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BUSINESS NEWS: Nigerian ports old, need dredging, rehabilitation —NPA MD, Bello-Koko

BUSINESS NEWS: Nigerian ports old, need dredging, rehabilitation —NPA MD, Bello-Koko

Publish date: 2022-07-02 23:11:52 | Author: Anozie Egole | Source:

Managing Director of the Nigerian Ports Authority, Mohammed Bello-Koko, speaks with ANOZIE EGOLE on the agency’s plans to renew agreements with concessionaires, amongst other issues

You recently marked 100 days in office. How has the journey been so far and what have been the challenges?

It has been quite amazing. I have been in the system so it was quite easy to carry on. The same challenges that have been there were also what I met: the issue of collaboration with stakeholders, the issue of port efficiency, the need to improve revenue, remit more money and so on. So, it is the same challenges. What we have done is to look at them and try to proffer solutions and improve all the indices as it relates to our key performance index.  Whether it is the cargo dwell time that we have reduced or improvement in our revenue, it has been a quite amazing experience in the last few months.

What is actually delaying the renewal of the concession agreement with some terminal operators?

There are some concession agreements that are due for renewal. Remember that the concession agreement came into effect in 2006. As at the time the agreement was signed, there was no Infrastructure Concession Regulatory Commission, ICRC.  The ICRC was not in existence and the Act was not there. And then, as at the time the agreement was signed, the need as at then were different from the needs of today. It is now almost 10 years ago. And the international competitive environment has also changed vis a vis what was there before and what is there now. So, in reviewing that concession, one of the things we looked at was the current state of those ports and terminals. And some of those concessions that are expiring happen to be in Tin-Can and we all know that at Tin-Can, the quays are collapsing. They are decaying and there is a need to rehabilitate them. Some of the responsibilities there were that of NPA. We felt they should now be the responsibilities of terminal operators.  We looked at what the developmental plans of the terminal operators are, and how much money they were going to spend in the development of some of these terminals if they were going to renew. We also looked at the equipment they were buying and its number.  What is the capacity of the equipment? We looked at their responsibilities and decided that it was important to bring in some other things to hold them more responsible. We also know our responsibilities. Now, the ICRC Act requires that we advertise for an international bid and entirely new bids should take place. It is in such a way that both the existing terminal operators and  any new interested party should bid.

However, the concession agreement had given right of first refusal to the existing terminal operators, so there is a conflict here. However, we found a middle way where we asked the terminal operators to bring the Outline Business Case. After that, we asked them to bring the Full Business Case. That is what we are reviewing to look at their investment plans, development plans of those locations and that is what have delayed it. While some of them were ready to go along with our suggestions on what the government wanted, one or two of the terminal operators were not specific in terms of their investments and even if they were, we felt it was not enough and that has delayed it too. Of course, we all know the issue of COVID-19 that delayed so many things. Don’t forget that there are also multiple government agencies involved in most of these reviews.  It is not just the NPA. We have the Federal Ministry of Transport, ICRC, Bureau of Public Enterprises and even the Federal Ministry of Justice and all will be involved. So, it is a multi-agency initiative and that is what is delaying it. Let me reiterate that there is no intention to terminate any existing concession agreement unless the terminal operator is not ready to abide by the new rules and conditions.

One of the challenges we have at the ports now is empties containers littering everywhere due to inability of the terminal operators to provide holding bays for their empty containers. How do you intend to address these going forward?

That is one of the problems with the concession agreement signed in 2006. The spaces meant for holding bays were actually made part of the operational areas of the terminals. So, you find out that in the past, for example, there was no space to put like 1000 or 500 containers. That space is barely available to put or keep up to 20 per cent of it. But let me also correct this impression about the holding bay. Actually, it is the shipping lines that are responsible for creating holding bays for empty containers. Of course, the shipping lines now send the containers out of the country through the terminals. So, I agree that the terminals should have spaces for empty containers, but it is the shipping lines that should actually be responsible for that, which is why we have come up with a policy where each shipping line must have empty container holding bays outside the ports. So, using the Electronic Call-Up System, what the truckers do when they are carrying empty containers is to get an ETO ticket that enables them to go and drop their empty containers at the shipping line’s empty containers’ holding bay. And when the vessels are ready to sail, both the empty containers and the export containers are now called into the ports to load directly into the vessel. We have also encouraged the terminal operators to give as much space as possible for both the trucks and also empty containers. But, normally, the empty containers get into the ports almost immediately they are needed for loading into the vessels.

Are there plans to concession barge operations?

Let me, first of all, thank barge operators for working with the NPA to provide another means of evacuation of cargoes, which has really reduced the pressure on the roads. The number of twenty-foot equivalent units the barges are currently doing is quite impressive and we appreciate that so much. What I said was that we are going to create a barge call-up system using a private-public partnership the same way you have the truck call-up system. What we have seen is that there are so many barges in the channel moving around. We have now requested that during meeting, we will determine the barges that are being loaded and where they are moving from one point to another. We have been holding meetings with barge operators to stress that we must also create a minimum safety standard for barges. We have had instances of barges conveying boxes in the channels and sometimes we have heard reports of containers falling into the sea. We have had breakages in terms of barges breaking down, and then some of them don’t have the right communication equipment. Some of the barge operators don’t have the right licenses. That is what we are discussing with them, telling them that it is important we agree on the rules of engagement. There must be a standard operating procedure whereby you know that barge A is leaving from point A to point B and this is the time we will allow it to move and this is the route it will take. There is a need for communications between them and our harbors department. There must be quality and the barge must be safe. It must have the capacity to carry a certain number of containers. We are also trying to regulate the number of containers that barges can take, depending on their sizes and their capacities. And then, we need them to be branded because we have been having accidents in the channel between barges and minor vessels. At times, it is difficult to identify the barge. We want proper branding and we are discussing with them.

And finally, the barge operators have been operating free. We gave them licenses and they have been operating in the channels and terminals and the NPA has not been charging them any tariff.  There are approved tariffs we are discussing with them and we are going to introduce tariffs in the next few weeks. They have to start making payments to the government. It is a new source of revenue and they are making money from it. So, it is right that they pay the government. Their operations are affecting some of our quays. We have instances where barges have bumped into our buoys in the channel. We have instances where some of the barges have actually destroyed our fenders, especially in Ikorodu and some other places. So, we need to charge them in order to be able to replace and maintain some of these things.

What are the plans towards rehabilitating the TinCan and Apapa quay aprons that are collapsing. How soon are we to expect the repairs?

We all know that the Tin Can port has almost got to the end of the useful life. What the NPA has been doing is remedial rehabilitations, but we need to reconstruct now before it collapses fully. There is no danger of imminent collapse of Tin Can port or the quays. It is important to correct that impression. However, there is a need to ensure that the imminent collapse does not occur. There are cracks all over the place, and there are collapses here and there in the quay aprons in particular. What we have done is that, for terminal operators whose agreement is expiring, we have sat them down to discuss  the possibility of them funding the reconstruction of those quays. Like I said before, not all of them have the financial capacity to reconstruct because it is no more rehabilitation but full reconstruction. While some of them might be able to have financing in the next few months, others might not be able to meet up and then you need to have uniformity in terms of the construction plans and so on. We also didn’t want the terminal operators to come up with their own engineering designs. So, we are coming up with a holistic engineering design of the ports. When we do that, we also have an estimated cost of over $600 million. Now, we are looking at the funding options. The first option is for the terminal operators to reconstruct those berths. Either we give them time to recoup their investments or we extend their leases. But some of the lease extensions will be for upward of 40 years or more, which we believe is actually not in the interest of the government. The other alternative is for the NPA to reconstruct those quays and to do that, we are going to fund it ourselves. We are working towards requesting the government’s approval to use a certain per cent of our revenue to fund the reconstruction of Tin Can. Or if that amount is not available to fully fund the reconstruction of Tin Can, we use the hybrid model where NPA, with the approval of the government, will borrow money from one of the agencies to fund a certain percentage of the reconstruction while it uses its revenue to fund the remaining part of the total cost. We have already started discussions with one of the multilateral agencies. We are just being proactive. When the government decides to go that way, we know that we have already done some of the work. The other option is to just get a multilateral lending agency to fully fund that reconstruction. The FMOT has been pushing and given timelines in terms of the starting of the reconstruction of Tin Can. But it is not something you can do immediately. There is a need to do some studies and engineering designs. Decisions need to be taken on how best to reconstruct it without disrupting marine, operations and other businesses at the ports

So when are we expecting the commencement of the reconstruction?

Well, it is a process and we are pushing it as quickly as we can. It could take a few months, but I know that all things being equal, we should have some traction within the year. That will enable us to start reconstructing. So, probably, it should be by the end of the year.

What are the plans towards reviving eastern ports in order to decongest Lagos ports?

Let me, first of all, state that the decision on where to take cargoes to is that of the importer and the exporter. So, it is the consignee that decides the port he or she wants the cargo to go. He or she decides whether it is the eastern ports or any port in Lagos. However, I understand that what endears people to any port is how efficient the port is and we know that the ports in the East have draft limitations. That limitation is because of the design of the quays right from the beginning. Rivers port is over 100 years old and the design there is over 100 years old. That means you need to modernise that place. Calabar port is also very old and it needs to be dredged first to bring in bigger vessels. The reason why the channel hasn’t been dredged is because of an existing legal matter that has stopped us from dredging that place. A company that was given the contract to dredge the port is in court with the NPA. That has stopped us from dredging that place. For Delta port, recently, we got approval for remedial dredging of the Escravos and that would ensure we get to 7.5meters that was there. However, we need it to be deeper. There was a breakwater that collapsed over 10 years ago and studies are being concluded currently to determine whether to reconstruct the breakwaters or build a new one in a new location. It is over eight kilometers long and the current estimate is over $200million to reconstruct that breakwater.

So, it is more like a national project that has limited the size of vessels coming into Delta ports. However, to ensure that there is an improved efficiency, what we have done in these locations is to ensure the deployment of marine craft. We have also ensured that there are third party towage companies that are responsible for towage of vessels and sailing them off when they come to our waters. But we need to look at the third party towage agreement to improve on them because they have been complaining of the cost of bunkers and so on. We have also been collaborating with the Nigerian Navy. One of the reasons why people don’t use those ports is the issue of insecurity. We have been working with the Navy to improve their patrol in the waters to improve security in the area and I believe that when we do that, it will encourage more shipping companies to make more vessels available to  that part of the country. When this is done, importers and exporters will be interested in doing business from there. But some time ago, we actually gave tariff relief to encourage people to bring in more vessels, especially to Calabar and I think Delta port also. But we are reviewing it to see how we can come up with a tariff that will trickle down to the importers themselves and probably make them bring more goods to that area.

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