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10 years after, NPA to review ports concession pacts

By Sulaimon Salau
12 August 2016   |   3:02 am
Citing irregularities in the ports concession agreements signed with terminal operators 10 years ago, the new management of the Nigeria Ports Authority (NPA) is set to review the deals.There have been complaints...
Hadiza Bala Usman, Managing Director, Nigeria Port Authority.

Hadiza Bala Usman, Managing Director, Nigeria Port Authority.

Terminal owners groan under shallow water draft

Citing irregularities in the ports concession agreements signed with terminal operators 10 years ago, the new management of the Nigeria Ports Authority (NPA) is set to review the deals.There have been complaints that the government has not met its obligations in the deal after raking in over a N1 billion from the exercise and has continued to collect tariff from the operations.

During the familiarisation visit of the Managing Director of NPA, Hadiza Bala Usman, to Calabar ports yesterday, numerous challenges that have bedeviled operations of the concessionaires were revealed.Usman, who expressed worry about the situation at the ports, said: “This further establishes more reasons we should review our concession agreements. I think we must do that.”

Among the ports operators visited were Ecomarine Nigeria Limited, Intels Nigeria Limited and Shoreline Logistics.Speaking exclusively with The Guardian after the tour, the Group General Manager, EcoMarine International, Balogun Moruf Adedayo, said reviewing the concession deal was of utmost importance, as the company continued to face several challenges due to the non-fulfillment of some terms.

“The challenges are numerous but the most challenging is the draft limitation. By the time we took over the concession, we agreed that government was going to dredge the Calabar channel to achieve 9.4 metres deep draft. This is also entrenched in the agreement, unfortunately since we took over 10 years ago, we are still on 6.4 meters draft. This is a serious limitation. As you well know, there is a proportional relationship between the draft of the channel and the size of the vessel that could come in. So this has made it practically difficult for us to attract huge container volumes and we have been virtually surviving on liquid cargo which is not enough to cover our cost.”

Adedayo stressed that sustaining the company’s operations has been quite challenging. “We need a lot of ingenuity, persuasion. It is like practically squeezing water out of stone. The business environment here is not friendly and the tariff is even high.”The EcoMarine boss identified other problems to include paucity of funds, forex hike and insecurity. “We believe that it is a long distance race because we have a concession that covers almost 30 years. We believe that if the right thing is done, we still have enough time to recoup our investment,” he said.

Stressing the need to review the pact, Adedayo said “if they see the terms and obligations that we owe as concessionaires as entrenched in the deal, this may evolve giving us palliatives. It can come in whatever way. You can extend the term or review the throughput dues. These are factors that are well defined in the agreement that if actually tampered with could help to ameliorate the problems. But we will rather prefer more focus on the dredging.”

The Head, Administration and General Services, Intels Nigeria Limited, Chibuisi Onyebueke, said “the concession is 10 years old, so, there won’t be anything wrong in reviewing the agreements.

According to him, the NPA boss has already expressed willingness to know the authority’s area of lapses and to discuss them.Onyebuike said: “Ten years on, some of the things we saw on ground when we made our bid may no longer be there now. We are also in Onne and Warri, the insecurity challenge is another germane issue.”

He lamented that the channel is shallow (6.2 metres draft), therefore, limiting the size of vessels that will come into the ports. “The draft in our own terminal is 10 meters, which can take bigger vessels, but how will the vessels come in?” he asked.

Onyebueke said that another peculiar challenges was an oil rig named Delta Queen which has been abandoned at its jetty since February 2009. This, according to him, has halted operations and caused a huge loss in revenue to the company.“It came here to do maintenance and since then the crew members left the rig owing to problems between them and the Owneri Seawolf, which is battling with AMCON,” he said.