‘Concession Has Raised Ports Revenue’ | Independent Newspapers Limited
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‘Concession Has Raised Ports Revenue’

Posted: Apr 6, 2016 at 3:00 am   /   by   /   comments (0)

What has changed at the ports since their concession in 2006? A lot, says a senior official of the Federal Ministry of Finance (FMoF).

The Nigerian Ports Authority (NPA) management, the official said, has been running the ports efficiently.

NPA, the official said, generated $140 million in 2005 before the concession and over $450 million from the Lagos Ports in 2014.

The official said, 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; vessel waiting time was 3.0.

In 2014, the official pointed out that the turnaround time and vessel waiting time had reduced to 4.0 and 1.3.

“Concession is a process whereby the concession grantor gives the right to operate a facility and/or deliver a service of public interest to a merchant concessionaire, against the commitment assumed by the concessionaire to build and manage the subject of the concession or to manage the delivery of service at the concessionaire’s own risk,” the official said.

Before the 2006 concession, the official said, the ports demonstrated very low levels of efficiency, which resulted in long turnaround times for ships and increased container dwell time.

In today’s global commerce, he said, seaports play an important role of being many nations’ major gateway for international trade and are a good instrument for measuring the economic health of a nation.

“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,” the official said.

Since the concession was done, the official said that the cost of port services has become competitive; the turnaround time has improved; the percentage of berth occupancy rate has improved; the infrastructural facilities have improved significantly, while the security around the seaports has also improved.

The official, however, lamented the poor access roads to the Lagos ports and urged President Muhammadu Buhari and the Minister of Transport to address the perennial gridlock in Apapa.

NPA’s General Manager Western Ports, Chief Michael Kayode Ajayi, said the current management is working to ensure that the ports become “the leading Port 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.”

Ajayi said Nigerians have forgotten that before the concession, the “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 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; following the seaport congestion, complaints of untraceable or missing cargoes were being regularly leveled against the NPA,” Ajayi 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.

President of the Association of Nigerian Licensed Customs Agents (ANLCA), Prince Olayiwola Shittu, said that the NPA has brought efficiency to the ports based on the huge equipment at the ports and the introduction of standard in the type of vehicles that can enter the ports.