Port Concessioning At 10: Nigerian Ports Still Not Competitive

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Prior to port concessioning, the Nigerian Ports were inefficient, corruption ridden, mismanaged, and wriggling in huge debts.

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.

Nigerian seaports were rated as some of the costliest in the world, as a result of the compounded problems

The Nigerian Ports Authority was indebted to the tune of $34 million with redundancy of 24 out of 83 managers as well as its poor management structure.

However, in 2006, the Federal Government under President Olusegun Obasanjo concessioned the port to private terminal operators and massive investment were made into the ports industry.

Therefore, efficiency returned to port with quick turnaround time for vessels, increased cargo dwell time, increased cargo throughput  among others.

But, aside all the success recorded, it was not yet uhuru for the Maritime sector as complaints of high charges, resistance to regulations and high handedness mar what would have been ten years gains of port concessioning by private operators.

Gains of ports concessioning

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.

Dwell time for goods in ports was reduced due to efficient management.

Congestion in the port was eliminated and corruption among contractors and various service providers at the port were reduced.

Many port premises and quay aprons had been fixed, efficiently managed and utilised  and failed road sections inside the ports that made movement of goods within port grounds cumbersome and very slow were fixed.

Complaints of untraceable or missing cargoes regularly leveled against the NPA were eliminated while security inside the ports that were compromised by the activities of camp-boys, wharf-rats and other miscreants operating inside the ports were addressed with safety if cargoes guaranteed.

High port charges

However, despite the achievement of efficiency, quality services recorded over the years by concessioning the ports, the challenges of high cost have taken shines off the gains recorded by government concesssioning the port

Nigeria ports were rated as one of the costliest seaports in the world, as a result of the compounded problems.

According to the Shippers Association o Lagos State,  Importers and Exporters groan under unkind economic stress as a result of excessive port charges.

They believed charges are still very high, a development they said has continued to make neighbouring West African ports more attractive to shippers.

Importers and agents insist that Benin Republic, Ghana and Togo would continue to siphon cargoes meant for Nigeria because of lower operational cost, faster clearing process and other in­centives.

According to a recent World Bank study that compared charges in Nigerian ports and other sea terminals in West Africa, the results showed that Nigerian ports are the costliest to operate in within the sub-region. For instance, the terminal delivery/ labour charges in Nigeria stands at N62,682, while it is N9,655 in Ghana and N24,000 in Benin Republic. In Senegal, the charge is dependent on weight and volume of cargo.

Concessionaires Resistance to regulations

One of the lowdown of port concessioning was the absence of a regulator at the at the point of concessioning the ports in 2006.

Lack of a substantive port regulator in place who would have created a level playing field and ensured concessionaires played by the rules of engagement gave terminal operators and shipping companies free hand to prey on importers and agents with high and duplicated charges.

But, when an economic port regulator was eventually announced, the concessionaires resisted regulations by challenging the power of Nigerian Shippers’ Council to regulate them.

According to the Executive Secretary of the Council, Barr. Hassan Bello, despite the desire of the Federal Government to implement reforms in the Nigerian maritime sector, some seaport terminal operators are resisting regulation.

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