By Mike Ebonugwo and Jude Njoku
…Why Eastern, Delta ports are idle
BUT the belief in many quarters is that the Eastern ports are largely not viable and a liability due largely to their lack of accessibilty by large vessels. For this reason they depend on the revenue generated from the Western ports to still remain in existence. There is also the claim that the NPA had over the years spent so much money to upgrade their infrastructure with nothing to show for it. For instance, it is said that successive managements of the NPA had over the years sunk billions of naira into the dredging of the Calabar Port. According to reports, the sum of $56 million was spent in 2006 to dredge the port, while N20 billion was spent in 2014 for the same purpose.
But a national affairs commentator, Ifeanyi Izeze, would want the Transport Minister, Chibuike Amaechi, to find out why the huge amount spent on capital dredging at the Calabar Port “is not translating in the amount spent on the more frequent maintenance dredging?”, adding: “If you are familiar with the procedure, except it is capital dredging, cost of maintenance dredging should not be so high.
“Also, why is the maintenance dredging exercise unnecessarily delayed instead of doing it as and when due or even before in order to get the desired results? How do you explain a situation where there is usually a time lag between the pre-dredging survey and the actual dredging? Most of the survey data used in the maintenance dredging are unreliable as a result of the delay.” He said he finds “pronouncements by some top government functionaries that the crippled activities at Eastern ports of Calabar, Warri, Port Harcourt and Onne have consistently made them liabilities on Nigerian Ports Authority, NPA, for almost three decades now” rather provocative. And he also would want an answer to this poser: “If indeed there was a concession agreement that all oil and gas cargoes should be brought to Warri, Onne and Calabar, how do you explain that a bigger chunk of that assignment is currently being diverted to facilities in Lagos?” Answering his own question, he said: “The sole purpose of this arrangement was to ensure that there was no loss of revenue due to mis-declaration of goods at undesignated terminals such as declaring oil and gas pipes as water pipes and paying less import duty.
“Adducing security challenges as the cause for the current abysmal economic performance of the Eastern ports is at best diversionary. Security issues are in no way peculiar to that part of the country. It is a problem in the entire Gulf of Guinea which also includes Lagos maritime channels.”
Security challenges: It was on the basis of this he had appealed to the Minister of Transport,to intervene to save the Eastern ports. And seemingly by way of a response, the minister had been quoted as vowing to take steps to ensure that the Eastern ports are revived to make them attractive to importers. This, he added, will go a long way in enhancing their economic viability and revenue generating capacities.
But the argument about different freight charges still persists. It was an argument Mrs. Ovbude and co would want government to address. According to her: “We have Port Harcourt Port 1, we have Onne, we have Calabar and Warri. Most of these ports are lying fallow and yet some people will go to the media and tell us that activities in the ports are causing congestion in Lagos.
“There are so many ships out there in Lagos waiting port call to berth. If government is serious about creating a level playing ground, they would have done something about the difference in freight charges.”
She alleged at the time 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.
“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 also alleged then 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 said: “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 in 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.
“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.
Empty Eastern ports
“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. 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 at the time 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 foreigners who are involved, has 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 then, 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 at the time 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 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, Rivers State. The geographical area of the port spans between NAFCON (now NOTORE) Jetty and Bonny Island. It criss-crosses three local government areas of Rivers State, namely: Eleme, Ogu-Bolo and Bonny. The land area of approximately 2,500 hectares 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.
We’re working on increasing traffic in Eastern ports — Bala Usman, NPA MD
BUT responding to the crisis at the Lagos ports, the Managing Director of the Nigerian Ports Authority, NPA, Hadiza Bala Usman, asked that the Federal Government declare an emergency on roads in the Apapa Area of Lagos. She said this was necessary so that there would be an improvement in the condition of access roads into Apapa Ports.
Usman informed last year that the Authority had captured in its budget the infrastructural development programme that will facilitate channel dredging and provision of modern equipment in the affected Eastern ports.
She was also quoted as dismissing insinuations that the traffic congestion in Apapa was caused by lack of capacity of terminals at the ports to receive the volume of cargo that comes into the country. Arguing that this was not possible, she informed thus: “At the peak of cargo reception in 2014, cargo throughput was put at 84,951,927 MT; we did not have the type of congestion that we had in 2017 when we only did 71, 776, 545MT. This is to show you that the volume of cargo is not the reason why we have this situation”.
She also blamed infrastructure decay in the area for the problem, while making a case for the introduction of inter-modal means of transportation within the ports.
“There is no way you can move 90 percent of cargo coming into the country by road and expect the required level of efficiency. This is because more than the attendant traffic congestion, you will also see that the roads cannot be durable because of the heavy tonnage of the trucks. The only sustainable way for effective cargo evacuation is, therefore, the use of roads, rails and water to move cargo into the hinterland,” she said.
On the Eastern Ports, Bala Usman informed that the NPA is already speeding the process of ensuring that traffic increases in the ports at Warri, Onne, Port Harcourt and Calabar
Bala Usman did not spare shipping companies, as she insisted that they must comply with the utlilisation of holding bays even as the authority.