In 2006, the Federal Government concessioned the ports to improve their performance and efficiency. Have things changed since then? To stakeholders, the Nigerian Ports Authority (NPA) management has stopped paying lip service to its vision of making the ports Africa’s hub. Maritime Correspondent OLUWAKEMI DAUDA reports.
Before their 2006 concession, the ports were inefficient, resulting in long turnaround time for ships and increased container dwell time.
In today’s global commerce, seaports play important roles. They are major gateways for international trade and instrument for measuring nations’economic health.
A top Nigerian Ports Authority (NPA) official said: “The ports have considerable influence on the volume and conditions of trade as well as the capacity for economic development of nations still developing.
“In our country, greater percentage of international trade is routed through the sea, and given our huge population, it is believed that our economy accounts for over 70 per cent of all seaborne trade in the West African sub-region. Hence, the country’s ports are increasingly challenged to meet the pressure mounted from movement of ships and cargo in and out of the ports.
“The Federal Government embarked on the concession of the ports basically to solve the protracted problems of inefficiency, corruption, mismanagement and huge debts that characterised the ports, then.
“The rationale behind the concession includes the $34 million indebtedness of the NPA, the redundancy of 24 out of 83 managers as well as its poor management structure. Emphatically, concession of the ports refers to lease of port terminals and re-organisation of stevedoring companies. About 110 applications were received in December 2003 and out of 94 pre-qualified concessionaires, only 20 were granted to operate seaport terminals for 10 to 25 years.”
Why ports were concessioned
The Federal Government took the decision to concession the ports to address the problems of inefficiency, corruption, mismanagement, and huge debts.
The rationale behind the concession included the $34 million indebtedness of the NPA, the alleged redundancy of 24 out of 83 top managers of the agency, as well as its poor management structure. Apart from that, the following factors were also responsible for the concession:
- Turnaround time for ships was too long and usually calculated in weeks, sometimes months, depending on the cargo being loaded or discharged;
- Cargo-handling plants and equipment owned by the NPA were few and mostly unserviceable, leading to shipping companies hiring these machines from private sector sources after having paid NPA;
- Dwell time for goods in ports was prolonged due to poor port management and that led to port congestion;
- Corruption soared high among labour contractors and various service providers at the port;
- Nigerian seaports were rated as some of the costliest in the world, as a result of the compounded problems;
- Many port premises and quay aprons had fallen to disuse and failed road sections inside the ports made movement of goods within port grounds cumbersome and very slow;
- Following the seaport congestion, complaints of untraceable or missing cargoes were being regularly lodged against the NPA, all to no avail and
- Security inside Nigerian seaports was compromised by the activities of miscreants as theft and pilferage became the order of the day.
In December 2003, NPA sources said about 110 applications were received and out of 94 pre-qualified concessionaires, only 20 were granted approval to operate the terminals for between 10 to 25 years.
NPA, stakeholders said, is spearheading a new cause of making Nigeria the hub of international trade in West Africa. Experts also said this is a bold step in the right direction, as Nigeria is home to Africa’s biggest oil market and situated strategically in the Gulf of Guinea.
To keep to its promise of boosting efficiency, the management of the NPA acquired about six 60-tonne buller- pull tug boats with state-of-the-art, computerised engines, to meet the increasing demands of critical stakeholders, within the Lagos Pilotage District.
Its Managing Director, Mallam Habib Abdullahi acquired the tug boats, one of them christened UROMI had twin fire fighting pumps, with a reach of above 300 meters and the flow is over 600 cubic meters per hour of water and foam, making it the strongest equipment in its category in the country.
Revenue profile
What has changed at the ports since their concession in 2006? A lot, says a senior official of the Federal Ministry of Finance.
The NPA management, the official said, has been running the ports efficiently.
The NPA, the official said, generated $140 million in 2005 before the concession and over $450 million from the Lagos Ports in 2014.
The official told The Nation that the government has been earning more income since the concession.
The government, he said, concessioned the ports to generate more revenue and allow for greater flexibility, efficiency and better services to importers and other port users by resolving some of the major challenges confronting ports operations.
The turnaround time in 2005, at the Lagos Port Complex and Tin-Can Port, he said, was 10.0; while vessel waiting time was 3.0.
In 2014, the official pointed out that the turnaround and vessel waiting time had reduced to 4.0 and 1.3.
Gains of concession
The cost of port services is competitive, turnaround time has improved, percentage of berth occupancy rate improved and infrastructure have improved significantly. Also, the security around the seaports has improved.
The official, however, lamented the poor access roads to the Lagos ports, urging President Muhammadu Buhari and the Minister of Transport to address the perennial gridlock in Apapa.
A senior official of the NPA, who also craved anonymity told The Nation, that the management was working to ensure that the ports become “the leader in Africa, to deliver efficient port service in a safe, secure and customer-friendly environment. Our core value includes efficiency, safety, security, customer friendly and new innovations.”
Nigerians, according to him, have forgotten that before the concession, the “turnaround time for ship was too long and usually calculated in weeks, sometimes months, depending on the cargo being loaded or discharged. Cargo-handling plants and equipment owned by the NPA were few and mostly unserviceable, leading to shipping companies hiring these machines from private sector sources after having paid for it’’.
Dwell time for goods in ports, he said, was prolonged due to poor port management. “There was congestion in the port; corruption was high among contractors and various service providers at the port; the ports were rated as one of the costliest seaports in the world, as a result of the compounded problems.
“Many port premises and quay aprons had fallen to disuse and failed road sections inside the ports made movement of goods within port grounds cumbersome and very slow. As a result of the congestion, complaints of untraceable or missing cargoes were being regularly leveled against the NPA,” he said, adding that the security inside the ports was said to have been compromised by the activities of camp-boys, wharf-rats and other miscreants operating inside the ports.
The Association of Nigerian Licensed Customs Agents (ANLCA) President, Prince Olayiwola Shittu, said with the huge equipment at the ports and the introduction of standard in the type of vehicles that can enter the ports, “the NPA has brought efficiency to the ports. The management of the NPA led by Mallam Habib Abdullahi is leaving no stone unturned since assuming office.
Simplifying trade process
One way the management of the NPA is easing the importation and exportation processes for business environment is the strategic adoption and institution of electronic transactions.
The authority has introduced an online payment platform called the Electronic Ship Entry Notice better known as “e-SEN” for shipping lines and agents to ease business transactions and help reduce ship dwell time.
At the launch of the e-SEN, Abdullahi said the online payment platform has cut off unnecessary delay associated with ship arrivals and their dwell time at the ports, as well as ensure a quicker cargo clearance system.
He noted that the digitalisation of the financial aspects of the operations of the authority had brought about a 15.4 per cent increase in cargo throughput.
“Before e-SEN, it was done manually, filled with challenges associated with delay in verification of data and a lot of inconveniences leading to loss of man-hour in business,” Abdullahi said.
Shipping companies in Nigeria have also described the e-SEN as a major step by the management of the NPA in checking corrupt tendencies at the seaports.
The electronic devise replaces the obsolete manual system which is said to be corruption-laden.
“With this innovation, you save a lot of money and time, while eliminating corruption at the same time,” said Mr Val Usifor, chairman of the Shipping Association of Nigeria, who also described the digital move by NPA as “a quantum leap” in the management’s efforts to increase efficiency in service delivery and fight corruption in the ports’ system.
Experts also said the e-SEN has led to the biggest vessel that ever called at any West African port, Maersk Line’s WAFMAX vessel, arrive the Onne Port with a tonnage of 4,500 20ft equivalent units (TEUs) container.
“This is going to make transportation of goods more economically viable. Before now, there were 2,500 containers on one ship, but there will be 4,500 TEUs,’ Managing Director, Maersk Line Nigeria Limited and head of the company’s Central and West Africa Cluster, Mr Jan Thorhauge, said after the berthing of WAFMAX at Onne.
“It will now be much more cost efficient. In practice, it would mean that Nigerian export products would become more competitive. China is a very big sourcing area for Nigeria as almost 50 per cent of all containerised imports into Nigeria come from China. So, this is a direct link between China and Nigeria. It goes first to Lagos and then to Onne,” Thorhauge said.
