck Jonathan’s approval of the capital dredging of the 84-nautical mile Calabar Port access channel is giving many in the maritime industry the goose pimples.
While some applauded the move, apparently because of the project’s capacity to boost the economy of Cross River State and the nation, others were apprehensive because it has been abandoned by contractors for years despite the billions of naira sunk into it.
The Minister of Transport, Senator Idris Umar, who broke the news to Southsouth and Southeast traditional rulers, led by Edmund Daukoru, the Amanyanabo of Nembe, in Bayelsa State, in his office, said the delay in the work had impacted negatively on the economic activities of Cross River State and the country. “The Tinapa Resort, Calabar has been a little bit dormant because of the non-functionality of the channel.
At last, the matter has been concluded and President Jonathan has graciously approved that work should commence at the channel. The remaining part of the channel that has not been dredged will now be dredged and the Calabar Channel Management Company will take charge of the capital and maintenance,” Umar said.
The Managing Director, Nigerian Ports Authority (NPA), Habib Abdulahi also disclosed in Cross River State that the Federal Government has awarded the contract for the dredging of the port. Abdulahi made the announcement when he paid a courtesy visit to the Acting Governor of the state, Mr Efiok Cobham, at the Government House, Calabar as part of his familiarisation tour of ports across the country. His words: “I am very happy and eager to inform you that Mr. President has approved the capital and maintenance dredging of the Calabar Port.” Abdullahi promised that the dredging would begin before the end of the year but it would be done in phases.
Umar and Abdullahi werehowever, silent on why previous attempts to dredge the channel failed and why those who handled the project have not been brought to book.
History of the port
The history of Calabar Port can be traced to the pre-medieval merchants’ ventures of the 15th century to the present day. It served as an important focus of trade with the outside world in the Eastern states and natural port for the northern states of Nigeria. The old port was privately administered and operated by various shipping companies amongst whom were M/S Palm line Agencies Limited and Elder Dempster Agencies until December 1969 when the Federal Government took over the inadequate Calabar Port facilities from the erstwhile operators and vested it on the Nigerian Ports Authority.
The development, modernisation and expansion of the Calabar Port was embarked upon under the Third National Development Plan 1975 –1980 in order to make the Port facilities cope with the ever increasing demand of the country’s economy. The current port complex was commissioned in June, 1979 and consists of the following major operational areas: A total land area of 38 hectares, four quays each measuring about 215metres long and 40metres wide. The four quays were also divided into six operational berths.
The port also has two warehouses measuring 150 metres by 40 metre and 175 metres by 40 metres Its operational area was divided into two concessioned terminals. Terminal A consisting of two berths was concessioned to Messrs Intels Nigeria Limited, while Terminal B consisting of four berths was concessioned to Messrs ECM Terminal Limited.
Previous dredging
The first contract was awarded in 1996 by Gen. Sani Abacha, former Head of State at N3 billion, while the second was awarded at $56 million, by President Olusegun Obasanjo in 2006.
Before the latest move, $56 million (about N8.9 billion) had been spent on the 84kiliometres port channel without result. The dredging project began in July 2006 and lasted for 64 weeks. The channel is expected to be used by vessels with 30,000 Gross Registered Tonnage since the metre depth of the channel would be 9.5 metres minimum.
The contract was awarded to Messrs Jan de Nul and Van Oord. The entire length of the channel was divided between the two firms.
While Van Oord was paid $26 million to dredge the first 44 kilometres, Jan de Nul got $30million to dredge the last 40kilometers of the water channel. The Federal Government told the two firms to scoop out 25 million cubic metres of sand to achieve an overall draft of eight metres to enable big vessels sail to the port. The two dredging companies started work on October 19, 2006 and demobilised from the location in December.
There are worries that the project was badly conceived in the first place because the two companies knew that the volume of sand in the channel far exceeded the 25 million cubic metres estimated in the contract agreement. The firms were said to have hurriedly left the site after they met the specified volume, leaving behind over 12 nautical miles untouched and without buoys on the dredged part. In the absence of buoys, excavated sand quickly filled the dredged portion and rendered initial effort useless.
The incessant failure of the contract for the dredging of the 84-nautical mile Calabar Sea Port channel has crippled the smooth navigation of ships and operation of port for almost 20 years.
About three years ago, another attempt was made by awarding LCM the contract, but a controversy arose and the foreign firm which participated in the bidding process, protested and petitioned the NPA and accused it of favouritism. The foreign firm accused NPA of giving out the job to the company because of its interest in contravention of the Public Procurement Act. The company claimed it submitted the lowest bid for the project and therefore, had the most competitive bid, which ought to have been considered as the winning bid.
But the NPA later defended its action, saying the completion period and the fuel price quoted by the foreign company was not realistic. It said the company quoted $765\Mt, while the prevailing rate was in excess of $1000. “This will lead to the claims of variation and price adjustment even before the signing of the contract agreement,” said the NPA in response to enquiries on the contract by the Federal Ministry of Transport.
Efforts to dredge the port access channel since 1996 have repeatedly hit the rock, costing the nation over N96 billion. The port has been perennially plagued by shallow channel, making freight cost to the port expensive.
Fresh concerns by Chief Anenih
The Chairman, Board of Director of the NPA, Chief Tony Anenih, last year, sent a strong-worded petition to the Minister of Transport, querying the rationale behind the award of the contract for the dredging of the channel to the company belonging to a serving Senator by NPA’s Managing Director, Habib Abdullahi. The NPA chairman called for the reappraisal of the contract and questioned the basis for choosing the consortium to manage the company.
“The purpose of this letter is to respectfully draw the attention of the Honourable Minister to the Joint Venture Agreement, which was made on January 25, 2013, between the NPA and the Consortium lead (sic) by Niger Global Engineering and Technical Company Limited. The said agreement created a partnership arrangement between NPA and the Consortium and gave the Consortium the right to operate a Joint Venture Company, Calabar Channel Management Company Limited, where NPA holds 60 per cent equity and the Consortium 40 per cent.
“The circumstances that led to this Joint Venture Agreement and the terms need reappraisal in view of the fact that as at the time the Agreement was signed, there were no reference records of the Consortium on the basis of which it was selected to manage the proposed Company,” Anenih wrote in the letter to Umar.
Anenih lamented that despite the fact that the approval given by the Minister of Justice for the contract was conditional, officials of the NPA and the Federal Ministry of Transport “decided to engage in selective compliance by amending some parts and ignoring some other parts of the Draft Agreement, particularly those provisions that tend to give absolute control of the finance and management of the Joint Venture Company to the consortium rather than the Board of Directors of the Calabar Channel Management Company Limited.
“The consortium has no reference whatsoever of previous jobs done. They were completely alien to the Calabar channel project and did not even take part in the bids of 2010 and the later procurement process. The consortium was not prequalified and did not pass through the selection process like other companies. It therefore, follows that the Presidential approval for the appointment of the consortium, led by Niger Global Engineering and Technical Company Limited to enter into a joint venture with NPA, which culminated in the agreement to form Calabar Channel, was obtained without following due process,” Anenih said.
It was the fourth controversial attempt at making Calabar River navigable. Three years ago, the Bureau of Public Procurement (BPP) cancelled the entire process following protests over NPA’s attempt to award the contract to itself through the Lagos Channel Management (LCM). But the Public Relations Officer of the company, Mr. Rotimi Oyekan, said the company has the capacity to discharge its responsibility. He said LCM has 14 dredgers and vessels used to remove wrecks including special dredgers that can do the Key Walls.
On controversies surrounding the award of the Calabar Port dredging contracts to his company by NPA, Oyekan said the contract was advertised and LCM bided for it and won the contract. “We have an independent body for the contracts. We bided like others but the advantage we have is that we have been in the system and so, people can see what we are doing. We bided for a lot of contracts which we didn’t win. Even the Calabar dredging contract that is having problems now, we won at the initial stage, but NPA was criticised for awarding the contract to a company in which it had interest and the contract was given to another company. Today, we all know what happened next,” Oyekan said.
Stakeholders call for probe
At a retreat for members of the maritime reporters in Abuja last year, a call went out to government to institute a probe into the Calabar port dredging contract. The forum advised that a fresh contract must not be awarded until an explanation was given on the previous one.
Other stakeholders who spoke with the paper said there is need for the government to probe those that took over N96billion from the government without much to show for it. The feeling of industry operators is that if N96 billion was judiciously invested in dredging the Calabar port, the channel will not remain shallow and difficult for big vessels to approach.
The President, Association of Nigeria Licensed Customs Agents (ANLCA), Prince Olayiwola Shittu said the contractors who took money from the government and failed to do the project to specifications have questions to answer.
“There is nothing bad if the government re-awards the contract. But the previous contractors must be made to tell Nigerians what happened and how the money was spent and on what so that people will not start to see it as avenue to siphoning public funds. Was the contract executed to specifications and if no, NPA and the BPE must tell us what they have done to sanction the companies and if yes, the same NPA must tell us how come the channel is not navigable? Were there some shady dealings? Who are those involved apart from the contractors? Officials of the NPA and the Transport Ministry who handled the contract details must also tell Nigerians what happened and why the huge sum could not improve the depth of the channel and boost the economy of the state and the country,” Shittu said.
Also, the President of Nigerian Indigenous Ship-owners Association (NISA), Chief Isaac Jolapamo acknowledged the effort of the federal government to dredge the ports to attract bigger vessels. He however, urged the government to ensure that the contract is executed so that it would not be seen as a political statement.
Investors groan
Despite the huge amount of money spent on the port, its channel remains shallow, and investors at the port have continued to count their losses. For instance, in 2012, the Commercial Manager of ECM Terminals, a subsidiary of Ecomarine Group, which is the concessionaire in charge of Terminal B of Calabar Port, Ukemeabasi Udoh, said despite the huge investment in new equipments, information technology, human capital development, etc, the operator handled only 384 vessels between 2006 and 2011. He said this is owing to the fact that not many shippers would want to do business in the area.
Beside ECM Terminals, other companies whose business fortunes are being threatened include General Electric, TINAPA Business Resort, and Calabar Free Trade Zone. Others are Intel Services, Cocoa Industries Ltd and many others.
In 2012, Dr Shamsudeen Usman, erstwhile National Planning Minister, accompanied by the policy monitoring committee of the National Council on Privatisation (NCP), visited the Calabar Port and adjoining facilities on a fact-finding mission to assess the challenges confronting concessionaires such as Shorelines Logistics owned by Addax Petroleum, Intel Services and others.
The delegation decried the shallow nature of the port and the negative consequences on businesses in the area. The companies told the Minister that the approach of the Calabar channel is 6.4 metres at high tide and 5.4 metres at low tide whereas the concession agreement stipulated that the federal government would take the draft to 9.5 metres, a promise the Bureau of Public Enterprises (BPE) had confirmed would be achieved on start of business. But several years after, the condition of the draft remained unchanged.
Roles of the Senate and House of Representatives
The House of Representatives had previously directed its Committee on Marine Transport to investigate the contract for the dredging of the Calabar channel and the Port Harcourt port. Members of the committee were given three weeks to submit their findings to the House, but Nigerians are worried that the issues in their findings remained undisclosed till date.
The resolution of the House followed a motion by one of its members, Hon. Kingsley Chinda. The motion was unanimously adopted when it was put to vote by Speaker of the House of Representatives, Hon. Aminu Tambuwal. Titled ‘Failed Contract for Dredging of the Calabar channel and Port Harcourt ports’, the motion gave an insight into the failure of the projects.
In the motion, Chinda alleged that poor quality work was done in respect of the dredging of the Calabar channel in Cross River. The legislator also alleged the non-dredging and scooping of the Port Harcourt wharf.
A maritime lawyer, Mr. Dipo Alaka, who spoke with The Nation, said both the Senate and House of Representatives members have serious role to play in the execution of the new contract awarded by the Federal Government. The upper legislative House, Alaka said, should demand for the terms of the contract and ensure that it is done within the time frame.
Worried by the way the dredging was handled in the past, the National Assembly, it would be recalled, refused to provide funds for dredging of the channel in 2010. NPA had included the project in its 2010 budget and had gone ahead to advertise for the capital and maintenance dredging of the approaches to the port. However, the Senate and House of representatives committee on marine transport expunged it from the budget.
The legislators had complained that NPA always include Calabar channel dredging in its budget yearly. In 2008 and 2009, for instance, the authority received N6billion and N7 billion, respectively but never used it. This is why stakeholders are insisting that legislators should ensure that money budgeted for the dredging of the channel this year is judiciously spent and the job seen to be executed so that fund that ought to be used to battle insecurity and provide jobs for the youth does not go down the drain in the guise of dredging the Calabar channel.
