L-R: Representing Group Executive Vice Chairman/CEO, SIFAX Group; Mariam Afolabi, Former Managing Director, Nigerian Ports Authority; Chief Adebayo Sarumi, Staff Adviser; Maritime Forum, University of Lagos (UNILAG); Dr. Adewale Olawoyin, Executive Director, SIFAX Off Dock, Okota, Major Henry Ajetunmobi [rtd], during the Taiwo Afolabi 3rd Annual Maritime Conference last week at the UNILAG.
Former Managing Director of the Nigerian Ports Authority (NPA); Chief Adebayo Sarumi, who executed the 2006 port concession, has urged the present management of the Nigerian Ports Authority (NPA) to review the deal, with a view to ensuring competition among terminal operators and eliminate monopoly.
He acknowledged that interference from ‘the top’ at the time of concessioning the port in 2006 brought about the monopoly of cargo handling being witnessed among concessionaires in the port system.
Speaking at the 3rd Edition of the Taiwo Afolabi Annual Maritime (TAAM) Conference held at the University of Lagos at the weekend, Sarumi who chaired the event lamented the existence of monopoly in the sector as responsible for high port costs, port charges and lawlessness among some concessionaires.
The theme for the 2018 TAAM Conference was “Port Costs and Charges: A recurring Decimal under Ports Reform Regime”
The former NPA boss admitted that the port reforms was long overdue before 2006 as NPA was doing badly, especially with slow turnaround time for ships, shallow channels and using of 1993 tariff system which led NPA subsidizing port services at a huge cost.
Recalling, he said: “When I handed over the container terminal to AP Moller, the only container crane that I had there was bought in 1978, and had refused to work for ten years before we handed over, we couldn’t even get a crane that can lift container from the ship to the ground, but APMT imported 10 cranes from Port Elizabeth to Apapa port and improved the situation”
“When the terminal operators came in, they saw another lacuna, the lacuna they saw was that, it was as if NPA, monopolistic as we were; we handed over monopoly to another monopoly, so monopoly shifted position”
Recalling instances of undue interference, he told the gathering of maritime industry stakeholders that, “one of the scenes I heard was where a terminal operator, ENL terminal proposed to handle container at her terminal and it was worked out, but there was an order from up that every container must go to AP Moller, despite the explanations we tendered about ensuring competition”.
“Now there is no competition, everybody now does what he likes, the terminal operators do what they like in their area, I do hope that when the NPA is reviewing what we did in our time, they would find ways of bringing competition into terminal operation” Sarumi charged.
In his keynote address, the Group Executive Vice Chairman of Sifax Group, Barrister Taiwo Afolabi said that port cost in Nigeria is attributable to prevailing high exchange rate of Naira to the American dollars.
According to Afolabi who was represented by his daughter; Mariam Afolabi, when the ports were concessioned in 2006, the naira was between N121 and N131 to one Dollar. He lamented that obligations of terminal operators to the Nigerian Ports Authority now requires more dollar.
"By what percentage will the cost of services be adjusted upward to reflect the astronomical changes in the foreign exchange regime?, he asked.
We are convinced that these are matters of immediate and practical concern to every Nigerian and to the regulatory agencies that need to harmonise and balance the conflicting viewpoints to the satisfaction of the stakeholders", he postulated.
Presenting the conference lecture, Chairman of Nigerian Ports Consultative Council, Otunba Kunle Folarin highlighted strategies to reduce port cost in Nigeria. According to him there is need for a deliberate government policy to reduce customs duties and taxes, and set up effective and efficient single window platform.
He also called for the creation of a port community system as a framework for stakeholders’ dialogue to improve service quality and reduce costs. He also advised on the need to encourage Public Private Partnership in port business, investment in modern facilities and IT enablers and providing good quality human resources.
But, Stakeholders Tasks Shippers’ Council On Regulation
Meanwhile, panelists at the conference charged the port economic regulator, Nigerian Shippers’ Council on the need to enforce proper regulation of all players in the maritime sector and importantly build stronger relationship among supply chain operators.
One of them, Major Henry Ajetunmobi ( rtd ) argued that, there must be a government regulator as port cost cannot be imposed, it has to be discussed. He said that the responsibility of the port reform exercise must be borne by all parties including concessionaires and the Nigerian Ports Authority.
He accused the NPA of haven failed to live up to its responsibilities as bargained in the port concession agreement. He stressed that terminal operators now bore all unanticipated costs while NPA only collects its royalties.
On his part, former National President of Association of Nigeria Licensed Customs Agents, Prince Olayiwola Shittu said there was no dialogue in the sector, stressing the need for the Shippers’ Council to ensure periodic dialogue.
He said: “Reasons for setting charges should be communicated to the stakeholders, the importers and agents for downward transmission to the end users. As it is today, indigenous terminal operators are doing better than foreign terminals”.
Shittu faulted the port concession exercise of 2006, saying that the ports which ordinarily should have been given out to two terminal operators were cannibalized and handed over to several companies because of political considerations.
Moderator of the session, and Senior Assistant at Banwo & Ighodalo, Mr. Adedoyin Ademola Afun stressed the need for political will that will bring about reduction in port cost. According to him, port operators are in business to make money, hence, they cannot be blamed for increasing cost in line with economic realities.
Director of compliance at Nigeria Shippers’ Council, Chief Carjetan Agu said the council has been faced with stiff opposition from terminal operators and this has hampered her from bringing about the needed solution to most port challenges, especially high port charges.