…Describes act as a slap on stakeholders
The National Association of Government Approved Freight Forwarders (NAGAFF) has faulted the alleged renewal of the port concession agreement for the twenty-one (21) terminal operators operating at the nation’s seaport by the Nigerian Ports Authority (NPA) describing it as a slap on stakeholders.
The National President of NAGAFF, Chief Increase Uche who faulted the development in an interview with Primetime Reporters in Lagos recently wondered why NPA management would choose to make such a critical document a secret from those that should know and make input for a workable and practical concession agreement.
Uche said, “Last two weeks, we learnt that the whole 21 concessionaires, their agreements have been renewed for another term which is yet to be made open and having done that, to us in the industry; it is a very big slap because no one agency in the industry was consulted, they didn’t consult any stakeholder to do that.”
He recalled that at the inception of the port concession, when the former Managing Director of NPA, Chief Adebayo Sarumi was appointed by the then President of Nigeria, Olusegun Obasanjo to midwife the port concession agreement, stakeholders raised some issues concerning how the concession agreement was handled at that time noting that under three years, the concession was done while in other climes, it takes them a number of years to achieve.
“But in our own here, we discovered a lot of mistakes that were done. First was that there was no economic regulator which NAGAFF particularly was emphasizing on that there must be a regulator. NPA is the landlord; they are also the technical regulator which means that they manage issues that have to do with marine operation, navigation and all that. Now, on the commercial aspect, which is very important because the target for concessioning the port was one; to make the port competitive.
“Under this circumstance now, in renewing this concession now, have we achieved that? That is what we should be looking at. Is the port now competitive or have you assessed and know the level at which the port is operating? Have you also assessed the port to know whether the concessionaires have been so friendly because user friendliness is part of the objectives we are trying to achieve in concessioning the port? Again was to ensure that there is reduction in the cost of doing business at the port. Before 2005, we know what it was, they tried to put modality in place that during this contract financing, the port will be run on Build, Own, Operate and Transfer (BOOT) and certain area was allocated to the concessionaires.
“All this while, we have been following events, they allowed this issue of lack of economic regulator to last for more than ten years before Shippers’ Council was appointed to be the economic regulator. But before then, things have gotten from bad to worse. Then, they (Shippers’ Council) started managing the situation, at a stage, they (STOAN and SAN) took these people to court; they (Shippers’ Council) won from High Court to Appeal Court and thereafter, we were meant to understand that they were trying to settle the issue out of court”, he said.
He continued, “Not that the concession actually failed the federal government woefully, government tried to make some recovery through economic benefit, that is by issuing GMT – Guaranteed Minimum Tonnage for every concessionaire in the port, meaning that there is an amount of cargo you must bring in annually for government to meet its annual target. But that has been the trick used by the federal government in order to exonerate themselves from the consequences of cargo fluctuation, maybe the cargo volume that is expected to come to a particular port, there could be reason why the thing could drop or it will increase. So, they normally hold down the concessionaires by issuing Guaranteed Minimum Tonnage for every terminal operator. That is what has actually helped government that as it stands today that these terminal operators are now forced to ensure that cargo throughput gets to that Guaranteed Minimum Tonnage but it has not helped our port operation because the terminal operators in trying to achieve this have been overburdened in their capacity that cargo coming in now can no longer be controlled or managed, the inventory control now has been a problem.
“So, now that we have the opportunity to review this agreement, for the past three years, we have been following NPA, asking them to allow us come in and make our own input from our informed knowledge as freight forwarders, it was not listened to. Other relevant government agencies that should be part of the review of this concession agreement, so that they can make their own input, where we need correction, let it be corrected so that it will fast track the port development. But I don’t really understand what is wrong with NPA that they will not listen to the voice of reason. What are they rushing for that they will not bring other relevant government agencies to be part of this review?”
The NAGAFF Chief observed that today, the Bureau of Public Enterprise (BPE) and the Infrastructure Concession and Regulatory Commission (ICRC) had not been operating in the port saying “they cannot tell you what their experiences have been during this period which is very critical” even as he submitted that “the terminal operators are here now, the freight forwarders that interface with them and bring other players together in the course of cargo movement, we are supposed to be at the epicenter in making recommendations that will lead to the renewal of these contracts because one thing is certain, that all of us are in the industry.”
“And then issue of shipping waiting time, we know how it has been. There has not been any considerable improvement; we have discovered that the turnaround time of vessels has been an issue of controversy. We have been using propaganda to deceive the general public and to deceive the government but of recent, when the ports in Lagos became terribly congested that some vessels needed to be diverted to the eastern ports showed clearly that what has been creating the gridlock has been the state of the port, the port operation that is going on inside the port which is what is spilling over on our port access roads.
“So, what we are saying at this very stage is that if government needs to correct the anomalies in the port, we are not saying that they shouldn’t reconsider the concessionaires but there must be a transparency in renewing that. Let the port stakeholders come together, even the concession proposal should be shared to us, let us make our inputs and return them back to government to take its final decision. Shippers’ Council too plays a major role in port concession agreement as it stands today because they are the economic regulator and every other thing boils down to port cost which has been a very big issue.
“Today, Shippers’ Council obtained a researched data on comparative cost analysis of what Lagos port here is like compared with other ports in the region, and we discovered that Lagos port, in fact, ports in Nigeria here have higher local shipping charge compared with other ports in the region. If our local shipping charge is higher than that of our regional neighbours, that must have been the reason why our market share keep reducing that cargo coming into our ports here keep reducing while cargo still land in other ports and still find their way into Nigeria.
“These are some of the areas we need to look at in trying to renew this concession agreement. Make the port to be competitive, bring in modern handling equipment in place and deploy technology that will enable the port to work very efficiently because efficiency matters in every cargo movement”, he further said.
Photo: National President of NAGAFF, Chief Increase Uche.
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