Analyses

NPA channel management options: dangers of politicising the process

By Dr. Edmund Chilaka

Preamble
The recently reported pronouncement by the Federal Ministry of Transport (FMOT) on the Nigerian Ports Authority’s (NPA) management of seaport channels deserves the closer attention of port industry operators to ensure that it is in line with the best interest of all stakeholders.

According to the news reports, the FMOT was reported to have directed the NPA to re-consider in-house management of the channels.

In view of the extreme importance of the issues at stake here, it is critical to make this clarificatory comment to ventilate the space and avail the public, all authorities, and especially policymakers, of the unimpeachable facts of the case in hand.

For, as Edmund Burke said, “the only thing necessary for the triumph of evil is for good men to do nothing.”

From my long experience in publishing local and international dredging data and comparisons with other successful maritime nations, I can say that the dredging of the channels is at the crux of Nigeria’s current position in both regional and international sea trade, especially as the commander of over 65% of the maritime shipping traffic in West Africa.

The aim of this comment, therefore, is to protect the integrity of Nigeria’s channel management architecture from any adverse groundswell of politics, and the reason is obvious.

The reach of Nigeria’s port industry presently exceeds the boundaries of national politics and any interventions deemed by any stakeholder to have adversely affected their operations brook possible legal actions locally or overseas, with Nigeria’s sovereign assets exposed to judgment claims.

I shall demonstrate this below. So, what are Nigeria’s options for harbour dredging in order to avoid an erroneous backward step?

Is the reported FMOT directive on the matter tenable, practicable, and/or, advisable?

Why Dredge at all?

Unlike countries blessed with natural seaports which have deep channels unblocked by silting sand, many Nigerian seaports are actually built along rivers and dredging their channels to the sea is indispensable to make them functional in the international scheme of shipping and maritime trade, and to keep them to the advertised draughts.

Any port is only as good as its channels and berths. Without a navigable channel, no port will be patronized by ship owners, carriers, or other marine operators, because the essence of a port is as a gateway to safely bring in imports and take out exports, without damage to the vessel.

For example, the Lagos port system came alive only after 1907 when the steam dredger, Egerton, removed the blocking sand shoals to gain a depth of 10½ft needed by big steamers to call at the Customs Wharf in those days.

Previously, most Lagos-bound cargoes were landed at Forcados Port (which had the necessary depth), for transshipment to Lagos.

Thus, from 1907 till 2005, the Lagos port system was dredged continuously using in-house management and infrastructure and the status of its channels and aids to navigation always determined the size and growth of its annual throughput volumes.

NPA’s In-House Dredging Management: Pre-Concession Era

However, although the dredging regimen used during the pre-colonial, colonial, and post-independent periods sufficed for the time, the Authority’s in-house harbour management methods began to fail by the 1980s.

There were ship groundings and lots of complaints from ship owners. Note that the NPA had acquired some equipment for dredging and wreck management, namely: two trailing suction hopper dredgers (TSHDs), Sea Lion and River Challawa; the suction dredger, SD Gumel, the heavy-duty crane, Kakube, the buoy-laying vessel, Bode Thomas, and the hydrographic survey vessel, Argungu, all deployed to the Lagos pilotage district.

For the Eastern ports, the Authority retained the services of Tayasa Dredging Nigeria Ltd and the foreign dredging companies.

This was the state of affairs until the Joint Venture partnerships with Lagos Channel Management (LCM) and Bonny Channel Company (BCC)) were set up in 2005.

Nevertheless, as I write, most of this NPA’s owned fleet of dredgers and equipment in Lagos are completely outdated and non-functional.

In a telling report of this era, the World Bank concluded that the state-owned enterprises (SOEs), including NPA, guzzled Government subventions, returned losses on investments, were incurably bureaucratic, slow, corrupt and mostly irredeemable.

This verdict gave rise to the seaport reforms. However, I daresay that if the present FMOT idea of restoring NPA’s in-house channel management arrangement is adopted, the previous issues which necessitated the reforms would resurface.

The nation would see more of such losses of key equipment caused largely by the typical bureaucracy, lack of maintenance, and ineptitude.

Moreover, new staff would have to be employed. Would they be willing to work the 24/7 rosters being used presently by the JV partners to keep the Lagos and Bonny pilotage districts effectively deep, buoyed, lighted, and wreck-free?

The Origin of the Joint Venture Partnerships

Conversely, let us take a closer look at the JV channel management arrangements which were emplaced during the 2001 seaport reforms.

So far, it remains the most rigorous and concerted effort to lift the Nigerian seaport system to international levels of administration and operation, as attested by current key performance indicators (KPIs).

Various stakeholders and consultants participated to deploy this system, including the National Assembly, the Federal Executive Council, the FMOT, the National Council on Privatisation, the Transport Sector Reform Implementation Committee, the Bureau of Public Enterprises, the World Bank, CPCS Transcom Canada, the ICS, Royal Haskoning, NPA, NIMASA, and several inter-ministerial committees, on the one hand.

On the other hand, there was the coterie of local and foreign shipping lines and port operating companies, which participated in the bids for the port terminals offered by the NPA under the emergent seaport concession programme.

The process lasted from 2001 and culminated in 2006 when successful bidders took over cargo operations in 26 terminals, which were offered for a concession from Lagos to Calabar under the newly-adopted landlord port model.

The joint venture partnership agreements which shared the former in-house channel management functions with the NPA were established with LCM and BCC in August 2005. Coastal and Reclamation Engineers (CARES) were appointed as independent dredging auditors.

The resultant lease agreements and joint venture partnerships relied on the execution of the NPA Act, section 8 sub-sections j, l, x, to protect stakeholders’ investments.

Fifteen years later, one can attest to modest achievements by the JV partnerships, especially the improvement in safer and deeper channels for the concessionaires’ strive for increased throughput volumes.

For example, whereas the cargo throughput in 2005 was 44.9m metric tons, by 2014 it had risen to 84.9m metric tons. Also in 2014, the Maersk Caldiz, the largest container vessel to call in Nigerian ports, began regular calls at Lagos and Onne ports following the depth of -13.5m and 14m achieved by LCM and BCC in Lagos and Bonny, respectively.

Other large vessels drawing deep draughts such as Maersk/West Africa Maxima and the Total FPSO, Egina have also called at Lagos and other ports in recent times.

In addition, the BCC, which handles Bonny/Port Harcourt pilotage district, has made it easier for LNG vessels (which form one of the core revenue-earning sources for NPA) to navigate the channel safely.

These unprecedented achievements, to my mind, are foundations for growth and further improvement and the system that sustains them ought not to be lightly cast away or dismantled without a robust Plan B.

Conclusion

Thus, it is not wise to just ask NPA to resume in-house management of the channels if in the end, the Authority’s corporate bureaucracy jeopardizes or can be claimed to have jeopardized the movement of ships in the pilotage districts or other lawful operations of the concessionaires which, under the lease agreements, are required to remit annual lease fees, royalties and other levies supposedly accrued from successful operations at the terminals.

What if it is proven in court that NPA’s underperformance in channels and berths management led to lowered incomes of the concessionaires, will the Authority still stand well to successfully claim those fees, royalties, and levies unchallenged?

Would the concessionaires not be right to seek variations of their payment obligations if their ships began to run aground or if their shipping schedules were unduly affected because of draught restrictions caused by NPA’s in-house handling of the channels?

These were some of the reasons for emplacing the channel management joint venture partnerships in the first place.

In fact, the recent newspaper publications by NPA (14 November 2016) which invited consultants to bid for the dredging and channel design optimization studies aimed at a comprehensive review plan of the Bonny/Port Harcourt, Calabar and Lagos pilotage districts and seeking to emplace optimal efficiencies signposted the Authority’s proactive desire for the provision of safe, navigable and cost-effective channels.

This underscores the fact that the channels must not be allowed to fall into the hands of untested, unproven, or quack management that lack proper technical proficiency and track record.

In sum, it is concerning that if care is not taken, the fallouts of politics can threaten the port and maritime industry at its nascent stage of development.

Efforts must be made to avoid taking steps that are inconsistent with the internationally attested program of concessions which have proved altruistic, progressive, and yielded substantial gains to Nigeria’s maritime status.

As they say, one step above the sublime is ridiculous. There should be found a way to settle arising disputes in a way that shields from attack the springs of such a well-functioning system as the NPA joint venture partnership arrangements on channel management.

Dr. Chilaka is the publisher of Dredge, Drill & Haul magazine and lectures at the University of Lagos.

ReplyForward

Analyses

Nigeria Maritime media celebrates Adeniyi over his transformational leadership as Customs boss

Funso OLOJO

In an unprecedented show of solidarity and unanimity in the acknowledgement of his sterling performance as the Comptroller-General of Customs, the maritime media practitioners have conferred an award of ‘Iconic Maritime Personality of the year 2024’ on Adewale Adeniyi.

The award, which is to be officially presented to the CGG on January 16th,2025 at the Apapa Port Customs Command Auditorium, Lagos is a testament to the transformational leadership of Adeniyi which the media practitioners agreed has revolutionized the Nigeria Customs Service.

The unprecedented recognition of the performance of Adeniyi was a unanimous decision by all maritime journalists covering the maritime beat in Nigeria which cut across print, electronic and online media, led by the different beat associations.

These include the Maritime Reporters Association of Nigeria (MARAN), League of Maritime Editors (LOME), Association of Maritime Journalists of Nigeria (AMJON), Maritime Journalists Association of Nigeria (MAJAN), Shipping Correspondents Association of Nigeria (SCAN), Online Maritime Media Association of Nigeria (OMMAN) and Congress of Maritime Media Practitioners (CONMMEP).

They believe that CG Adeniyi has posted impressive performance since his assumption of office as the Customs CGC.

According to a nomination letter sent to the CGC by the Secretary, Award Planning Committee, Mr Innocent Orok, “there is no gainsaying you have redeemed and repositioned the Service in all areas. These include revenue collection, anti-smuggling activities, trade facilitation, national security, staff welfare, inter-agency collaboration, infrastructural upgrading, Information and Communication Technology, and Corporate Social Responsibility, among others.

“It is also incontestable that your record-breaking performance has attracted national and international laurels to you, the Service, and Nigeria as a whole. Unarguably, it is partly for these reasons that the Leadership Newspaper Group recently honoured you with the award of the Public Service Personality of the Year.

“We, the maritime journalists, comprising both print, electronic and online media covering the beat, are happy to be part of this history-making with you as partners in progress.

“In appreciation of your superlative performance and, by extension, your unrelenting support to the media, especially the maritime media, we nominate you as the ICONIC MARITIME PERSONALITY OF THE YEAR.”

On his part, the Chairman of Award Planning Committee, Dele Aderibegbe, explained that “the award is coming at no better time than during the Renewed Hope Agenda of President Bola Ahmed Tinubu, who is looking for focused and dedicated leaders to take the Nigerian economy out of the woods.

According to him, “this honour is very symbolic. First, this is the first time in the maritime sub-sector that all the journalists covering the beat will come together to honour a deserving performer per excellence, who has made the Customs and Nigeria proud by his purposeful, professional and patriotic leadership.

“Secondly, the Nigeria Customs Service under Adewale Adeniyi has been reconnected to international frontiers and leading in revenue collection, anti-smuggling activities, trade facilitation, ICT, modernisation, and inter-agency collaboration, among others.

“This honour by maritime journalists is also to set an agenda for other agencies of government and their appointees that the ever vibrant and dogged maritime media are watching them.

“We are inviting special guests, especially other agencies’ heads and maritime stakeholders to come and witness this great event, which is first of its kind in the Nigerian maritime industry.”

Analyses

Maritime Labour’s selfish stand against Ports and Harbour Bill

Comrade Adewale Adeyanju, PG, MWUN

The Eyewitness News Analysis

For nine years, maritime labour has fought against the passage of the Ports and Harbour Bill 2015.

Initiated in the eighth Assembly and sponsored by Senator Andy Uba of Anambra South Senatorial District in 2015, the bill, read for the first time on the floor of the National Assembly in 2016, seeks, among other things, the decentralization of ports operations by involving more private interests in ports operations.

The purpose is to open up the ports space for massive investments and attract private sector funds that would be used to build massive port infrastructure.

The bill, if allowed to be passed into law, will repeal the Nigerian Ports Authority (NPA) ACT 1955 as amended by Act CAP 126 LFN 2004 and establish Nigerian Ports and Harbour Authority.

The bill seeks to further consolidate the gains of the 2006 ports concession programme which ceded terminal operations functions of the NPA to the private interests.

However, the bill which enjoyed accelerated hearing on the floor of both the Senate and the House of Representatives, was stalled and got stuck at the ninth National Assembly where it had passed through the third and final reading and waiting to be passed to the House of Representatives for concurrence before its transmission to the President for his assent.

The maritime labour under the aegis of the Maritime Workers Union of Nigeria( MWUN) had mobilised its massive membership across the maritime space to stall the passage of the bill.

The major reason for its opposition, according to Comrade Adewale Adeyanju, the President-General of the Union, is the fear of job loss for the teeming members of the union.

The position of the Maritime Workers union is quite understandable and in tandem with the modus operandi of all labour unions.

No matter the nobility and credibility of the objectives of any public service reform, if it conflicts with the interests of the members, the labour unions will fight it.

In as much as we sympathise with the position of maritime labour on the issue of the Ports and Harbour bill, its position against the passage of this noble bill, is at best, selfish and self–serving.

The Union has not controverted the public benefits which the bill, when passed into law, will bring to the Port operations in the country.

Such benefits as attracting more private sector funds to develop the maritime industry and fix the decaying port infrastructure, thus making our ports more attractive and competitive globally.

Over the years, the government has been overwhelmed with the demands to fund public infrastructures, hence its attraction to concessions, collaborations and partnerships with private sectors in order to get their funds for the development of some critical public infrastructures.

The worsening economy in the country has further placed a huge burden on the government so much so that it has started to falter in some of its financial obligations to these public infrastructures.

Further borrowing will sink the economy into a deeper mess as the country still wallows in the anguish of repaying its humongous debts.

So private participation such as the one being sought by the Port and Harbor Bill will save the nation’s sea ports from further decay due to the inability of the government to fund such a huge commitment.

For many years, the Nigerian Ports Authority has been going cap in hands to the multi- national finance companies to seek $800 million needed to rehabilitate the dilapidated ports infrastructures at Apapa, Tin Can, Onne and Calabar ports, an amount the Federal government could not afford.

Many stakeholders fear that the terms for such loans may not be too favourable to Nigeria as the lenders, in order to hedge against any risks, may hold the NPA to ransom, thus mortgaging our ports to foreign interests.

But with the passage of the contended bill, private sector funds will be readily available to carry out such remedial works without necessarily mortgaging our ports to the imperialist multi-national Finance corporations.

The labour union should rise above its selfish and parochial interests and look at the larger picture of the more developed and efficient port system under deregulated port operations.

The same opposition the Labor put up against the port concession programme of 2006 because of fear of job loss.

Yes, the programme recorded some casualties just as similar reform exercises, but the end eventually justified the means.

As widely acknowledged by the stakeholders, port concession, which ceded terminal operations to private interests, has resulted to massive infrastructural rebirth at the Nigerian Ports.

Terminal operations have become highly efficient, fast and safe which has led to a quicker rate of turnaround time of vessels.

The concessionaires have injected massive funds for the infrastructural development of the terminals.

While the concession programme shipped out redundant labourers, those who survived the purge now earn fatter salaries with mouth-watering remunerations and fantastic welfare packages which was not the case during the pre-concession era.

Comrade Adewale Adeniyi at one time attested to this change in the financial fortunes of his members who are working at the terminals.Working against the passage of the Ports and Harbour Bill will be tantamount to stagnating the progress of the ports and the retardation of the financial fortunes of the very workers the union is claiming to be fighting for.

We understand that there would be casualties just as in the port concession programme and other reforms exercises, but those who are left will enjoy the benefits of the reform.

We are not an advocate of job loss especially at this trying time of the economy when the unemployment market is congested but no surgery is carried out without pain.

No reform is without casualties but the end will certainly justify the means.

Rather than the labour union throw away the baby with the birth water and oppose the passage of the bill in its entirety, the leadership of the union led by the amiable and indefatigable Prince Adewale Adeyanju, should seek to sit with the government and find a common ground for mutual benefits.

No government would be as insensitive as to throw away its workers who have staked their lives and energies to build an entity without adequate compensation and reward.

Just as what happened during the negotiations over the workers’ fate at the concession exercise when the affected workers were given a soft landing, the labour Union could made a similar demand to give a soft landing for any casualty that may be recorded under the disputed bill.

But to outrightly ask the government to jettison the bill which the generality of stakeholders had described as a new dawn in the maritime industry would be the height of self-preservation and selfishness, thereby placing the interests of few persons over the general good of the industry.

We understand the frustration of Comrade Adewale Adeyanju and his team over their inability to access the Minister of Marine and Blue Economy, Adegboyega Oyetola yet, we advise the team should be more persistent and patient.

With patience and diplomacy, the Minister will grant them an audience.

The Union should desist from clothing its interests for opposing the bill in the garb of public interests as it sought to do when its leadership claimed that the bill will expose the port space to security risks, a claim that is not verifiable and an attempt to blackmail the government.

Comrade Adewale Adeyanju should not yield to the urge to disrupt port activities should the union not have its way over the bill as the industry has enjoyed an uncommon industrial peace and harmony since he ascended the leadership of the union, a feat that was largely attributed to his style of negotiation rooted in lobbying and dialogue.

Analyses

Nigerian Shippers’ Council: An economic regulator as hypocritical arbiter

Emmanuel Jime, NSC Boss

The Eyewitness Reporter

Today, Tuesday, October 24th, 2023, the looming disruption of port operations by the distraught freight forwarders who were protesting what they called a unilateral increase in terminal charges by the terminal operators, was dissipated when all the parties involved in the cargo value chain, especially the freight forwarders, were called for the re-negotiation of the increase.

The Nigerian Shippers’Council, which was said to have approved the initial increase without the involvement of the freight forwarders, beat a quick retreat amidst mounting pressure from the irate freight forwarders and called for a truce between the contending parties.

Yesterday, Monday, October 23rd, under the siege of the rampaging freight forwarders, the National Association of Government Approved Freight Forwarders (NAGAFF) who had stormed the corporate office of the Nigerian Shippers’Council Council, the Executive Secretary of the council, Emmanuel Jime, had quickly recanted the initial hike, said to be over 600 percent, admitting that there was an error in the process leading to the increase.

Held ” hostage” by the protesting freight forwarders troop, marshaled by the Field Commander, Alhaji Tanko Ibrahim, the National Coordinator, NAGAFF 100 percent Compliance team, Jime agreed that the council had made a mistake.

“There were certain steps that were not proper; so we will review them immediately” Jime admitted while addressing the irate freight forwarders on Monday, October 23rd, 2023.

“I’ll make sure that we re-engage the process in a way that will meet the needs and expectations of stakeholders in the industry.”

“I have personally discovered that our internal mechanism has not been properly implemented in order for us to arrive at the decision that we made.

“We made that decision, I cannot deny it, but the decision was made on the basis of some information that was provided by certain people.

.”We’ll review the decision,”

True to his words, Jime quickly convened a meeting among the terminal operators, shipping companies, and freight forwarders where the parties mutually agreed to a price hike of 400 percent.

With this, all parties were happy and the looming unrest in the port was dispersed.

The whole scenario has exposed the hypocrisy and insincerity of the Nigerian Shippers’ Council which is the economic regulator and statutory arbiter between the terminal operators and the shippers.

By its status and stature, the council is statutorily mandated to protect the interests of shippers against the imperialist tendency of the terminal operators.

It was at a later stage of its creation, that the scope of its functions was expanded to economic regulation which gives it the authority to mediate between the shippers and the service providers in terms of charges and services.

In the build-up to the initial increase which the council was said to have endorsed, why didn’t Jime and his management team do the right thing as espoused by the concession agreement that negotiations on price increase by the terminal operators should involve the shippers as represented by their agents and the terminal operators?

What is the input of the Minister of Marine and Blue Economy who has to endorse the increase as recommended by the shippers council as contained in the concession agreement?

The Nigerian Shippers’ Council had all along been playing the Ostrich as its management kept sealed lips over the template adopted for the initial hike.

It was not until the heat from the agitating freight forwarders was getting unbearable that the Council’s Emmanuel Jime started to make his confession.

Like the politician he is, he was quick to recount the initial flawed process he was involved in order to stave off the looming unsavory consequence.

From the confession made by the Shippers’ Council boss, it was obvious that the council did not involve the freight forwarders in the initial process leading to the 600 percent now-rested hike.

It shows the height of insincerity and an act of complicity on the part of the Shippers ‘Council to have secretly approved the initial hike without following due process.

In as much as the terminal operators have the right to increase their charges, given the prevailing economic situation in the country, the shippers and their freight agents who will bear the brunt of the hike have the right to be part of the negotiation.

This was what the Shippers’Council did today, Tuesday, October 24th, 2023, though belatedly.

If the NAGAFF troop as commandeered by the fiery Tanko Ibrahim had not carried out physical blockage of some terminals and laid a siege on the headquarters of the Shippers’Council in protest, then it goes without saying that the initial hike would have gone unchallenged.

The council, in this matter, had given itself away as a biased and compromised arbiter whose hands have to be forced to do the right thing.

If the council had abinitio followed the due process in this matter, it would have saved the industry the avoidable tension that was generated in the last one week.

One thing stands out: no one, including the freight forwarders, has denied the necessity of a price hike, but the point of friction was the failure of the commercial regulator to toe the line of due diligence.

Unfortunately, the council, by this act of commission or omission, may have sustained a deep cut in its approval rating among the shippers whose interests it was statutorily created to protect and at the same time lost the confidence of the freight forwarders as an impartial arbiter.

Kudos to Tanko Ibrahim and his team who refused to be docile like the Association of Nigerian Licensed Customs Agents (ANLCA) whose new leadership has displayed an unimaginable level of docility in this cause.