By Mike Ebonugwo and Jude Njoku
LAGOS State Governor, Akinwunmi Ambode, recently added his voice to the call for ailing ports in other parts of the country to be revived to enable them take some of the load off Lagos which is presently choking on account of unabating traffic gridlock caused by tankers heading to or leaving the ports at Apapa. According to him: “As it is now, other ports in Nigeria must begin to work immediately to decongest gridlock in Lagos”.
Indeed, Apapa is home to the nation’s busiest seaports, hence the traffic snarl on virtually all the roads leading into and out of the town. It is commonplace to find heavy-duty trailers and articulated vans stuck on the highway for several hours, thereby impeding the free flow of traffic in that axis.
In fact, the traffic jam along the Oshodi-Apapa expressway, has been directly linked to the congestion in both the Apapa and Tin-Can ports. Apart from the problem caused by failed sections of the road, Vanguard learned that the congestion is a fallout of the snail-speed offloading of containers by the port terminal operators and acute shortage of space for the trucks to park while waiting to discharge their consignments.
But the irony is that while the Lagos ports are heavily congested with ships queuing to get port calls to berth, the Eastern ports remain largely idle due to little or no patronage. Apart from the Port at Onne in Rivers State, the other seaports located at Port Harcourt, Calabar, Warri and Koko are, mildly put, existing only in name. Another irony is that most importers who make use of the Lagos Ports have their businesses in the South-South and South East geo-political zones.
Stakeholders in the maritime industry who spoke to Vanguard laid most of the blame for the under-utilization of the Eastern ports on the corridors of the Federal Government and the foreign shipping lines. The government is said to have rolled out policies that have directly and indirectly stiffled the operations of Eastern ports.
Concessioning of ports
Prior to the concessioning of ports to private operators in 2006, the Federal Government gave up to 30 percent discount as incentives to shipping companies willing to use the Eastern ports. Most of these shipping companies jumped at the bait and the result was a boom in operations at the Eastern ports. But this incentive was withdrawn after the concession.
To make things worse, the freight charged for using the Eastern ports was hiked. Stakeholders who spoke to Vanguard in Port Harcourt alleged that these measures were deliberate because government wanted to give undue advantage to the Western ports.
Operator’s perspective: When in September 2013 Vanguard sought the reaction of the Managing Director of Ports and Terminal Operators (Nigeria) Limited, the concessionaire to the premier seaport in Port-Harcourt, Mrs. Lizzie Ovbude, on the matter, she had enumerated some of the constraints the concessionaires were grappling with. She said: “I know that when NPA was still the master sea dock, to improve traffic in the Eastern flank, NPA had to give about 30 percent discount. That was some years back, before the concessioning.
“They gave about 30 percent discount to vessels that are willing to come to the Eastern ports. That was a kind of encouragement to enable vessels to come to this part of the country. But after the concessioning, there has been no such encouragement.”
She alleged that there is a conspiracy by ship owners to stifle the operations of the ports in Port Harcourt. Her words: “For Port Harcourt port, I don’t know whether it is a kind of conspiracy from ship owners; you know that the shipping industry is dominated by foreigners.
“They own the vessels. I do know that we have done a lot of marketing campaigns from Port Harcourt ports here. We have been to clients at Enugu, Aba, Onitsha, Nnewi, that is the Eastern flank, who import through Lagos and made them know that we are actually back. They have shown a lot of interest but one issue we have always had is the vessels to bring such cargo, that is, containerized vessels.
“Before now, we had reached an agreement with two shipping lines who agreed to come and as we were doing the marketing campaign, they suddenly withdrew their vessels. And you know, when you have been to a client once, twice and they are showing interest and suddenly everything goes that way, they will not take you seriously anymore. That is what the shipping companies have made us look like. And up until now, we still have clients that have been calling, making enquires on vessels that could come.
“They are all foreign ship owners and if they say they are not coming, we cannot force them to come. And that is why you see a lot of importers go to Lagos and begin to truck their cargo down.”
Although Mrs. Ovbude agreed that the channels in Port Harcourt Port 1 are not big enough for containerized vessels to berth, she listed efforts made by her company to expand the draught to enable moderately big vessels to come in. She was pissed by the fact that the Federal Government is not doing anything to dredge the port to pave the way for containerized vessels to come to the oldest seaport in the Eastern part of the country.
“They complain about channels but I want to say that even though ships have grown bigger and they want to take comparative advantage of bigger vessels because your cost on a bigger vessel is the same as your cost on a smaller vessel. If you have a bigger vessel that will bring much cargo, you will spread your cost and it becomes lower than when you take a smaller vessel that will bring small cargo, small tonnage; your cost goes higher when you spread it on small tonnage cargo.
“That is an issue: the non-dredging of the channels, the non-dredging of the ports. That is why I said from the beginning that I may not be able to tell you all the constraints because I will talk from the perspective of a port operator but freight forwarders will have their own issue. If you go into the terminal, you will see the extensions we did to be able to achieve a deeper draught to allow for at least moderately sized vessels to come.
“At a point, the facilities became very dilapidated and operations went down. We have also been marketing, telling our clients that the port is no longer what it used to be. We have made it operational once again. When the facilities went down, there were no plants. Today, we have bought kalmar container handling equipment and so the equipment to operate efficiently are there.
Deeper level draught
“The stacking area is there, the berths have been improved because we have extended into the water to achieve some deeper level of draught. Government will need to do something and what government needs to do is, the type of encouragement they gave to shipping companies a few years back; they need to bring it once again,” she stated.
Another issue which the PTOL boss would want the government to look into is the alleged monopoly granted to INTELS Services, the concessionaire for the Onne ports, to handle oil and gas related cargo. She said: “We have been trying to tackle it in the most legitimate manner we think it can be tackled. We have taken the issue to the National Assembly; there has been a public hearing on it and that is the issue of oil and gas related cargo.
INTELS still claims that they are the only ones that have the right to handle oil and gas related cargo. The National Assembly has said that in as much as we are a multi-purpose terminal and the lease agreement we signed with the government has given us the right to handle general cargo, we should not be restricted. And there was an advert from the Ministry of Transport in 2008 specifying that no terminal has monopoly of any cargo.
“We are all concessioned terminals and ports and we have been given a level playing field. So, it is for us to go out and market to our clients and attract as much business as we can into our terminal. But you see, there was one circular that the Nigerian Ports Authority, NPA, issued which was what necessitated our taking the matter to the National Assembly.
“Despite the fact that we were given the status of a multi-purpose terminal which means we can handle any type of cargo, NPA in the circular tried to restrict us and the National Assembly has made it clear that we cannot be restricted. But the foreign importers still fear that if they bring their ship to this place, the ship may be turned back because of that singular circular. What we have been trying to do is to educate them with the circular issued by the Ministry of Transport in 2008, the public hearing on the issue and the House of Representatives resolution that has not given any monopoly for any cargo.”
Vanguard observed that although the operator has tried to improve its berthing facilities, only a few light vessels like fish, salt and wheat vessels discharge at the ports. Rice and cement vessels which used to come, rarely do so due to the hike on duty imposed on them. In fact, the warehouse which was used by Dangote Cement was being dismantled when Vanguard visited the port.
Freight forwarders’ perspective: Freight forwarders who reeled out the challenges facing their operations, accused the Fderal Government of churning out policies that were deliberately targeted at strangulating operations in the Eastern ports. The duo of Mr. Uche Solomon Eluagu and Chief Obi Chima told Vanguard that the disparity in freight charges has greatly impaired the operations of ports in the Eastern flank.
Mr. Eluagu who is the Public Relations Officer of the Association of Nigeria Licensed Customs Agents, ANLCA, Onne Seaport chapter, alleged that the Federal Government is encouraging capital flight to Lagos by its deliberate policy of strangulating the Eastern ports.
He declared: “The government is deliberately strangulating and frustrating the business activities in the Eastern ports, thereby creating capital flight to Lagos. Let me give you a practical example. The question everybody is asking and which is begging for an answer is: ‘What is the rationale behind an importer who is based in Port Harcourt, Aba or Onitsha shipping his cargo to Lagos?’