The NPA’s sail in the wrong vessel

ON Monday, November 16, 2015, an Executive Director in the Nigerian Ports Authority, (NPA) issued an internal memorandum tagged “Handling of Oil and Gas Cargo at Julius Berger Terminal, Warri”. The memo on its face value seemed a patriotic step to enhance government revenue at the ports. But it has the potential of a corrosive epistle to plunge the maritime industry into another major crisis that will draw litigations and have dire economic consequences for the country.

In the memo, NPA claimed that “the Federal Government was losing revenue on oil and gas cargo handling in some terminals”. The reason for these losses, it stated further, is that, “whereas, a Multi Purpose Terminal may handle Oil and Gas related cargo and charge the lower rate of $1.12 per tonne for General Cargo, the same cargo meant for the 10Cs and handled in a designated Oil and Gas Terminal will attract $5.82 per tonne”. NPA then concluded that, “as an interim measure, the expected vessels to call at Julius Berger should pay $5.82 per tonne to prevent diversion of vessels to neighbouring countries”.

A cursory look at this internal memo will expose its hoax and contradiction. Firstly, there is nothing called Oil and Gas Cargo from the port reform documents of 2006, through the memorandum of agreement binding all the concessionaires. Neither was the term mentioned in NPA’s Annual. It was simply not in their lexicon. There are only three recognized cargo types: Container, Bulk and General Cargo. Stake holders also know this. What we have is multipurpose terminal and all the terminals in the eastern zone, in Nigeria, are multi-purpose terminals and therefore can and have been handling general cargoes that include pipes and other items that are now dubiously tagged oil and gas cargoes.

NPA claimed that while a multi-purpose terminal may handle so-called oil and gas cargo and pay $1.21 per tonne, a so-named oil and gas designated terminal would pay $5.82 for the same cargo. This is deceptive simply because the ports and terminal operators after the concession negotiated with the federal government and an agreement was reached to pay $1 per tonne, for the cargo handled, to the government before the terminals were handed over to the owners. Over time, it was increased to $1.21. Of critical importance is the fact that these terminals charge $7.40 per tonne for the discharge and loading of cargo and then remit the agreed $1.21 to the government. The $7.40 charged by Terminal Operators is for direct discharge, devoid of rent or transfer charges from the ship to the stacking area. The only exception to the port rule, the only organization that cargo owners are compelled by NPA to patronise at far higher costs is INTELS.

This is the only terminal that charges $65 per tonne and remits only $5.82 to the federal government’s vault. NPA’s memo of November 11 is, therefore, a legitimisation of INTELS charges. In 2006, when NPA started the heinous activity of diverting what it dubbed ‘oil and gas cargoes, the President, Olusegun Obasanjo intervened, set up a panel headed by Dr A.S.P Sekibo, which submitted its report on May 16, 2006. recommending, among others, the need for government to curtail the proximity of INTELS management to the political class. The report also recommended that “importers of oil and gas related cargo should be free to choose their ports of preference”.

But this was not the end of the ritual of economic sabotage and impunity at the ports. In 2008, President Umaru Musa Yar’Adua re-affirmed Obasanjo’s government for importers to freely choose the ports that appealed to them. He ordered the minister to publish his government’s position in a national newspaper, which he duly complied with in The Guardian of Monday, August 18, 2008, stating: “Notice is hereby given that importers of oil and gas related cargoes are free to choose their port of discharge for their cargoes. This notice supersedes an earlier directive stipulating particular ports of discharge for such cargoes”.

But on April 27, 2015, under the administration of Dr. Goodluck Jonathan, NPA sent a directive to all port Terminal Operators, Shipping companies etc , to the effect that ‘oil and gas related cargoes must berth at the designated terminals in Onne, Warri and Calabar. These three ports are controlled exclusively by INTELS. Naturally, this directive prompted ports operators to besiege the courts with a flurry of litigations to seek redress. These cases are still pending.

NPA’s memo of November 11, 2015, is an endorsement of impunity at the ports. The imposition of fee on terminal operators, jangles with the object of the port reforms which is to enhance competition and reduce the cost of doing business at Nigerian Ports. This will be a bad omen for the terminal operators, NPA and indeed Nigerian economy at large.

• Okafor, a public affairs analyst wrote from Lagos.