Special Report

September 30, 2013

Why eastern ports are lying fallow (2)

Why eastern ports are lying fallow (2)

Mrs. Lizzie Ovbude, MD, PTON Ltd

By Jude Njoku

This is the concluding part of the special report on the abandonment of the eastern ports. The first part was published  Friday.

HE finds it very convenient to clear the cargo in Lagos and spends about N300,000 or more to bring it to
this part of the country and still makes profits.

This is the question we keep asking everyday. The reasons are not far-fetched. The first is the difference in freight charges. The government should look into creating a level playground that will encourage other ports.

Mrs. Lizzie Ovbude, MD, PTON Ltd

We have Port Harcourt Port 1, we have Onne, we have Calabar and Warri. The only port that is functional is Onne. The other ports have been lying fallow and yet some people will go to the media and tell us that activities in the ports are causing congestion in Lagos. I see the whole thing as political by those who dominate the maritime industry.

For instance, there are so many ships out there in Lagos waiting port call to berth. Most of the stakeholders in the maritime industry use Lagos as a hub to perpetrate their political manipulation to favour the western ports. If the government is serious about creating a level playing ground, they would have done something about the difference in freight charges.”

He alleged that the difference in freight charges between using the eastern ports and the ports in Lagos oscillates between US$2,000 and US$3,000. “The importer gains about $2,000- $3,000. But if it is a uniform thing, you make a choice based on nearness to your warehouse or your market

Because of this freight differential, most importers find it very convenient and some of them are forced to market their goods in Lagos because already, the incentives are there because of government’s policies.

Uniform freight

“We have tried, we have made representations to the government but they fell on deaf ears. It has created a lot of unemployment because if the ports are busy, the youths in this area will be busy. They are making us to believe that they are doing something, whereas they are doing nothing. If the freight is uniform, it will go a long way to allow importers to decide where to ship their goods to.”

Eluagu alleged that the duty inspection agent in the eastern port, Messrs SGS is only interested in hiking the duty paid to enhance the value of its one percent commission.  He notes, “Another area we need to look at is the scanning agents, that is SGS. SGS has contributed to capital flight to Lagos. SGS is only interested in their one percent. We have Cotecna in Lagos, we have Global Scan and SGS.

But I tell you, importer A and importer B go to one manufacturer. Let’s assume that importer A is in Port Harcourt while importer B is in Lagos. They buy from one manufacturer at the same exchange rate. Importer B that is in Lagos already has an unfair advantage because of the freight difference.

Importer A that is Port Harcourt is being affected because of the freight difference, yet the duty importer B pays in Lagos is by far lower than what importer A will pay in Port Harcourt. They don’t have the synergy to try to balance the duty.

“Cotecna might give you a duty of $100,000 while SGS will give you a duty of $300,000. If you are an importer, what will you do? You would want to use where you can make more profit. It has made a lot of Customs agents to lose their customers. They would tell you, look, I don’t know what you people are doing here in Port Harcourt. If SGS meant well, they would have listened to us because we have made representations to them using both the print and electronic media, yet those who are behind SGS make sure that SGS is doing what they want to do.

Because of these factors, we have lost almost 60 percent of our customers to Lagos ports. That is a major problem we are facing here. The volume has dropped. Sometime ago, the Federal. Ministry of Finance announced that they would swap the inspection agents but SGS was retained. What is their reason for retaining SGS? I don’t know but I see it as political.”

Internet providers: The alleged poor services provided by the internet service providers was also highlighted by Mr. Eluagu as a major factor affecting their activities. He said, “When you look at the internet service provider called Web Fountain, it operates at its lowest ebb. Their server is always off.

“As I speak with you now, their server has been out of service for the past four days. But we were meant to understand that their server works 24 hours in Abuja. They don’t keep to the concession agreement with the Federal Government and yet nobody cares. The ultimate loser is the importer. So when you look at all these issues, you will discover that the government is not helping us. There are a lot of issues that sometimes, I begin to ask myself whether we are in the same country.

“Why is it that Lagos enjoys all these incentives more than any other port; why is everything in Lagos while other ports are lying fallow? If you go to Calabar, it is lying fallow, go to Warri ports, it is lying fallow, Area 1 here is lying fallow. Who are those behind this strangulation of the Eastern ports? If you go to Lagos now, there are many ships queuing to berth but here is empty. Roro vessels cannot come to the eastern ports; they only came twice in the past 10 years. Are they now saying that we cannot have Roro vessels here? The same thing applies to vehicles; prices of vehicles here are higher because of the freight difference.”

Conspiracy to cripple terminal operator

Corroborating the views canvassed by the ANLCA image maker, the Senior Special Assistant to the National President of ANLCA on Customs affairs, Chief Obi Chima, told Vanguard that the last time a container vessel called at the Port Harcourt seaport was in 2003. Chima who is the immediate past Chairman of ANLCA Port Harcourt Port 1 alleged that there there is a conspiracy to cripple the indigenous terminal operator.

He said, “Right now, the indigenous company, Ports and Terminal Operations (Nigeria) Limited is suffering from the conspiracy of the multinationals in the sense that no container vessel comes to that terminal operated by an indigenous company. If you go there, what you will see are fish vessels, cement, wheat and at times, you see oil vessels, whereas the full container vessels come to Onne.

“For Port Harcourt Port 1, since the take over by PTOL, every effort has been made to bring containerized cargo there but the conspiracy of the whites who are involved, have not allowed that to be. Apart from that, the Federal government is not paying attention to that side of the ports. Dredging of the channels to the Port Harcourt harbour has been a very big problem because the port is not very deep. The draught in that port cannot take bigger vessels like the one at Onne because of the dredging. The harbour itself is okay, the harbour there is about 11.5 but the channels are very shallow that big vessels cannot operate there.”

We are not to blame—Customs

Reacting to the poor utilisation of eastern ports, their image maker in Port-Harcourt Area 1, Mr. Harry Samuel, explained that the agency was working in tandem with the mandate given to them by their comptroller-general. According to him, the Command does not place an extra burden on the importers or their clearing agents. He agreed that the ports are not adequately utilized but was quick to exonerate the Customs from complicity in the whole matter. “We work with the tariff already given and known to them, (importers)”, he said.

NPA, INTELS keep mum: Efforts to speak to both the Ports Manager and officials of INTELS at Onne, after a tortuous journey to the port were rebuffed by staff of the two organisations. At the NPA office located at the Federal Lighter Terminal, FLT, Vanguard was asked to bring a letter from the company before any interview could be granted. An officer in the Public Affairs department, Mrs E. Umegbolu explained that it was a normal procedure and cannot be waived.

The ports

The Onne Port Complex is situated along Bonny Estuary on Ogu Creek which is about 25 kilometres south of Port Harcourt, RiversState. The geographical area of the port spans between NAFCON (now NOTORE) Jetty and BonnyIsland. It criss-crosses three local government areas of RiversState, namely: Eleme, Ogu-Bolo and Bonny. The land area of approximately 2,500 hectres is situated on the soil of Eleme Local Government Area while the channel to the Port along Bonny River and Ogu Creek within Bonny and Ogu-Bolo Local Government Areas.

There are two major Terminal facilities at Onne Port Complex. These are the Federal Ocean Terminal,  FOT  and the Federal Lighter Terminal, FLT. FOT has a total quay length of 750 meters, that is three berths out of the original design of six berths while construction work is ongoing on the remaining three berths to bring the total quay length to 1,500 meter.

On the other hand, FLT has a total quay length quay length of 1,670 meters.