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

Now That Moghalu Has Lost

Eyewitness reporter

George Moghalu, the Managing Director of National Inland Waterways Authority (NIWA) was among the 14 candidates who contested the All Progressive Party (APC) governorship primary for the November 6th governorship elections in Anambra state.

At the party’s Anambra state primary election held last week, Moghalu came a distant third, losing the APC ticket to Senator Andy Uba.

According to the results announced Sunday, June 27th, 2021 at Golden Tulips Hotel, Agulu Lake, the NIWA boss garnered 18, 596 votes to come a distant third to Senator Uba, who grossed 230, 201 votes, thus putting paid to the ambition of Moghalu to govern Anambra state, at least in the next four years.

We are not by any means celebrating the electoral defeat of the NIWA boss nor gloating over the temporary setback in his electoral fortunes.

But what the Anambra people may have lost in denying Moghalu the APC ticket to vie for the highest position in the state, is now the NIWA gains.

We believe that now that Moghalu has lost in his ambition to run the state, at least at this period, he would now give maximum concentration to the administration of inland waterways in the country.

Chief Moghalu, a core member of the ruling party, was appointed as the Managing Director of NIWA in October 2019 to replace Senator Olorunbe Mamora who was appointed as the Minister of State for Health.

Until his appointment in 2019, Moghalu was the National Auditor of his party.

Stakeholders claimed he was a reluctant NIWA boss as he still had his eyes firmly fixed on politics and how to fulfil his ambition to become the governor of Anambra State at the time he took over in 2019.

His action and miens betrayed his political ambition even while he reluctantly assumed duties at the Lokoja headquarters of the agency.His political ambition, which he could barely conceal, even at the early stage of his tenure, divided his attention and impaired his performance in the discharge of his core duties as NIWA boss.

The harvest of avoidable mishaps on the waterways, lack of will power by NIWA to enforce standard and regulations on the operators clearly showed management which lacked commitment and focus.

The failed state of some of our River ports, the under-utilisation of Onitsha Rivers Port, which one thought could have engaged his attention for obvious reasons, was also a pointer to leadership with divided interests.

The lifeless nature of NIWA’s leadership got to an alarming proportion when the waterways began to witness almost daily mishaps.

Stakeholders, who were concerned by the apparent lack of commitment and focus of NIWA leadership, began to voice out their trepidation over gradual decay and rot on our waterways.

They blamed lack of will to enforce regulations, safety, standard, and lack of regulation such as overloading, night voyage, rickety and old craft as causes of mishaps on the inland waterways.

The erstwhile President of Nigerian Shipowners Association (NISA), Alhaji Aminu Umar, believed that enforcement of safety and standard on the nation’s inland waterways is weak.

“I think the task of NIWA is to standadise safety conditions and procedures on the nation’s waterway.

“There is no standard applied on the movement of people as all kind of boats are being used. It is important that we standardise because lack of safety and standard will increase accident.”

Umar was also alarmed at the unregulated movement of barges with passengers boats which he said was accidents in waiting, blaming it on the lack of weak regulatory powers of NIWA.

He said it’s a huge risk allowing badges moving containers around the port area to be moving side by side with boats moving passengers and vessels approaching the Lagos Ports.

“Moving people and containers at the same time is a huge risk and a safety concern. NIWA and the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Ports Authority (NPA), should see to this,”

Another concerned stakeholder, a professor at the Lagos Business School, Dr. Frank Ojadi, was alarmed at the level to which the Nigerian inland waterways has deteriorated.

He said it was shameful that the nation’s Inland waterways are in ruins and left to rot away instead of being a catalyst for development.

” The Inland Waterway Transport was the platform on which the colonial masters built Nigeria before the railway. It is a shame that it has been left to decay. That is how we do things in this country,” he said.

Also speaking, a member of the Association of Nigerian Licensed Customs Agents (ANLCA), Kenneth Nwachukwu, asked why it was so difficult for NIWA to enforce the banning of night sailing, use of life jacket and overcrowding of boats?

“That the MD is unable to ban night sailing, use of life jacket and overloading is another testament that a lot still needed to be done to clean-up our inland waterways”.

The alarm raised by these stakeholders was an eloquent testimony to the level of loose control from the leadership of NIWA and this could be the function of lack of commitment and focus.

That is why stakeholders said the loss of Moghalu in the APC primaries, though painful, was a blessing for NIWA.

They believe the loss will now afford Moghalu ample time to focus on how to direct the affairs of NIWA to achieve maximum efficiency.

“Now that he has lost, he should concentrate on the job he is being paid for,” an angry operator on the nation’s inland waterways said.

“We urge him to pay more attention on how to enforce standard and safety on the waterways to forestall further loss of lives and properties on the waters” another stakeholder interjected.

The stakeholders believed the relative calm and safety on the Lagos waterways was largely due to the activities and purposeful leadership of the Lagos State Waterways Authority (LASWA) which has been proactive, focused and committed in its quest to enforce discipline on the waterways.

“If left for NIWA, the Lagos waterways could also have witnessed the similar harvest of mishaps as the case in other parts of the country,” another operator said.

“NIWA has practically gone into a coma under its present management as the activities of the agency are not being felt going by the regular mishaps that happen on our waterways where it is now free for all for all kind of boats and crafts whose operators have no or little regards for standard and safety,” an expert in the industry said.

It is therefore the general wish of all stakeholders that Chief Moghalu, now that he has lost the Anambra state APC primary election, would give his assignment at NIWA the utmost priority, maximum and committed attention it deserves in order to bring order and sanity to the nation’s waterways.