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Why We Should Accept Port Infrastructure Failures

Why We Should Accept Port Infrastructure FailuresBy Kenneth Jukpor

The maritime industry in Nigeria and elsewhere is seen as a veritable engine of growth of national economic development and a catalyst to any sustainable transformation agenda. Maritime is a sector that can be a notable contributor to efforts at poverty reduction, creation of wealth, promotion of skills acquisition and encouragement of entrepreneurship. If seriously harnessed and exploited, maritime can contribute very significantly to the growth of Nigeria’s Gross Domestic Product (GDP) and eliminate the nation’s unsustainable over reliance on petroleum as Nigeria’s major revenue earner.

However, many industry stakeholders are confused that despite these multifarious potentials inherent in maritime domain, there is still a major disconnect. Nigeria’s population which determines the market and economy has remained unchallenged in the Africa since independence as the biggest importer and exporter in the region.

Nevertheless, one of the major facing maritime activities in Nigeria has been the shambolic state of the nation’s port infrastructure. In a bid to solve some of these issues, the second edition of the Taiwo Afolabi Annual Maritime Conference which held recently at the Main Auditorium, University of Lagos (UNILAG) was strategic with the theme, “Nigerian Port Reforms”.

In his keynote address, the Executive Director SIFAX Haulage & Logistics, Major Henry Ajetunmobi (Rtd) stated that Nigeria’s cargo throughput, inclusive of oil and gas, far outstrips those of other seaports in the such-region put together, therefore he called for the development of the nation’s port infrastructure which he posited as an umbrella term that covers all those activities and facilities that support, and enhance the maritime transport sector, making it efficient, productive, safe and environmentally friendly by an effective regulatory framework.

“These include the ware houses, scanners, ICT (information communication technology) ports access roads, whether tolled or non-tolled including tunnels and bridges etc. One of the key objectives of this conference is to promote the culture of intellectual discourse in the country’s maritime industry. This intellectual engagement will be solution-oriented. We seek to address topical issues that are germane to the prosperity of the maritime sector as well as all its stakeholders, which include the client, agents, investors, regulators, workers and the community, among others.

“I identify with the school of thought which believes the way to go is increased and sustained investments in port infrastructure coupled with introduction of progressive and innovative changes in the way we do business.”

Ajetunmobi proposed public-private partnership (PPP) a model for port infrastructure that could be vital to maintaining service level, leveraging on private sector skills and competencies in project execution and service delivery through improved skills, technologies and innovation, unlocking access to capital and cost efficiencies, maintaining safe and secure operations, freeing government funding for other sectors of the nation’s economy, etc.

He stressed that according to the International Maritime Organization (IMO), the United Nation’s affiliate responsible for regulating the global maritime industry, over 90 per cent of the world’s trade is transported by sea and it is, by far, the most cost-effective way to move en masse goods and raw materials around the world.

He argued that intermodal transport or more precisely, the lack of it, in the Nigerian port context, remains a major challenge to port efficiency, noting that it has become the Nigerian seaport terminal operator’s worst nightmare.

“Efficiency in port operation is best achieved when the three modes of transportation – sea, rail and road – are seamlessly brought together in a sustainable manner. Intermodalism not only confers speed on terminal operation; it readily qualifies port terminals that enjoy it easy access to classification and recognition as modern and efficient terminals in the comity of their industry peers. Speed and efficiency of operations manifest in short vessel turn-around time which itself is largely determined by how fast import cargo is discharged from the vessel and export cargo loaded into vessel alongside.

“It is challenging enough that maritime Nigeria has over the years neglected the wisdom in intermodalism when it chooses to focus majorly on just one mode of transport (road), to the near total neglect of the other two vital modes-rails and barges.” He said.

Meanwhile, in her contribution at the event, the Chairman, Seaport Terminal Operators Association of Nigeria (STOAN), Princess Vicky Haastrup stated that the government needs to change its attitude on policies that affect port operations by engaging port stakeholders who understand the challenges.

Vicky Haastrup who is also the Executive Vice Chairman, ENL Consortium posited that the major factors that have impeded the sector from fulfilling its potentials is huge infrastructural deficit, highlighting the deplorable access roads, faulty cargo scanners, non-existent rail system, non-functional truck bay, among others, as issues that negatively impact the service delivery efficiency at the ports.

Haastrup suggested that in a bid to curb the level of congestion at the Apapa port, Lilipond terminal should be converted to a truck holding bay when the concession expires.  She maintained that terminal operators have fulfilled their end of the bargain to develop the port infrastructure to global best standards but lamented that issues scanners and bad roads have been the undoing of the ports.

However, the Managing Director of the Nigeria Ports Authority (NPA) Ms. Hadiza Bala-Usman noted that the first major port reforms took place with “the enactment of Ports Acts, 1954 (cap. 155 of the laws of the Federation of Nigeria and Lagos) in 1955, which created NPA as an autonomous public corporation, charging it with responsibility for certain ports and harbor activities, which hitherto, were the responsibilities of disparate government departments and private companies.”

Usman who was represented by Mr. Stanley Yitnou, stated that since the concession of Nigerian port terminals to private operators in 2006, the port industry has witnessed very significant improvement in ports infrastructure and revenue generation .

“We are not saying that we have arrived at where we are headed to but our story today is much better than that of yesterday and we look forward to a very bright tomorrow even as we continue to work together with our private sector partners and inspire each other towards our goal of excellence. As port services are demand driven, early investment in infrastructure is imperative because it is a widely held notion that a port whose infrastructure lags behind demand will certainly hold back economic development.”

She noted that port infrastructure is capital intensive with long-term payback periods; therefore it is a burden governments cannot easily carry due to the competing demands for scarce funds. Usman said, “This is particularly true in light of present economic realities of the prevailing recession, dwindling oil revenues, and the dire need for diversification. There is no better time to deploy private capital for development of port infrastructure, and apply private initiative and efficiency”

However, she added that in order to enable Nigerian ports be on par with enviable maritime nations of world, “the nation’s ports need extensive infrastructure overhaul, but as we are confronted with the stark reality of the paucity of public funds to deliver on the mandate, hence, the only way is through PPPs. In this vein, I consider the theme of your Forum as not only appropriate, but exciting.”

Speaking from the legal perspective, Mrs. Funke Agbor (SAN) said, “Looking at the port concession programme; when the concession agreement was signed in 2006, the only framework to operate was the NPA Act and there was so much discussion to as whether the Act which had provision for NPA’s right to lease property and assign some of its work to third-party, was sufficient.”

“The question is- are our laws sufficient to support the investment and provide comfort for further investment in the port infrastructure? Ports and Harbours bill, National Transport Commission bill, Sea transport bill, Piracy bill, among others, sitting before the national assembly. These bills are critical to the development of the maritime sector and government agencies have worked so hard to ensure that we have the bills before the National Assembly and the onus lies with the legislative to have the bills implemented” she said.

Funke Agbor stated that the conference was apt because practitioners have to come together regularly to talk on the future of the maritime sector, noting that the programme was more impressive because the young ones were there to learn about the various opportunities in maritime.

“It is important that we have to continue to have this discourse. There is room for all manner of professions in maritime, there are astonishing feats that are being created by engineers in maritime across the globe and Nigerian engineers should be able to contribute immensely if they come in early” she said.

Although these assertions and solutions to developing Nigeria’s port infrastructure seem genuine, the rot in the nation’s port infrastructure can be likened to a syndicate, in the sense that everybody slows down the job in order to get personal benefits. When the vessel arrives, shipping companies begin to count their money before the vessel gets to offload. So the longer it takes you to take your containers away and bring the empty back the more the benefits to the shipping companies and terminal operators irrespective of the cause of the delay.

As long as the roads remain in such dilapidated state that vehicles cannot leave the ports for three to four days to return to the terminal; terminal operators and shipping companies continue to smile to the bank! Even lawyers who called for the appointment of a port economic regulator in the past, have joyfully taken up briefs to dent Nigerian Shippers’ Council’s credibility as the port economic regulator, despite a presidential order. Perhaps, we should accept the deficient legislation which has created loopholes to be exploited; we should also accept the failures of the government agencies and dubious private sector companies. Yes, we can accept these failures, but only as a price for success today as we keep striving forward.

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