The recent directive by the Minister of Transportation, Mu’azu Sambo to the Nigerian Shippers’ Council (NSC) to carry out a performance audit on terminal operators before their license is renewed may set the Council and Nigerian Ports Authority (NPA) against each other.
Investigation by Shipping Position Daily revealed that NPA had already renewed the lease agreements of some of the terminal operators, prior to the directive of the minister about three weeks ago.
Recall that the minister of Transportation, when he visited NSC had directed the Council to carry out performance audits on the terminal operators as part of pre-requisites for any lease renewal.
Sambo had expressed dissatisfaction that requests for concession agreement renewals from the NPA had been submitted without verifiable data on the performance of the terminals.
He had specifically declared that, as the port economic regulator, the Shippers’ Council was best placed to audit the performance of the terminal operators.
Some stakeholders have however expressed fear that this development may likely pitch both NPA and NSC against each other.
Checks by our correspondent revealed that some of the terminal operators whose concession agreement had expired have had their licenses renewed by the NPA after being cleared by the Infrastructure Concession Regulatory Commission (ICRC).
Shipping Position Daily gathered that terminal operators such as: Port and Cargo Handling Services, ENL, Josepdam (all in Lagos), and AMS in Warri already had their concession agreement renewed.
According to documents from the Ministry of Transportation, and the Infrastructure Concession Regulatory Commission (ICRC), the concessionaires were said to have complied with all the rules and have been duly awarded appropriate certificates by ICRC, which is the constitutionally mandated agency for that purpose.
Investigations by our correspondent revealed that a memo to the Minister of Transportation from the ICRC, dated December 30, 2022 and referenced ICRC/HQ/P/S.04/266, revealed that the Minister had been fully briefed on the conclusion of the concession agreements.
The memo reads in part: “The honourable Minister may wish to note that the Commission had given approval to the Nigerian Ports Authority (NPA) for the renewal of the Terminals Concession through letters referenced ICRC/DG/50/S.52/118 dated September 24, 2021, subject to obtaining all necessary approvals including the Federal Executive Council for ease of reference, and attached copies of the letters.
“The Commission’s approval was given based on the Business Case submitted to the Commission by the NPA and subsequent negotiations held between the Government team (NPA, ICRC, the “Transaction Adviser) and the affected Terminal Operators.”
However, a stakeholder in the maritime sector, who spoke on condition of anonymity, said the minister was turning logic upside down by attempting to drag the Shippers’ Council into an agreement that had been concluded by both the NPA and ICRC.
The source said, while the process of the agreement was at the preliminary stage, the Shippers’ Council was duly represented in the inter-ministerial committee set up by the immediate past Minister of Transportation; Mr Rotimi Amaechi, “to follow everything to the end”.
“Mind you, the inter-ministerial committee set up by Rotimi Amaechi had submitted a report over a year ago, and in that Committee, the Shippers’ Council was represented by Chief Agu and Mrs Ifeoma. So for the current minister to turn around now to say that the Shippers’ Council was not carried along does not arise, because, one, they were represented, even though, legally speaking, they are not a party to the agreement and they have no part to play in the concession agreement. Their role in the Act setting up Shippers’ Council does not include the role the minister is giving to them.
“They are not technically equipped to know what NPA or the terminal operators are doing. Their job does not include the role the minister is giving to them, so .whatever the minister is doing is totally illegal and has no place in law. It is an overkill”, our source said.
However, in his reaction to the directive a maritime lawyer and senior partner Akabogu and Associates. Dr. Emeka Akabogu stated that the minister’s directive was in order, even as he argued that the NSC is empowered to undertake the responsibility which is being thrust upon it by the minister.
Akabogu said: “The Minister is trying to involve relevant agencies of government who have a mandate with regards to the port operations and the regulations of the port to be involved fully in that process, as opposed to leaving out organisations which actually have a role to play in that process.
“Now you recall that under the NPA Act of 1999, there is provision or contemplations for concessions of the ports and the port environment and that is why there was a push at the time, the concession agreement were being considered for a review of the NPA Act towards the Port and Harbours Act; that initiative did not see the light of the day and even up till now the legal framework upon which the port concession is standing remains nothing more than the contracts between NPA as the landlord and the concessionaires as the operators and the BPE as confirming party”.
“Now in their (NSC) capacity as the Economic Regulator of the port, one of the powers they are conferred with is the power to advise the Federal Government through the Minister on matters relating to port charges, port facilities related matters. It equally empowers them to advise with regards to the provision of the port concession agreement entered into between the NPA, the BPE and the concessionaires and don’t forget, if you look at the regulations it cut across not just of the mandate or operations relating to the port, but with regards to ensuring efficient operations, safe practices, fair trade and overall compliance with competitions and its related requirements within the port environment.
“So the NSC is actually significantly empowered to undertake the responsibility which is being thrust upon it by the Minister and the Minister, in thrusting upon it, that responsibility is not doing it a favour by way of his discretion. He is actually simply getting them to do what they’re empowered to do under the NSC Port Economic Regulations of 2015”.
Explaining further, he said: “I think the Minister’s directive is not for them to review the agreement, but to audit compliance with relevant issues relating to the agreement. So I think largely the Minister is not wrong and I will not agree that the Minister is setting the NPA and NSC at loggerheads”.
Speaking also, another maritime lawyer and Managing Partner, Maritime and Commercial Law Partners, Barr. Osuala Emmanuel Nwagbara stated that the Minister’s directive is legally in tandem with the role of NSC, adding that stakeholders in the industry have over the years complained that NPA has carried on with the concession renewal agreement as if it is only within their exclusive reserve to do that.
He said, “the port is a part of the Commonwealth of the Nigeria citizen and in granting a concession to manage such a commonwealth the input of the people of Nigeria represented by both private sector and public sector interest must be taken into account.
“In the past, stakeholders have complained that NPA has carried on with the concession as if it is only within their exclusive reserve to do that, that is wrong, the NPA should put into consideration that the NSC who should actually be the operator of the ports have inputs In terms of fixing charges and related issues, the concession agreement that is being reviewed have as a part of each context charges and rate.
“Since 2014, NSC became the economic regulator, there is no agreement in the port industry that would be treated as properly entered into without the inputs of the NSC. So the Minister of Transportation in my view was right to have asked the NSC to make an audit of the activities or operations of the concessionaires which is to determine whether they have played by the context, have they lived up to the content of the agreement to start having such concession renewed and in what terms if those concession agreement must be renewed.
“So I would advise that beyond asking the NSC to make a recommendation following their audit of the concession agreement, other stakeholders should also be given the opportunity to make their own input, before NSC satisfies any terminal operator and before they have their agreement renewed.
“The views of stakeholders should also be collated and inputted into the agreement for the good of the country for the growth and prosperity of the maritime industry”, he said.
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