The Nation Newspaper

Tag: port

  • Are port charges high? Importers: yes; Shippers: no

    Over 65 per cent of the imports into West Africa are consumed in Nigeria. Investigation shows that less than 30 per cent of these imports come in through the seaports, raising questions on why goods destined for the country are diverted to neighbouring countries. Stakeholders blame terminal operators and shipping companies for the problem, which they link to imposition of arbitrary charge. OLUWAKEMI DAUDA reports.

     

     

    Terminal operators and shipping firms operating at the ports are making a kill through what many described as unethical business practice. They milk importers through rates disguised as demurrage and storage charges. The affected importers and clearing agents are seeking the government’s intervention to address the problem.

    Stakeholders told The Nation that the exorbitant charges have led to diversion of cargoes coming to the country to the neighbouring Republic of Benin and Togo. The development, they said, also encourage massive smuggling across the borders.

    Among the contentious issues raised are the length of time it takes to clear goods at the ports, the man-hour lost, or time required to position containers for Customs examination.

    The Managing Director, Bolas Shipping Limited Mr Yemi Ibikunle decried the number of days it takes terminal operators to position containers for Customs examination and called on the government to address the challenge.

    The issue, he said, was strong enough to require the Presidency’s intervention.He appealed to President Goodluck Jonathan and the Minister of Finance, Dr Ngozi Okonjo-Iweala, to solve the problem. He urged the government to take urgent action to achieve the 48-hour cargo clearance policy. Importers, he said, could not continue to be at the mercy of terminal operators.

    “Despite obvious limitations, the Federal Government must strive to infuse competition and transparency in the management of national resources so that optimal value would be earned for the maximum benefits of Nigerians. Ensuring that strategic institutions like the Customs are operational and efficient, is therefore, very essential for the government,” he said.

     

    Factors working against the ports

    There are several factors working against the ports. They include the cumbersome process of goods delivery, congestion and imposition of arbitrary charges on imported goods, among others.

    Most of the goods such as rice, frozen foods, fruits, sweet, milk, cigarretes and other items, such as used vehicles and furniture, are routed through the jungles around Seme and Idi-Iroko borders .

    An importer and maritime lawyer, Rotimi Salako, said shipping lines, terminal operators and off-dock terminals, have jacked up their prices, while demurrage on containers have tripled far beyond what was charged before the concession.

    He said for a 20-foot container, shipping companies charge N5,000 for document release, container cleaning N3,000, shipping line charges N28,000, telex release N5,000, amendment charges, N15,000, as well as five per cent Value Added Tax (VAT) of the total charge.

    He listed other charges to include N580 for the Nigeria Ports Authority (NPA) as Maritime Organisation of West and Central Africa (MOWCA) levy and demurrage on containers that were not returned on time, adding that terminal operators collect N3, 500 delivery charges, N25, 000 terminal handling charges, N400 vehicle entry permit, N2, 500 to position containers for examination, and N1, 500 storage, or rent charge for the first three days and N3, 500 after 24 days.

    For the off-dock terminal, according to him, they collect N20,000 as transfer charge, N2,000 as release and documentation, N5,000 as royalty to terminal operators, N2,500 to position containers for customs examination, N3,500 as labour charges for examination, including N1,250 as terminal delivery charge and N400 for vehicle entry permit. Before the concessioning, the importers said the charges were N1, 204 as wharf age and N1, 294 for documentation and release, terminal delivery order including vehicle entry permit, stressing that importers also pay five per cent VAT of the total charges.

    The NPA also charges N375 as demurrage after three days grace period and N750 for 40-foot, no matter the number of days. Apart from the charges, which importers pay to the shipping lines, terminal operators and bonded terminal operators, they also pay to the Customs seven per cent port levy, five per cent Value Added Tax, Negotiable Duty Credit Certificate, 0.5 per cent ECOWAS Trade Liberalisation Scheme, one per cent Comprehensive Import Supervision Scheme, 20 per cent rice levy and 10 per cent duty, including 10 per cent textile levy as well as 30 per cent surety and other levies.

     

    Nigeria’s port tariff highest

    The country operates one of the highest port tariff structure in the West and Central African sub-region and most of which are imposed by the terminal operators, shipping companies, government and its agencies at the ports.

    Investigation revealed that the cost of shipping and clearing of cargoes at the nation’s seaports is 10 times higher than any other port within the West African sub-region. For example, apart from the statutory charges such as the Import Duty, Fees, Common External Tariff Levy and the Value Added Tax, which are paid into the Federation Account of the government, importers are also made to pay a myriads of charges under different sub-heads, which include the seven per cent Port Levy, 0.5 per cent Economic Community of West African States (ECOWAS) Trade Liberalisation Scheme (ETLS), which is also paid in other jurisdictions within the community, one per cent Comprehensive Import Supervision Scheme, which is the Free On Board value of imports, from which the service providers under the Destination Inspection Scheme are paid and the Rice levy.

    Others include, the Cigarette Levy, National Automotive Council Levy, Port Development Levy, Sugar Levy, Port Surcharge and sundry charges paid to the government before the imported consignment would be allowed to leave the port. In addition to these, government agencies that take part in cargo inspection such as the Customs, NPA, Standards Organisation of Nigeria (SON) and National Agency for Food, Drug Administration and Control, among others impose one levy or the other.

     

    Double taxation

    Findings also show that before an imported vehicle or container is allowed to exit the gate of any Lagos ports, for instance, importers or their clearing agents pay between N10,000 and N40,000 to security officials.

    These charges, stakeholders said, have made the seaports unattractive and uncompetitive for business in the sub-region.

    The President of the National Association of Government Approved Freight Forwarders, Mr Eugene Nweke, said whatever the government generates through the Cigarette Levy, National Automotive Council Levy, Port Development Levy, Sugar Levy, Port Surcharge that it loses more as a result of cargo diversion.He decried the payment of VAT on imported goods, adding that it is double taxation. He argued that most of these imported goods are subjected to another round of VAT collection at the final sales point, noting that this is double taxation.

    “The government should determine at what point an importer or freight forwarder should pay VAT on a consignment so that he goes ahead and pays and obtains an official receipt, which he would use for the entire clearing process for the consignment,” he said.

    President of Council of Managing Directors of Licensed Customs Agents (CMDLCA), Mr Lucky Amiwero and other stakeholders, said the multiple tariffs collected by government agencies have become an albatross in the Federal Government’s drive to make Nigeria the maritime hub in the West Africa sub-region.

    He warned that the country might lose substantial volume of West African cargo traffic, which she controls, a development that will portend danger for her economy.

    “The government is aware that Ghana and Cote’d Ivoire are building millennium port facilities that would berth mega ships of over 10, 000 TEUs of cargo capacity.

    “Very soon, Nigerian importers may have to use smaller ships to take their cargo from these two seaports if measures were not taken to address these inadequacies now,” he warned.

    According to him, importers and clearing agents have over the years cried out to no avail and many of them have resigned to fate while many others have decided to bring in their consignments through neighbouring African seaports.

    The National President, Association of Nigerian Licensed Customs Agents (ANALCA), Alhaji Olayiwola Shittu said the greatest challenges facing maritime transport are multiple taxation and unnecessary charges by terminal operators, shipping companies and service providers which are not commensurate with the services rendered by them. Importers and clearing agents, the ANLCA chief said, pay huge amount at different points in the ports before their goods are cleared. The shipping companies, Shittu said, also force agents and importers to pay deposit for containers loaded by trucks.

    He alleged that in most cases the terminal operators look for excuses so that the money would not be refunded after the agents have returned the containers.

    Shittu said: ”Normally, the tax on imported goods is five per cent, but an importer would be wasting his time to think that is the only tax to be paid. There are several other government charges that make the tax to go up to as high as 15 per cent. For example, after paying the five per cent, you will still have to pay a sub-charge, which is seven per cent; this is called development charge.

    “The service provider put in place to ensure that proper documentations are made to meet some certain standards, are paid one per cent.

    ”The increase in the money for clearing goods in the ports will continue to escalate as long as terminal operators are charging whatever they want, and as long as the security agents are there to extort money. If your goods are put on a wooden panel for off-loading or up-holding, plank guarantors will tell you that that particular goods abroad was not registered. So, the owner should pay a particular amount in their office or find something for ‘the boys’.”

     

    Parity with other ports

    Importers said the review would eliminate arbitrariness and ensure parity with other ports, particularly those of neighbouring countries.

    Speaking on behalf of other importers in Lagos last week, the Managing Director, Sea Investment Mr Richard Ogoegbunam said port tariff must be competitive and be commensurate with services rendered by the terminal operators. To reduce the cost of doing business in the ports, he said the Shippers’ Council had abolished service charges, bank charge, commission on turnover and concessionaires service charge.

    Ogoegbunam praised the council for abolishing port administrative and sorting charges. He said the council had been implementing the Inland Container Depots (ICDs) project on Build, Own, Operate and Transfer (BOOT) basis to bring shipping services to the door steps of shippers.

    He said the ICDs would also assist in decongesting the seaports and make them more user-friendly. He criticised Customs bureaucracy at the ports, saying the bureaucracy they imposed by Customs on containers and Roll on/Roll off (RORO) vessels by customs procedures were a challenge to ports operations.

     

    Shippers’ Council to probe ‘exploitation’

    TheNigeria Shippers’ Council (NSC) has pledged to investigate complaints of alleged exploitation against ports terminal operators by clearing agents, importers and other stakeholders.

    Established in 1978, NSC is empowered with protecting the interest of shippers.

    According to NSC, complaints against private terminal operators increased from 63 in 2011 to 117 last year. A senior NSC official who spoke on condition of anonymity said most of the complaints were on excessive storage and demurrage charges by terminal operators and shipping lines.

    Other complaints, according to the official, include refund of container deposit, “slow and lacklustre handling of claims, including deliberate attempt to unjustly limit liability by shipping agents and terminal operators despite acceptability of the liability.”

    The source, while admitting that the Council lacks the power to sanction, urged aggrieved the public “to come forward with relevant evidence while making their complaints”.

    Speaking at a forum, an official of the Council, Mrs. Celine Amaka Ifeore, blamed terminal operators, shipping firms and other service providers for the high charges and the delay in the clearing.

    According to the NSC, there were six charges at the port before the concession, adding that under the new arrangement, they have increased 20.

    Lamenting the increase increased charges collected by the operators, Ifeore identified storage/rent fee as the most exploitative.

    “The Minister of Transport in 2002 approved N4,000 as progressive storage charge, but the terminal operators arbitrary increased it to N8,000 and then N12,000 without approval from government,” she added.

  • We can’t ‘port’, subscribers lament

    Subscribers are finding it difficult to move to networks of their choice under the Mobile Number Portability (MNP) introduced three months ago by the Nigerian Communications Commission (NCC).

    They alleged that some ‘big’ telecoms operators are frustrating them from porting to networks where they could get better services.

    They said the donor operators were disallowing them of porting after several futile attempts to do so.

    A subscriber, who identified himself simply as Tolu, said he had made several attempts to ‘port’, lamenting that he was always told to hold on.

    “I have been to the office of my recipient-operator several times to fill the form and get the porting process kick-started, but it has always been frustrated as the donor-operator who is one of the big players in the industry will not let me go. My grouse with the operator is that each time I load my phone, my ‘credit’ gets wiped off without making any calls. The worst is the freebies they give. When I loaded my phone on Saturday, I was given a ‘credit’ twice the amount I loaded. I did not use one-tenth of all the ‘credit’ only to wake up the following day with empty credit,” he said.

    Chief Operating Officer, Interconnect Clearing House Nigeria Limited, Uche Onwudiwe, said while he could not comment on MNP’s success, he could not rule out the possibility of donor operators refusing to release subscribers wishing to opt out of their networks.

    Interconnect Clearing House is the link between the subscriber, the donor operator and recipeint-operator. It reports to the NCC.

    Onwudiwe said if any subscriber has difficulty in ‘porting’, he should contact the NCC via a short message service (SMS) and do a follow-up.

    “The donor-operator may want to frustrate people from leaving their network. If this happens, the appropriate thing to do is to complain to the NCC. The NCC is looking at putting in place sanctions to deter any operator from stopping people on its network from porting,” he said.

    According to him, the recipient network could also contact the interconnect clearing house so to assist in doing the follow-up on the issue with the regulator.

    Calls made to the Director, Public Affairs, NCC, Tony Ojobo, were not picked.

    NCC Executive Vice Chairman Dr Eugene Juwah, promised to sanction any defaulting operator.

    According to him, MNP has been identified as one service that would further deepen the competition in the telecoms market, adding that with the growing reliance and dependence on mobile communications for everyday socio-economic interactions, the scheme will give freedom to subscribers.

    “The vision of the commission is not only to provide access to telecommunication services to Nigerians at affordable cost but to also to continue to provide the required stimulus and appropriate environment for the introduction of innovative services that will impact on quality telecoms service delivery.

    “Our mobile subscriber numbers have become our identity and in most cases, we are required to provide our mobile (telephone) numbers while filling out forms in opening bank accounts, making hotel and airline bookings,” Juwah said during the launch of the MNP scheme in Lagos on April 22.

  • Badagry deep port

    Badagry deep port

    • This is good, but there are other issues to be considered before giving a final nod to it 

     

    The report that the Federal Government, in conjunction with the Lagos State Government, plans to develop a deep seaport in Badagry, Lagos State, is cheering news. To push the quest, the Federal Government is reported to have inaugurated an eight-man Steering and Project Development Committee for the Badagry Deep Seaport in Lagos, with members drawn from the Federal Ministry of Transport, Lagos State Government, Nigerian Ports Authority (NPA) and the Infrastructure Concession Regulatory Commission (ICRC).

    As the transport minister, Senator Idris Umar noted, “the maritime sector of Nigeria, with 84,000 square nautical miles, is central to the nation’s economic development as a medium of transportation, for global commerce, resource exploitation and recreation”. With the combined handling capacity of the six ports at Apapa, Tin-Can, Onne, Port-Harcourt, Calabar and Warri at 60million metric tonnes out of the over 100million metric tonnes cargo coming into the country annually, it seems about time the Federal Government took steps to bridge the huge shortfall.

    Of course a new seaport in Lagos means additional jobs as well as related support services will be created. This is good for Lagos. As a matter of fact, many people will argue that anything that would take our teeming unemployed youths from the unemployment queues is welcome.

    We also appreciate the government’s intention in proposing the Badagry port; for instance the need to accommodate high volume of cargo generated through international maritime trade and to enable the country attain status of a maritime hub for West and Central Africa. The port will also accommodate dry docking facilities for super tanker vessels which would offer low-cost access to both offshore oil/gas fields.

    These are laudable intentions. But then, we have to consider the other side of the coin. With only the Apapa and Tin Can ports in Lagos, Lagosians know what their experiences are, especially on the Apapa-Oshodi Expressway, as a result of the activities at the ports. The road is ever busy, with all manner of articulated vehicles either going into the ports to load, or coming from there with different kinds of cargoes. Because of heavy vehicular traffic, the road is overstretched, making it require being fixed almost all the time. We cannot count the number of accidents that the articulated vehicles plying the road have caused.

    If there are alternative means of transporting the cargoes from the ports, perhaps the situation would have been different. There is no functional railway to take the heat off the road; even the road from Sokoto to Apapa that was conceived about 20 years ago has been abandoned. We do not know why, but if experience is anything to go by, then it is even possible that the government has forgotten that such an abandoned project exists. At any rate, even if we need a new port, won’t it further suffocate Lagos, giving the experience with the ports in the state?

    What we are saying in essence is that the committee set up for the Badagry port may have some balancing act to perform. It should look at all the possibilities with a view to coming up with recommendations that would be truly beneficial to the state and the country at large. We count on the experience and expertise of its members and hope that they would come up with the best decision that will reduce to the barest minimum, if not completely eliminate, most of the hiccups presently encountered by stakeholders making use of the existing ports in the country.

     

  • Govt amortises Onne Port

    • Firm to invest $370m 

    The Onne Port in Rivers State has been amortised by the Federal Government to ensure its optimal use.

    Information Minister Mr Labaran Maku said President Goodluck Jonathan gave the Nigerian Ports Authority (NPA) the nod to amortise the port to Intels Nigeria Limited.

    Maku spoke during a visit to the Federal Ocean Terminal (FOT), Onne, Port Harcourt, the Rivers State capital.

    He said as part of the agreement, Intels would invest $370,481,720 in the terminal and the development of the maritime hub and gas activities to international standard.

    Intels, the minister added, is expected to complete work in 40 months and use the terminal for 20 years to recoup its investment.

    The deal, Maku said, involves the execution of 11 strategic projects to improve port operations, security and infrastructural development to international standard.

    Presidency sources, told The Nation that Intels would reclaim 900,000 metres of swamp land with 11 million cubic metres of sand to facilitate the use of the terminal.

    The President, sources said, also directed that a 750-metre quay wall be constructed to expand berths 9, 10, and 11.

    “The quay apron is an L shaped jetty construction along the Bonny River, closed quays with 1.1 meter thick concrete diaphragm wall to a depth of 26 metre in front, and anchor concrete wall at the back. The design entails the driving of 9000 cement/sand vibrio piles to consolidate the area while the concrete deck is 250-metre thick on compacted soil,” the source said.

    Intels, The Nation gathered, has been directed to work on a comprehensive treated water supply scheme that would serve the berths in the terminal.

    The supply includes the distribution network and hydrants for fire/industrial water supply with four boreholes connected to the automated treatment plant.

    The company is also expected to provide steady power supply to the terminal with high capacity generator, two transformers and six substations to illuminate the port and the port access roads to boost security.

    “The roads are to be illuminated to enhance security. This would facilitate the 24-hour operation at the port. Intel is expected to provide 35 high security lightning poles at 120 metre centres. 4.5 internal road networks is to be constructed along the swamp areas. The road pavement is of 54,000 metres to cover a compacted stone base.

    “Intels will also erect a 3.6 kilometre chain link wire mesh to demarcate the industrial area from the quay apron at FOT and FLT, including nine automated controlled gates with security house at strategic location to reduce access to the quay area. The company will also see to the construction of a new trailer park with reinforced concrete pavement to accommodate about 200 trailers daily,” the source said.

     

  • Fire, multiple explosion rock Tin Can Port

    Fire, multiple explosion rock Tin Can Port

    The Tin-Can Island Port was on fire Wednesday following the multiple explosions that rocked the petroleum company MRS Oil located inside the Lagos port.

    The incident, according to an eye witness account, stated around 11.15 a m.

    Not less than four people were confirmed by the representative of the National Emergency Management Agency (NEMA) at the scene,  Mr Ibrahim Farida to have died in the inferno.

    The Director shipping and Trade of the tank firm, Mr Marcos Storari however denied the alleged death report insisting that “there was no casualty recorded by our company.”

    Satori said Nigerian Ports Authority officials and other security agencies staff at the port had visited the scene. He however prevented reporters at the scene from entering their premises as he ordered the gate to be locked.

    Investigation, he said, was on to determine the cause of the fire.

    Security sources who witnessed the blast at the port however, told The Nation that so many people were injured and that the fire caused serious damage to the company because it took almost two hours for fire fighters to arrive the scene.

    “The fire started slowly from a tanker barge (ship) that was on its way to snake Island in Apapa and was followed by multiple explosions which resulted into chaos and people started running for their lives this morning (yesterday).

    “To tell you the gravity of the explosion, many people abandoned their vehicles on the port access road and ran for their lives after the second explosion,” the security officer said.

     

     

  • NPA to revive Delta port

    The Nigerian Ports Authority (NPA) plans to revive the Koko Port in Delta State, its Managing Director Mr Omar Suleiman has said.

    He told The Nation in his office that NPA is collaborating with the Nigerian National Petroleum Corporation (NNPC) and other investors to turn Delta port round.

    NPA, he said, is committed to making the ports the preferred destination for cargoes for West and Central Africa by providing the required infrastructure for their operations.

    He said the dredging of the Escravos channel, which leads to Warri Port, was included in this year’s budget, adding that when approved, it would attract merchant ships into the Delta Port.

    “We are going to do everything possible to revitilise the Delta Port. It is one of our priorities and we are determined to achieve it by spending part of our budget for this year on it,” Suleiman said.