INTERVIEW
Otunba Kunle Folarin is an expert as well as an authority in the Nigerian maritime industry, he has utilized his wealth of experience spanning decades to the advancement of the Nigerian shipping sector. He is currently the Chairman, Port Consultative Council. In this interview with Shipping Position Daily correspondent; DAPO OLAWUNI, Folarin proffered solutions to some challenges confronting the industry and its practitioners. Enjoy the first part of this revealing interview.
INTERVIEW
Otunba Kunle Folarin is an expert as well as an authority in the Nigerian maritime industry, he has utilized his wealth of experience spanning decades to the advancement of the Nigerian shipping sector. He is currently the Chairman, Port Consultative Council. In this interview with Shipping Position Daily correspondent; DAPO OLAWUNI, Folarin proffered solutions to some challenges confronting the industry and its practitioners. Enjoy the first part of this revealing interview.
Do you agree with the Senate Committee on Privatization that port reforms has yielded much revenue?
I don't know what prompted the comments of the committee, but if they are saying that port concession has yielded revenue for Nigerian Ports Authority. Well of course, the entire port reform is to change the clime of the port industry and one of the major areas of reform is investment and standardization of the terminals in terms of cargo handling operations, one of the major issues in the agreement is the NPA handing over operations to terminal operators and still be entitled to royalties on every tonnage of cargo discharged or loaded, while investments in cargo handling equipment, wages, manpower and all others have been taken care of by terminal operators. The royalty NPA is collecting becomes a net income, in order words they are not exposed to any expenses in the operations, yet they collect their royalty which they are entitled to, this increases the revenue in a way. Also, the volume of cargoes have increased, the container throughput has increased, general cargo and bulk cargoes have increased, and they also collect money on petroleum products which has always increased over time, so I believe that the revenue generation of the NPA has certainly improved compared to what obtained before the concessioning.
Do you think the concessionaires are doing enough for our ports?
If you look at the privatization project itself, this is the first phase because none of the tenures have elapsed yet, we have them coming on to deliver on a mandate which is to increase productivity, reduce the cost of doing business in the port, invest in the port equipment and generally make the port competitive in the region, if you look at all these parameters, I will say that they have delivered on two of their mandate, they have increased productivity in the port and the turn-around time of vessels have reduced significantly, the productivity per day has also increased considerably. We now look at the other two planks of the mandate, which are; reduction in the cost of doing business in the port and the investment in equipment particularly in cargo handling and internet technology in cargo documentation, and generally creating an environment that will make the country competitive in the region. They have started a major approach to this, but what we want to see above all is increase in the modernization of the port system, creating an environment where the infrastructure will be first class. They also must be supported by a multi-modal transport system like the rail connection to the terminals, this will modernize the port and increase the opportunity for fast delivery and movement of cargo and possibly, reduce lack of transport to carry cargoes when they are due and also the nuisance that the articulated trucks constitute on the road.
Do you see the Nigerian Shippers Council succeeding in its regulatory role?
Before taking up this responsibility, it was in their domain to do cargo administration, they intervene, they arbitrate generally in areas of cargo delivery, they also deal with issues of freight rate negotiations in Nigeria, these are two prime considerations that will come to play in their regulatory role. One will suppose that, haven got the background in that field, they need to expand their knowledge, expand their skill to be able to deal with wider varieties of issues that will come into their domain, they have the capacity for the job, but they have to widen their horizon and bring in more skills necessary for negotiation and arbitration and generally be able to compute appropriate freight rates and port charges.
Can Shippers’ Council bring agencies like Customs, NIMASA and NPA to order?
It is very clear, the law is the law, the police is an enforcement agency; a policeman can also arrest a fellow policeman. So I cannot see why the Council can feel shy of bringing any of the agencies to order if they fell foul of the law, it is clear, there is no exemption in areas or agency they cannot touch.
The proposed Cabotage Act review is yet to be effected, what do you think is delaying?
I can understand the frustration of many of the key players in the industry, don't forget that the Act has been in operation for about 10 years, all shades of opinions have been expressed in the various segments of the Act; some believe that the Act is very ambitious, believing that compliance will be a tall order. So in order not to ground the economy through this sector, the waiver clause was introduced, it was not to create sacred cows in the industry, but to ensure that there is a fall back in cases of lack of compliance or inadequacy in the ability of maritime stakeholders to take advantage of the law. I believe that government must be given the benefit of doubt this time around, they have come out to say they want to review the Act, they have also asked for stakeholders’ input and sentiments towards this review. Haven said this, in reviewing a law that has been in existence for ten years, you must be able to convince the National Assembly and the government on why it should be reviewed, without creating an impression that you just want to bulldoze the review without taking cognizance of the consequences of what the review will be. It has been said by various stakeholders that certain provisions of the law is very ambitious – the shipbuilding, and the compliance in particular, commentators are now saying that why not start small by saying that ships with small tonnage should be exempted, while the bigger vessels which we never have the capacity to build should be allowed in. These smaller vessels can be fabricated and assembled in Nigeria, if the Act must work, then we must work with reality, we must moderate it in a way that we cannot plead lack of opportunity for those claiming waivers. Can you say you cannot get a cook, a greaser or the ratings to be on the ship? A lot of stakeholders have also suggested that there should be a timeline, we should continue to review the positions, and expect total compliance by 10years or 20years, then every service consumer that has to comply with the Act will have a notice, so if you are working in good fate, you should be able to have complied by the end of the years stated by the reviewed Act.
The Navy has been making impact on maritime security, but it seems NIMASA has gone to sleep
Maritime security is an expansive mandate, it is not a mandate that is domiciled in only one agency, when we talk of maritime security, it is a wide spread, it could be the port, the territorial waters, inland waterways, or the sea lanes. The issues are: is Nigeria combating armed robbery or piracy, or the internal security of the port covered by the ISPS Code. We must be looking at areas that each agency can be engaged according to law, possibility and ability. If you look at the ISPS compliance, it is also maritime security, it has to be done by a designated agency and it is only less than a year now that NIMASA was given that responsibility from PICCOMS. So it is still in its early days to start measuring if they have done well, we know that they have done a lot of sensitization of the public on the ISPS code, this is the area of the NPA too, the NPA is to provide security within the port operating areas and access to the port, they have a whole department to do this, in other words, it is a multiple agency responsibility. By law, for instance, NPA is to provide port security, there is an interface where, between ship and shore the NIMASA will come in, especially in regards to explanations on Port State, Flag State and so on which is not within NPA domain, but when you go outside Nigeria, our territorial waters belong to the Navy, the Nigerian territorial waters is to be policed by the Navy.
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