Appraising the gains of port reform

29 March 2015, Lagos – Stakeholders in the ports industry at a monitoring and compliance forum identified achievements and challenges of the reform exercise in the sector, writes Francis Ugwoke

Apapa portThe ports industry stakeholders recently gathered in Lagos   where the performance of the sector was reviewed beginning from 2006 take-off period to date.  The near failure of the system under the Nigerian Ports Authority (NPA) as both terminal operator and landlord necessitated the reform. The reform came up at a time when government realized it was not good enough in business and decided to engage the private sector under a concession programme.

The scenario was that the infrastructure, including important cargo handling equipment, among others, were in a state of dilapidation. Engaging the private sector was therefore the only option left for the government. Incidentally, this  was the practice in most parts of the world.  And with the success recorded in the telecoms sector where the private sector participation led to tremendous improvement in Nigeria’s teledensity, the option of concessioning the ports to private operators was a welcome development.

At the   port compliance conference organised by the Nigerian Ports Authority (NPA), it was all kudos and  at the same time knocks.  While appreciating the gains of the reform and indeed the contributions of the concessionaires in the past eight years,  the belief is that more still needs to be done in the ports. The service providers  were  therefore tasked on the need for more action.

Transport Minister, Senator Idris Umar,   applauded the reform programme, saying it has  brought tremendous benefits to the nation’s  economy. Executive Secretary, Nigerian  Shippers’ Council (NSC) Mr  Hassan Bello who represented the minister pointed out  the infrastructure decay before the reform and the  improvement  that had taken place so far, among others.  Umar said  “Prior to concessioning of the ports in 2006, our ports were characterised by high cost, low efficiency, obsolete equipment, leakages and high level of centralisation. But, since concessioning, there has been an increase in both local and foreign investments, in infrastructure and cargo handling equipment which has enhanced cargo throughput”. One of the gains  of the  reform could also be noticed in the increase in volume of trade from 82 million tons of cargo in 2008 to 93.7 million tons in 2009 and 100 million tons in 2012 with container volume of 1.4 million TEUs in 2011; 1.6 million TEUs in 2012 and 1.7million TEUs in 2013 respectively. He was also reported to have equally noted that the average turnaround time of vessels has also decreased significantly following the reform.

Managing Director of the Nigerian Ports Authority (NPA), Mallam Habib Abdullahi,  who spoke during the occasion also said that the reform has been of tremendous gain to the industry. Abdullahi while commending the terminal operators said the reform gave a new lease of life to Nigerian ports. According to him, NPA was a direct beneficiary in the partnership with the concesssionaires. “The port concession arrangements revised roles and allocated different obligations to both NPA and the concessionaries. Obligations were allocated based on what each party can do best. These issues relating to regulations, security, infrastructure, access, marine service and channel management were allocated to NPA”, he said. Chairman, Senate Committee on Privatisation, Mr. Olugbenga Obadara,  who was at the event also commended the terminal operators. He also expressed sympathy for the  terminal operators for  incurring losses as a result of the drop in import volume and depreciation of the value of Naira. He said,  “I know how much the economy has affected your business especially the dollar rate.” He however  charged NPA to ensure continuous dredging of the channels to accommodate large vessels.
Monitoring Compliance
During conference, it was not all about praise singing as  the Transport Minister challenged the  NPA on monitoring and compliance.  According to him,  the authority needs  to do more  work  in monitoring compliance with the ports concession agreement.   Umar directed the management of NPA to furnish him with current compliance status by the operators.  He said during the occasion, “I urge you to take advantage of this forum aimed at ensuring compliance with the terms of the port concession agreement to deliberate on the gains and challenges of concession, share ideas as well as brainstorm on the way forward in order to further develop the industry to stimulate economic growth.”

Achievements and Challenges

During the event, terminal operators were on hand to  review  the performance of the nation’s ports since the reform programme,   identifying achievements and challenges in the past eight years. Chairman of Seaport Terminal Operators Association of Nigeria, Prince Dr. Vicky Hasstrup,  pointed out the rehabilitation and reconstruction of quay aprons and stacking areas, expansion and reconstruction of container terminals, rehabilitation of terminal access roads, sheds/warehouses, among others,  as part of the  gains  since the reform exercise eight years ago. Hasstrup  said that the terminal operators  had  acquired  modern state of the art forklifts, container handlers for cellular trade demand, including gantry cranes, reach stackers, handlers mafi-tugs to be able to carry out its container handling operations to be able to do  their job in the past eight years.

On dock labour, she said part of the reform measures introduced include stream-lining of stevedoring companies, establishment of an acceptable manning scale to ensure high productivity, application of direct interview selection and employment of dock labours with joint effort of stevedoring contractors under the supervision of NIMASA, elimination of zoning and permanent berth ownership by dock labours, among others.  Haastrup who is the Chairman of ENL Consortium said that following these strategies, there have been continuous ship discharge/loading operation within the working time without erratic stoppage of ship operations.

She said, “Strict monitoring of allocated labour to achieve projected productivity; achievement of high level of discipline and control of extortion; eradication of pilferages and reduction of damages to cargoes and properties as a result of effective safety and security management; improved turn-around time of vessels, consequently, increased productivity.”  She also said that under-declaration of cargoes has been eliminated, adding that this has led to more revenue generation for the government. However, Haastrup added that much as the NPA and the Customs Service had been contributing to marine industrial development and were well appreciated, there have been challenges in the system.

She identified the challenges as inadequate provision of pilotage facilities which according to her has reduced berth occupancy/utility rate. She also identified irregular sweeping of the habour bed, adding that this was reducing draft and endangering vessels berthing.  She identified other challenges as “Insecurity of vessels at the anchorage and water front of the harbours; Customs delay on ship pratique on arrival; inconsistent cargo release processes in the terminal and delays associated therein even when goods have been duly released and cleared in line with the ASYCUDA++ concept; aged vessels with archaic handling facilities calling at the terminals; Inadequate transport network and road traffic congestion; delays attributed to importers and freight forwarders in the evacuation and delivery of cargoes due to inadequate warehousing logistics and problems associated with finance; Incessant removal of management in the maritime industry based on political patronage rather than professional considerations thereby hindering policy implementation continuity, in line with international best practice; reluctance on the part of few concessionaires to fulfil their statutory obligations, including development plans”.

She also identified diversion of vessels from other terminals and ports to a particular terminal/port, a situation which according to her has    created monopolistic environment. Other issues according to her  were the  inability of the supervising agencies in creating enabling environment for efficient port operations-creating monopolistic environment; host community restiveness and shanty villages within the ports environment;   arrest of vessels at berth and attendant consequences; poor power generating system; intermittent ASYCUDA++ connectivity failure and  frictions among maritime statutory agencies due to overlapping functions.


– This Day

About the Author