Why Concession Agreement Review Remains Inconclusive

Why Concession Agreement Review Remains Inconclusive
Mr Dayo Balogun

Mr. Dayo Balogun is the Chief Executive Officer of ECM Terminals Limited in this chat with MMS Plus speaks on areas the current leadership of the Nigerian Ports Authority(NPA) should focus for legacies and ports efficiency in Nigeria.

On Calabor Port Dredging, Are You In Discussion With NPA?

Not at all. We can only rely on what they tell us, until we see dredgers on the channel, I think every other effort is a work in progress,  because until we see the contract awarded,  the identity of the contractor known,  the duration of the contract mentioned, the completion date is known,  then we can say the dredging contract has been awarded. 

Don’t You Think Calabar Port Dredging Should Be  Used As An Assessment Parameters To Assess The Performance Of NPA And The Minister?

Well, unfortunately, we are not privy to their performance appraisal templates, so it’s difficult to make that conjecture, we don’t know what,  I’m not aware where an agenda was set and the dredging of Calabar Port was included as part of his agenda.  Though as public servants, they are accountable to the public, but in this country,  I don’t know of any minister who was presented with an agenda to say you must achieve this and all of that,  so that has not been our culture,  so this is very unfortunate.

So it’s difficult to use that as a parameter to measure his performance in office because if you do not set an agenda or he himself will not make it an agenda, then to hold him accountable for it,  it will be a bit unfair. 

So the only thing one can say is if he does it, it becomes part of his own legacies,  so and which is still within the purview of his own decision and possibly the resources available to him and also his commitment as well to the eastern ports, Calabar Ports is quite strategic.

This is a country where the Minister of Education will come in with schools shut,  and by the time he leaves office, the schools still remain shut.  So, what are we talking about?  We do not have that culture of setting an agenda for our public servants, so and for me,  if you do not set something as an agenda,  it will be difficult for me to hold you accountable for it,  but even in his own wisdom,  he thinks that the Calabar Port dredging is a priority that must be accomplished,  then that would be good news. 

So far, as we speak,  nothing on the ground other than we are working on it, we are working on it, it’s all work in progress, and until we see the dredgers on the channels with the details of full disclosures of the dredging contract,  probably because I mean it’s a public fund,  the public deserves to know what is being done,  then it is only then we can now take pictures and say okay,  we can point at actually the dredging contract that has been awarded, but for us as a terminal operator,  until we see the dredgers on site,  every other thing is just rhetoric. 

The Last Time We Talked, We Talked About The Good News From The Calabar Port, Despite The Dredging Limitation And All That. I Want To Believe The Performance Projection Of The Throughput For This Year May  Surpass Last Year’s. 

That will not be correct because today as we speak, Calabar Port is not on the shipping world, it’s not on the shipping map.  Tell me which container liner comes to Calabar, you have been in the industry for a long time, every vessel publishes their sailing schedule, tell me which container liner has a sailing schedule that goes to Calabar, none.

So, we are totally cut off from the shipping world when you talk about the container business, no container liner service today,  on a regular basis,  the vessels that are comes are either vessels or dry bulk and maybe liquid bulk,  but in terms of container and regular liner service, no container.

Calabar is cut off because of the dredging.You all know the challenges because, with a shallow draft there are limitations. Shipping has evolved, and because of the evolution,  they involve bigger tonnages,  and bigger tonnages require deeper drafts,  so what type of tonnage come to a draft of 5.4 meters at the low tide and 6.4 meters at high tide? And beyond that is the image of this country, in terms of respecting contracts.  You see, there are things we do not place emphasis on.  Integrity is everything,  for me,  that is the way we see things as a profession,  then an institution lacks integrity,  then it lacks everything.  If you enter an agreement,  and you cannot keep to that agreement, then tell me,  what is the essence?  How do people see you?  This is privatization that was super-intended by the World Bank,  and you enter an agreement,  well documented,  that you are going to keep the channel at 9.4 meters,  and 15 years down the line,  you have not done that,  all you do is go give excuses that are very pedestrian,  if you have issues with contract and all of that, how?  Meanwhile, because the concession provides obligations on both parties,  yes,  I made a projection based on 9.4 meters,  I’m paying you based on 9.4 meters, but you are giving me 5.4 meters,  so we should be able to also look at it from the integrity perspective, that is, if a government should enter an agreement,  and is not able to honour it, it raises issues about integrity.  On the other hand, we are talking about foreign investors, tell me, how do you encourage foreign investors,  when you show a total lack of respect for a contract agreement that is well documented,  written in black and white,  as superintended by the World Bank?   

Calabar port is underperforming because of the dredging issue, it’s not able to realize its potential.  Like I just mentioned,  you do not have a regular container liner coming to Calabar,  yes,  so if you are a shipper from the captive market of the 16 northern states that are very close to Calabar,  the commercial cities that are very close,  and the neighbouring agrarian communities of the middle-belts,  you have to go through Lagos or go through Port Harcourt,  because  the logistic convenience of accessing that internal connectivity to the nearest ports,  it’s not there,  it’s non-existent.  So how much revenue is this country losing by that, in terms of employment generation as well?  So,look at it in terms of the socio-economic benefits.   Why is Calabar port and Tinapa in comatose?  The Calabar Free Trade Zone is the premier free trade zone authority in this country, go there, it is a dead zone, because of the absence of a regular liner service, today.  Calabar Port is not on the shipping market, so what are we talking about?

I’m Just Wondering, We Have Been Talking About the Review Of Port Concession Agreements, What Review Are We Looking At In The Case Of Calabar?

 Well, in terms of the review, I would say that it is a welcome development, because even in a journey, after a period you pause and do an evaluation, we all know that the landlocked model of port privatization is new, so if after a period of time, there was a need to pause and do an evaluation of how far the journey has gone, I think it’s a welcome development.

But then the review has been ongoing, and as we speak, it still remains inconclusive, so that is where we are. The review was supposed to take into cognizance some of these challenges, award compensation and probably penalties, and also ensure that the parties are held accountable for their obligations, but then it’s been a work in progress, till now as we speak, it’s still not conclusive. 

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