New ports concession agreement provides for sanctions, says NPA

Terminal operators seek balanced implementation
A new regime that will further enhance efficiency in the Nigerian ports system is in the offing, with the review of concession agreements to address existing loopholes, and prescribes strict sanctions against defaulters.

This is just as players under the auspice of Seaports Terminal Operators Association of Nigeria (STOAN), support the review, which seeks a fair and balanced administration.

Current concession agreement, which was signed in 2006, authorise terminal operators to handle cargoes and allied businesses.But operators believe there is a need for a review in view of identified lapses identified in the existing regime. Indeed, some operators had accused the Nigerian Ports Authority (NPA), of not living up to its obligations in the contract especially in dredging of water channels.

The Managing Director of NPA, Hadiza Bala Usman, confirmed recently that the review of the agreement was ongoing, and would benefit all parties and boost the national economy. Usman described the ports concession as a huge success for Nigeria, and the maritime industry, adding that the review was an opportunity to check areas of non-compliance by either the concessionaires or the NPA.

“We are looking at obligations by the respective parties, the Nigerian Ports Authority and the concessionaires. Some of the key takeaways from the review would be that there would be sanctioning on both sides, meaning sanctioning for non-compliance by the concessionaires and also by government.

“If government, for example, is required to maintain a particular depth of draught, and government does not do that, there will be a clear penalty that government has to take for not meeting its obligations. This is the new consideration we are looking at reflecting in the concession agreement. These were recommended to us by a consultant engaged by the World Bank to support us, and we are working with the terminal operators on what needs to be done to conclude on this review,” she said.

Spokespersons, STOAN, Bolaji Akinola, in an interview with The Guardian, confirmed that the ports concession has brought about unprecedented growth in Nigeria’s ports system, and assured that operators are ready to embrace the new regime for improved efficiency.
Akinola described the concession as one of the most enduring privatization model in Nigeria, which has also been emulated by countries across the world.

According to him, the concession agreement gave room for review in order to increase efficiency, and terminal operators are wholly in support of the move. He said: “We are working with NPA to ensure a successful review. The agreement places responsibility on the government and the operators, so we have to respect the sanctity of contract. Everyone has to play his role, and we support the fact that anyone who refuses to play his role should make up for it, or be sanctioned.

“As it is being done on the side of the operators, it should exercise the same force on the government. We are ready to play our role, off course, we have been doing that and we are ready to do more. However, we will not protect any operator that doesn’t play its role.

“We also expect the Federal Government to continue to play its part. We are interested in ensuring efficiency at seaports, that is the way to grow Nigeria’s economy. We expect that the sanction should be a balanced process and we are happy with the way NPA is going about it. We believe that the review would finally be to benefit of Nigeria and Nigerians.”

Usman had earlier told The Guardian that the review would redefine the Guarantee Minimum Tonnage (GMT), as well as address smuggling of vehicles and rice into the country.She said the plan would also attract private more investors to Nigerian ports and assured of government’s determination to continue to provide necessary infrastructure at the ports.