Dr. Eugene Nweke is a former President, National Association of Government Approved Freight Forwarders (NAGAFF). In this exclusive interview with MMS Plus newspaper, he bares his mind on a myriad of port sector issues including the flaws in the port concession arrangement, absence of performance evaluation, influx of arbitrary charges, the prolonged delay and potentials of the National Transport Commission (NTC) bill.
Recently you talked about the need for annual performance evaluation of the ports in the post concession era. How would such appraisal address the numerous challenges at Nigerian ports today?
If you go through Section 6 of the agreement, it addressed the issue regarding tariffs to be charged by the port concessionaries. It also serves as a caveat that there can’t be any increment without the consent of the Nigerian Shippers Council (NSC). They must first consult NSC who will convene a meeting where stakeholders will look at the new charges against the old charges, but unfortunately that have never happened.
What we have presently is arbitrary charges; charges without cost function. Port concessionaries just come up with a tariff, impose it and charge. Imposition of charges is not acceptable in any given port arrangement, whatever charges that arise must pass through the Shippers’ Council, and this is to avoid charges being at the detriment of consumer price index, because any rise in charges would have an impact on the end users of the product.
Shippers Council as the port economic regulator should look at the impact of the charge before it is approved or rejected. All these are in the provision of the agreement. It is also the duty of the NSC to look at charges that are not within the premise of the concession agreement. Any other tariff or charge no matter the nomenclature given to it must have a definition.
For example, if you’re charging for offloading, what is the definition of offloading, your definition of offloading might be different from mine. It is the duty of NSC to ratify that definition in order to avoid extortion under the said definition. That is why an economic regulator is needed in every decision at the port.
The concession agreement has defined what delivery charge is. It states that delivery charge is the action of moving a container from the quay, taking the container to the stack then dropping it for examination and then loading it for delivery outward. Once the container goes outside the gate the definition of delivery charge comes in but these people through whatever conspiracy with Nigerian Port Authority (NPA) came up with terminal handling charges, meanwhile terminal handling charge is not a Nigerian term. It’s a term that was borrowed in 2003 when NPA were unable to position container because they lacked manpower and equipment so the shipping line bringing cargo to Nigeria said if we drop cargo by ourself we’re going to charge for terminal handling charge which in Nigeria is known as terminal delivery charge. If you check the concession agreement you’ll see where it is written delivery charge but not terminal delivery charge The amount stated for delivery charge is about N6, 000 but they came up with terminal handling charge without giving it any definition and they’re also imposing it on people. They first charged about N60, 000 when they started, it has increased to about N70, 000 to N80, 000 per TEU.
These problems underscore the need for an annual performance evaluation and also emphasizes the role of an economic regulator at the port; but NSC lacks legal backing. Isn’t this a major limitation?
An economic regulator like Shippers Council must not function without legal backing or an Establishing Act. If we allow all these arbitrary charges to exist the ports will continue to be unfriendly, unpredictable and will lack competitiveness.
Remember there is still an issue at the court waiting for judgement and with the nature of our court system it can go on for a long while. There was a time an Appeal Court judgement instructed seaport terminals to refund arbitrary charges collected since the port concession but what has happened?
Maybe we need to ask the Shippers Council. Going forward, what should be the role of an economic port regulator, their role is to not only to supervise and monitor but to ensure that tariff setting system meets international best practices as stated by the regulator, protect the well being of Nigerians, help the government curtail the effect of influx and stop extortion.
I recall during the port concession debate, the first thing I called their attention to was that if we’re going to use the landlord port model, let us also consider the implications of giving our port to a first generation terminal operator by global recommendation except in a case we have zero tolerance to corruption.
Nigeria shouldn’t have given our ports to first generation terminal operators because we don’t have zero tolerance to corruption.
What these top multinationals do is utilize their shipping company affiliate. They will be the ones to bring in the cargoes, determine everything in terms of shipping rates and terminal handling, so alot of swindling usually happens. It could also breed security issues.
As the port economic regulator, NSC should look at the registered books, records and transactions in order to know the money that should be repatriated or not. These are some of the issues the federal government needs to look at. They must give NSC the necessary tools needed to act. That is also why we’re clamoring for the transition of NSC into National Transport Commission (NTC) but this has been stepped aside.
Is there still hope for NTC after the President’s refusal to give assent?
If the National Assembly does its work and sends the NTC bill to the Presidency for assent and he refused, are they going to just leave it like that? Do they just go the floor of the house for funfair? They ought to call Mr. President and insist that they made the bill for Nigerians. They should make adjustments to address the President’s concerns and reposition the bill to get the President’s approval to become a law.
I expected the legislature to go back to the President and bring forth the bill for amendment because the bill was made for the people and not for personal interest of anyone. Government should know its responsiveness to the industry and to the larger populace.
Do you think the change in legislative administration might have caused the delay?
Government is supposed to be a continuum but here in Nigeria it’s different. That is the reason we keep having elephant projects that are abandoned. A change in administration should not make a project to be abandoned, it’s callousness and carelessness. Most of the new legislative members were also in the previous assembly so these bills are not new to them. They ought to be inspired to represent the people equitably and fairly.
There have been allegations of abuse Standard Organization of Nigeria’s (SON) Conformity Assessment Programme, SONCAP. What’s your take on this?
I’ve been called so many names regarding this issue. I made some comments in the past just to draw the attention of the agency to some problematic issues in their operations. Some of their services no longer meet the needs of the people or the purposes for which those services were introduced.
Unfortunately, in Nigeria saying the truth is always a problem. If you say the truth and it is against an agency, the organization will gather an army of analysts and industry experts to go to the press to tackle you back.
The truth is that I didn’t just start this issue, it’s the shippers and freight forwarders that said SONCAP should be revamped. These people travelled to China and came back with their findings, what our people did over there and what China said about ISO. After a study of what we have in SON, a lot of things were revealed that are obviously wrong and that is why we will continue to have influx of substandard products.
A situation where SON intercepts substandard tyres and it’s reported in the media is just one out of many that successfully enter Nigerian markets. So, who is SON deceiving? We need to manage these things like we proposed in the last meeting we had. It’s not like we’re trying to engage fireworks with SON, we appreciate them and we know their importance in any nation. We know where they got it wrong administratively but we can’t be afraid to speak the truth at this level to officers appointed to serve the nation. The office of Director General of SON is a table, so if we’re addressing an issue it’s to the office and not about the person occupying it.
What we have resolved to do is to first conduct a detailed finding that SON would go through and if they have any complain they will get back to us and that’s our agreement but if they fail to get back to us, we’ll respond to some of the issues in the press to show that we’re leaders and that we only alerted then concerning the issues but they took it the other way.
For example, when we requested for resignation of head of some maritime agencies following incessant barge accidents leading to colossal losses. It’s not as if we will be the ones to occupy that position if they eventually resigned. What we were actually doing was to put them on their toes. It is simply an advocacy approach. This is a vibrant and sensitive industry, so people should be allowed to speak on pertinent issues and also call public office holders to order using legitimate means. There’s a need for change.
Dr. Boniface Aniebonam is the Founder of the National Association of Government Approved Freight Forwarders …