Uncertainty trails West African seaport projects

Recent reports by a shipping consultancy firm, Drewry, has revealed that most port projects across the West African region are now in uncertain waters amid a change in the location and nature of transshipment hubs serving the market.

Already, the report said two major greenfield projects in Lagos, (Lekki and Badagry ports) have been hit by the sharp decline in Nigerian container traffic over the last couple of years. It added that overall regional activity has fallen by nearly 13 per cent since 2014, with more spectacular falls in some countries, particularly those with oil-based economies such as Angola (-50 per cent) and Nigeria (-30 per cent).

Drewry said: “In the long run, major new port projects will make sense, although it is unlikely that all the proposed projects can succeed.” As the region’s largest port market, Nigeria had attracted two substantial new port projects in Lekki, and Badagry. Originally scheduled to be operational in 2016, Lekki was backed by ICTSI and CMA CGM, but ICTSI announced its exit from the project, citing “delays in execution,” while its partner, CMA CGM will likely follow, according to the shipping consultancy.

“The Badagry project meanwhile is backed by APM Terminals and TIL (MSC), but limited progress appears to have been made, and APMT now has a completely revised corporate strategy focused on optimising existing assets rather than developing greenfieldones,” it stated.

Meanwhile, the new Terminal Investment Limited (TiL) (MSC) hub at Lome, Togo, is growing fast. Having opened in 2014, it handled over 500,000 TEU (Twenty-foot Equivalent Units) in 2016. In addition, MSC recently signed a 35-year concession agreement with Ivory Coast’s second port of San Pedro, to upgrade and operate its container terminal.

MSC has reportedly stated that that the improvements would allow vessels of up to 14,000 TEUs to use the facility. Abidjan is already established as a hub port in Ivory Coast, and San Pedro will join it, indicating that MSC is not going to rely on Lome as a single hub in the region.

Ocean carriers have many ways to serve the West Africa market. West Med ports have an established hub port role, serving the region from the outside, while within it Lome is becoming established thanks to Mediterranean Shipping Company’s (MSC) backing.

In the West African region, lines use deep-sea services that make direct calls at a wide range of West African ports. Deep-sea services that call at a few main hub ports in West Africa, from where the smaller ports are fed, as well as services where cargo is ‘interlined’ via West Mediterranean hubs connecting east-west loops to services that run between these hubs and the full range of West African ports.

Despite the decline in market volumes, MSC has been increasing the capacity on its single Asia-West Africa loop, where the average vessel size moved from 9,501 TEU to 11,374 TEU, a 20 per cent increase.