Uncertainty as FG adopts six-month port concession renewal

The Federal Government continues to grant terminal operators of expired port concessions six-month renewal, allowing them to continue operations at the ports, The Guardian has learnt

This temporary arrangement, which has become a norm for expired concession contracts, follows delays in reviewing the original agreements, which have been due for evaluation since 2016.

This was disclosed yesterday at the 2024 annual seminar for maritime journalists, organised by First Mediacom Network Limited and the Nigerian Shippers’ Council (NSC) in Lagos.

The Group Head of Corporate Communications at SIFAX Group, Olumuyiwa Akande, said the current arrangement allows for the legal continuation of port operations but lacks long-term clarity.

“At the expiration of the concession, there has been a six-month renewal that the port operators receive. So, after every six months, there is a renewal. The port operators are legally operating,” Akande said.

He emphasised that while port operators continue to operate legally under the short-term renewal measure, the absence of a clear, long-term agreement has created instability and uncertainty within the industry.

The Deputy Director of Monitoring and Enforcement at the Nigerian Shippers’ Council (NSC), Sarumi Jelili Adesina, noted that despite the delays, port operators have been granted extensions, allowing them to continue operations while awaiting final decisions on the concession terms.

He added that the concession agreements, initially due for review in 2016, have faced significant delays even with the Ministry of Transportation setting up a committee to handle the matter.

Adesina explained that while the NSC was not involved in the early stages of the review, it was later incorporated into the process.

He also noted that while the Nigerian Ports Authority (NPA) has been reviewing the agreements, the authority opted for a five-year review period instead of the longer-term arrangement proposed by some stakeholders.

He said this interim decision, made in 2017-2018, continues to influence the terms of the concession agreements today.

Adesina emphasised that despite these ongoing discussions, there is no clear indication from the government that it is unwilling to extend or revise the current agreements.

“Nothing has suggested that the government is unwilling to extend or review the agreements. The process is still ongoing, though the future remains uncertain,” he stated.

Speaking earlier, the Chief Executive Officer of First Mediacom Network Limited, Sesan Onileimo, described the proposed Nigerian Shipping and Port Economic Regulatory Agency Bill 2023 as a transformative development for the sector.

He noted that the bill aims to enhance the ease of doing business, ensure fair competition, and encourage innovation in port operations.

While acknowledging stakeholder concerns about implementation, Onileimo expressed optimism that the bill’s passage would create a more competitive and equitable industry, adding that the new reform is expected to transform service pricing, create fairness, and boost confidence among providers and users alike.

He also underscored the need for capacity building among maritime journalists and the provision of a platform to foster dialogue on challenges and opportunities in the sector.