Terminal operators at Nigerian sea ports have in the last eight years, lost N58.9bn, a 2016 industry report by Deloitte has said.
The report, which was made available to the press, said the loss was due to a combination of factors which include rising Consumer Price Index and the terminal handling charges which have remained largely unchanged since 2006, among other things.
It said, “While the THC have remained largely unchanged, the CPI for Nigeria, has increased by 119 per cent within the same time frame.
“At concession, dollar to naira rate was $1 to N151 (parallel market). However, the rate is now much higher. There has been no change in the terminal operator’s charges as well as no element of CPI adjustment.
“The effect of the exchange rate has not been applied on THC since the concession agreements were signed. Average estimated loss over the years amounted to N58.9bn.”
It added that an adjustment of the CPI of Nigeria and the foreign exchange fluctuation on the THC shows that the THC should be charged at a 238 per cent increase on its present fees, which would put it at N153,780 instead of instead of N45,500.
The report said the exchange rate had affected the business of the terminal operators in the payment of government fees as most of the commitments of the terminal operators were in dollars.
“The terminal operators have lost potential revenue when yearly THC is converted to dollars. THC value in 2006 ($211) is higher than THC value in February 2016 ($138).
“This loss in the dollar value of the THC is due to the fluctuations of the dollar to naira rate and is estimated to be about N89.8bn for the industry from 2007 to 2015,” the report said.
It added that the gains in throughput volume and implementation of efficient productivity measures had been the major positive contributors to the sustained revenue growth of the terminal operators.
The report described throughput volumes as a major driver of revenues to NPA from Terminal Operators. It said the actual throughput volume was 21 per cent more than the projected volume which was due to the efficiency of terminal operators.
“This efficiency has impacted on throughput fees, $16 per TEU, earned by NPA which is approximated at $28.6m increase over the years.
“Investments made by the NPA in terms of improved provision of marine services and expansion of existing port facilities in order to accommodate increased vessel traffic coupled with the massive investments made by the terminal operators have helped to free up congestion and increase activity at the ports,” the report added.
The spokesperson for the Seaport Terminal Operators Association of Nigeria, Mr. Bolaji Akinola, described the current situation as a dire one.
He said, “Inflation and depreciation of the naira has eroded our earnings as terminal operators by more than 300 per cent. For instance, our salaries and overhead between 2006 and now have gone up by over 1000 per cent, yet our earnings have been reduced by threefold when you benchmark it against the 2006 earnings.
“What we are earning now is even below what we earned in 2006 especially against the current value of the naira. This is the reality on ground and again, there is no volume.”
Akinola added that certain government policies had contributed to taking cargo away from Nigerian ports. He said there was a need for urgent measures as it would be difficult for STOAN members to continue operations under the present circumstance.
The Executive Secretary of the Nigeria Shippers Council, Mr. Hassan Bello, could not be reached for comments. He did not pick his calls or reply a text message.
PUNCH
