Port Terminal Operators refute allegation of indebtedness to Federal Government
The attention of the Seaport Terminal Operators Association of Nigeria (STOAN) has been drawn to an article titled “FG ignores 17-year-old concession fee debts, renews terminal leases” published in The Guardian newspaper of Wednesday, August 23, 2023.
STOAN and its members, who are concessionaires at the nation’s seaports, hereby refute the false and libellous publication, which was obviously aimed at tarnishing their image. Clearly, the article was a hatchet job aimed at damaging the hard-earned reputation of port terminal operators and portraying them in bad light in the eyes of the public. The author of the article, in a desperate attempt to do her hatchet job, and unconcerned about the fact that she would mislead the public, did not as much as bother to crosscheck her facts with the terminal operators that she listed in her report or with the Nigeria Ports Authority (NPA) to which the operators make payments.
It is preposterous for the reporter in question to allege that “while some of the concessionnaires are still owing their concession fees since 2006 up till date, as well as failing to develop the port infrastructure as required of them in the contracts, they have had their various lease agreements renewed after much pressure from certain forces in government mandating the inter-agency committee involved in the renewal processes.” This claim, which was presented in a manner that appeared to be the personal opinion of the writer, was not crosschecked with either the terminal operators in question or the Nigerian Ports Authority (NPA), which oversees their operation and collects revenues due to the Federal Government. Making such false, unsubstantiated claims does not just fall short of basic journalistic standards; it is also libelous.
STOAN is aware that some retrogressive elements and entrenched interests who profited from the chaos of the pre-concession era are bent on reversing the progress made at the seaports over the past 17 years. These elements have become desperate and are looking for opportunities to tarnish the image of port operators.
We remind the author of the article and the general public that prior to the port reform and attendant port concession exercise of 2006, Nigerian ports were in a chaotic state due to the high rate of inefficiency that characterized cargo handling operations. Ships waited for more than 30 days to find berthing space while consignees struggled to get their goods out of the port due to severe port congestion and lack of cargo handling equipment. Corruption was rife at the port as consignees had to bribe port officials to position their cargoes for Customs examination or load containers on trucks.
The ports were also very porous. Vandalisation of containers and imported vehicles, ‘flying of containers’ (meaning illegally taking containers that were not duly released by Customs out of the port), ‘machine outside’ (the forgery of Terminal Delivery Orders and Customs release documents at business centres around the ports) and several other criminal activities were the order of the day. Miscreants popularly known as wharf rats were the lords of the port. Dockworkers were poorly paid while the labour unions of that era ruled with fear. Union officials of the pre-port concession era detained ships and willfully paralysed port activities at the slightest provocation without regards for the economic implications of such actions.
But all of that has changed, thanks to the bold move of the Federal Government to reform and concession the ports in 2006. The port concession transferred cargo handling operations from NPA to professional private terminal operators, who won lease agreements ranging from 15 to 25 years. NPA remained the landlord and technical regulator of the port and provider of marine services.
Seventeen years into the port concession exercise, there is a general consensus that the exercise has fully delivered on its promises. The landlord model of port concession adopted by the
Federal Government has freed the government of the financial burden required to develop and operate the ports. This burden has been transferred to the private terminal operators also known as concessionaires. In addition to not spending money to develop the ports, the Federal Government, through the Nigerian Ports Authority, now realizes much more revenue through the ports.
For the avoidance of doubts, private terminal operators have invested more than two billion US dollars in port development over the past few years. This amount is far above the amount spent by the Federal Government in developing the ports in the 30 years prior to 2006. Also, the annual income of government through the ports has grown exponentially from less than one billion dollars to as much as $6.54 billion annually realized through the payments to NPA, Customs, Federal Inland Revenue Service (FIRS), Nigerian Maritime Administration and Safety Agency (NIMASA) and other agencies of government. Where would this increased revenue have come from if terminal operators were not meeting their obligation as falsely alleged by The Guardian?
A recent study conducted by Akintola Williams Deloitte titled ‘Public Private Partnership (PPP) as an Anchor for Diversifying the Nigeria Economy: Lagos Container Terminals Concession as a Case Study’, affirmed that the ports witnessed increased ship traffic and cargo throughput, leading to 400 per cent rise in container throughput from 400,000 twenty-foot equivalent units (TEUs) in 2006 to 1.6 million TEUs in 2014.
The report also affirmed the eradication of ship waiting time at the port, as ships now berth on arrival. Vessel turnaround time has also been reduced from 30 days to less than a day while the average dwell time for cargo clearance reduced drastically from over 30 days to 14 days.
The ports concession, according to the Deloitte report, also saved Nigerian importers and exporters about $800 million (N400 billion) annually, which, hitherto, was paid to shipping companies as congestion surcharge. Also, through improved security and lighting of the terminals, the ports are now better secured for cargo and safe for port workers.
The port concession exercise has also created more jobs and led to better welfare and remuneration of port workers, including dockworkers who were shortchanged under the old order. This much was confirmed by the President-General of the Maritime Workers Union of Nigeria (MWUN), Comrade Adewale Adeyanju, when he commended the Federal Government for concessioning the ports to private terminal operators, saying the exercise has impacted positively on the lives of port workers.
Adeyanju said prior to the port concession in 2006, the wages of dockworkers were nothing to write home about.
“The era of using dockworkers as slaves in their fatherland no longer exists. We want to thank the Federal Government for concessioning the ports because that reform has changed the lives of dockworkers all over the nation’s seaports.
“Before concessioning, the wages of dockworkers was nothing to write home about. In those days, an average dockworker that worked for eights hours a day would go home with four thousand naira at the end of the month. We used to have stevedoring contractors but they did not care about the welfare of the workers. Some of the stevedoring contractors even ran away with the pensions of dockworkers.
“But since the terminal operators came in, we have seen the difference between the stevedoring contractors of those days and the terminal operators of today. We have been enjoying the present arrangement. My happiness today is to see dockworkers retire back home with something reasonable as retirement benefit,” Adeyanju said during the signing of a new three-year Collective
Bargaining Agreement by members of the Seaport Terminal Operators Association of Nigeria (STOAN) and the union in March 2021.
The Chairman, Seaport Terminal Operators Association of Nigeria (STOAN), Princess Vicky Haastrup, who led other concessionaires to sign the Collective Bargaining Agreement, also corroborated Adeyanju’s position. She noted that terminal operators have ensured industrial harmony at the seaports by prioritising the welfare of dockworkers.
The gains of Nigeria’s port concession exercise are not in doubt as the exercise has received several commendations from home and abroad. The Bureau of Public Enterprises (BPE), the Infrastructure Concession Regulatory Commission (ICRC), former Ministers of Transport, lawmakers and many other high-ranking officials have all commended the port concession exercise, which has brought tremendous benefits to the Nigeria economy. The numerous accolades for port concession would not have come without the huge investment made by terminal operators and the harmonious working relationship between NPA and the operators. The renewal of expired port concession agreements is, therefore, hinged on the sterling performance of the terminal operators and the desire of concessionaires to inject fresh funds into the ports. It has nothing to do with political patronage as mischievously stated in the Guardian article.
The writer of the Guardian article further exposed her ignorance and mischief by alluding to the repair of quay aprons at the port. For the avoidance of doubt, the provision of marine services and repair of quay aprons rest with the NPA and not terminal operators. The reporter would have been given the correct information if she had bothered to contact the right sources.
A former General Manager Public Affairs of Nigerian Ports Authority (NPA), Chief Christopher Abiodun Borha, who played a key role as the spokesman of NPA during the port concession exercise, captured the sentiments of the port community about the exercise thus: “Not only was the port concession excellent, it should serve as a guide and it has served as a guide for ports development.”
According to Borha, the purpose of Nigeria’s port concession “has been achieved 100 per cent”.
We, therefore, caution journalists and media organisations to crosscheck their information with all concerned parties before publishing articles that make unsubstantiated claims and damage the reputation of port investors.
It is our expectation that The Guardian will give the same prominence to this rejoinder as it gave the malicious and fictitious publication in question.
Get the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardian’s leading coverage of Nigerian and world news, business, technology and sports.