Making eastern ports attractive

The Managing Director, Nigerian Ports Authority (NPA), Ms Hadiza Bala Usman, says the agency is changing the dynamics of the Eastern ports because of the intractable traffic gridlock in Lagos ports which has continued to hurt port operations. Stakeholders, including port users and investors, among others, are calling on NPA to do more to make the eastern ports  more attractive and thereby become alternatives to the congested Lagos ports, writes OLUWAKEMI DAUDA.

 

Former President, Association of Nigeria Licensed Customs Agents (ANLCA), Prince Olayiwola Shittu, echoed the frustrations of various stakeholders in the maritime industry when he said: “The dependence on the Lagos ports is no longer good for maritime trade. It is overburdening the city and its vibrant residents, as well as amenities, especially roads and bridges.”

Shittu said the parlous state of the nation’s premier ports in Apapa, Lagos, which has been hurting businesses, has necessitated “the Federal Government, NPA and the Lagos State Government doing the right thing for the overall good of our port and the country at large”.

To Shittu, the right thing to do is for the management of the Nigerian Ports Authority (NPA) to look towards the eastern ports, and develop them as alternatives to the nation’s premier ports in Apapa, Lagos.

The ANLCA chief’s call, which resonates with not a few operators and other critical stakeholders in the industry, The Nation learnt, became imperative in view of the seemingly intractable traffic gridlock in and around Apapa ports, which has become a pain in the neck of the NPA, port users, investors and the city’s residents.

More importantly, it was prompted by the existence of other viable, but largely under-developed ports outside Lagos, which in the thinking of industry operators and stakeholders, could be made attractive for business and reduce the pressure on the Lagos ports.

For instance, apart from the Lagos ports, there are seaports at Warri, Koko, Onne, Port Harcourt, Calabar and Ibom Deep Seaport at Ibaka, Akwa Ibom State, which is still at the design stage. There are also numerous inland dry ports and fuel depots.

Unfortunately, the main problem with these ports, The Nation learnt, is that the river channels leading to them are too narrow to accommodate large vessels. The shipping firms find it more convenient to take their vessels to Lagos than to the eastern ports because of the unending restiveness in the area.

The situation, it was also gathered, worsened after the concession of the ports started in 2006. This was sequel to the withdrawal of the 30 per cent incentive granted vessel owners to use the eastern ports when the Federal Government controlled the ports.

Apart from the Onne Port, most of the other ports servicing the Southeast, Southsouth and the Eastern flank of the North are virtually idle.

The channels into these ports need to be dredged, their facilities need to be upgraded and incentives provided to enable them take up more of the nation’s maritime business.

The fact that Lagos State government recently joined in the call for other ports in the eastern parts of the country to be revived to enable them take some of the load off Lagos and make living in the state more bearable for residents underscored the urgent need to turn to the eastern ports for succour.

A maritime lawyer and consultant, Mr Oluwaseyi Muhammed, said because of fear of paying for  delays of vessels, shallow waters and activities of sea robbers, importers and clearing agents are not patronising the eastern ports.

Muhammed said the challenges that have crippled the activities in the four eastern ports of Calabar, Warri, Port Harcourt and Onne have made trade facilitation and life difficult for the importers using the ports.

 

 Other challenges

Apart from shallow channels, which make bigger vessels unable to access the port, decrepit port infrastructure is said to have led to the continued dwindling revenue fortunes of the NPA and other government agencies at the ports.

While the Calabar Port suffers from shallow draught, the Onne Port is contending with insecurity, such as pirate attacks and sea-robbery.

Other identified challenges include deplorable berths, dearths of finger mooring jetties to berth NPA crafts, lack of operational vehicles and fire hydrants at quays.

Cargo handling equipment and the port quays areas are also inadequate to make trade facilitation efficient.

Also, while high siltation at the Calabar Port has impeded safe navigation, the Port Harcourt Port suffered under pirate attacks, which made the port unattractive for foreign shipping lines.

Because of the afore-mentioned challenges, no fewer than 754 vessels, it was learnt, deserted the eastern ports between 2013 and 2018 before the efforts of the NPA to make the port attractive for business.

Specifically, some vessels that berthed at the ports reduced from 2,268 vessels in 2013 to 1,514 in 2016.

According to the National Bureau of Statistics (NBS), some vessels that berthed at the Delta port fell from 609 in 2013 to 433 in 2016, while the Gross Registered Tonnage at the port also dropped from 8,687,160 in 2013 to 6,177,809 in 2018.

 

High level of insecurity

An importer, Mr. Robert Francis, said shipment of cargoes from China to Lagos, which used to cost about $1,500, costs between $4,500 and $5,000 because of insecurity and high salinity of the sea. He therefore urged youths in the area to give peace a chance to make the ports attractive and competitive.

“In addition, vessels calling at Onne Port in Rivers State also slammed $45,000 (N16.2 milion) on importers for an average of six hours per night for delay to berth. The delay, which is estimated at $7,500 per hour, is said to be caused by incessant robbery and shallow port channels,” he said.

Worried by the problems, Transportation Minister, Rotimi Amaechi, at the second stakeholders’ interactive session in Warri, explained that one of the factors militating against the success of the sector was insecurity in the Niger Delta region, which he said, was also hampering the growth and development of the region.

He said Niger Delta was not working because of the people in the area. His words: “How many Lagosians are on the water in Lagos? None. The reason vessels will not come to the eastern ports is because there is no war insurance on vessels because of restiveness in the region.

“War insurance means if the goods cost N10,000 in Lagos, it will get it N20,000 here because there is extra cost on it. There is insecurity in Lagos, but not as bad as it is in the eastern ports.”

A senior government official, Mr. Chidi Izuwah, also expressed worry over the inability of vessels to sail out at night at Onne Port. He regretted that vessels cannot sail out of the port as it is done in Lagos Ports.

 

Low utilisation of eastern ports

NPA Managing Director, Hadiza Bala-Usman, regretted the low utilisation of the Eastern Ports. She said for the Eastern Ports to attract cargo, NPA has improved on infrastructure that would aid port transaction in the zone.

NPA, she said, has awarded the contract for the dredging of Warri Port to make the zone attractive for business. Her words: “There is no need for shippers to en route their cargoes to places where they will find it difficult to reach their warehouses and end users.

“There has been this issue of restiveness in the area, and no investor will like to toy with his or her goods, hence they prefer Lagos Ports where security is guaranteed unlike in the eastern ports.

“Calabar Port is strategically located to service the Northeast and the Northwest, but the link roads to the area from Calabar are bad. Articulated vehicles cannot ply the route.”

The Nation learnt that the Onne Port has been a source of concern to stakeholders, especially shipping companies. For instance, night voyage is absolutely prohibited at Onne Port due to insecurity fuelled by pirate attacks.

The National Council of Managing Directors of Licensed Customs Agents (NCMDLCA) President, Lucky Amiwero, said Nigeria had lost its leadership position to other countries not only because of security lapses, but also because of shallow draft.

 

 NPA takes the gauntlet

Aware of the perennial gridlock in Lagos and determined to change the narrative, the NPA management said it is working with professionals in the sector to make the eastern ports attractive for business.

Last year, the NPA deployed equipment worth over $30 million in Onne Port, Rivers State. The measure, which was taken by Ms Bala-Usman, it was gathered, was to boost efficiency, security and make the port attractive for business. Onne Port Complex is one of the key ports under the NPA. It is situated on the Bonny River Estuary along Ogu Creek.

Findings revealed that six pilot cutters, tug boats and 17 meter offshore patrol boats, have been deployed in the port to make it attractive and stem the cycle of criminalities at the port.

Sources at Onne Port confirmed to The Nation that it cost the NPA more than $30 million to deploy the sophisticated equipment.

One of the sources, a senior NPA official, however, condemned what he described as indiscriminate anchorage of vessels and urged the perpetrators to desist. He urged investors to take advantage of the strategic location of the port, located in one of the largest oil and gas free zones in the world.

Apart from supporting exploration and production for economic activities, the free zone provides a logistic oil service centre for the oil and gas industry in Nigeria (Onshore and Offshore), while also providing easy access to the entire West African and sub-Sahara oil fields.

The official, who declined to have his name in print, assured stakeholders and investors that adequate depth of the channel leading to the port would  be dredged to accommodate big vessels and guarantee adequate security.

Shittu commended the NPA for repositioning the port for greater efficiency. He urged other stakeholders to collaborate with the NPA in its efforts to make the port a hub of maritime.

Another stakeholder, Mr. Felix Abraham, said the deployment of the equipment has assisted the port in taking its rightful position as hub for the East and Central Africa sub-regions in oil and gas and has an advantage of accessibility and proximity to the Eastern commercial centres  like Onitsha, Nnewi and Aba, among others.

“Activities, such as pipe coating, waste treatment and boat building, are provided by companies located in Onne. The port is highly industrialised with modern facilities and equipment that can stand the test of time anywhere.

“It has one of the biggest habour mobile cranes in Africa (Liebherr 600) with a lifting capacity of 208 metric tonnes. Also, 220 Gmk 5220 grove twin cranes that have capacity of lifting single heavy duty cargo of 300 tonnes,” he said.

The Olu of Warri, Ogiame Ikewoli 11, has also called on stakeholders in the Delta Ports to give maximum and unflinching support to NPA management so that the transformation the authority has brought to the region could be sustained.

The paramount ruler pointed out that Calabar Port, which also has the same challenge of shallow draught, has been improved upon by the NPA with the use of Flat Bottom Vessels (FBV) to attract more cargoes to the port in Warri.

Federal Government hands over Warri port to operator.

As part of measures to make the eastern ports attractive for business, the Bureau of Public Enterprises (BPE) recently handed over Terminal B of the Warri Old Port to private concessionaire, Ocean & Cargo Terminal Services Limited.

BPE Director-General Mr. Alex Okoh, who spoke at the handover ceremony, said President Muhammadu Buhari’s administration was committed to a private sector-driven economy.

He also called on local and international businessmen to take advantage of the government’s open door policy to establish businesses in the country.

Okoh said the Nigerian ports are the main gateway to the country and key to the Federal Government’s objective of diversifying and growing the economy.

He pointed out that the objective of the government in port concession was to increase efficiency at the ports with the ultimate goal to modernise the ports and make them more competitive.

The BPE boss said: “The objective is to increase efficiency in our ports, improve service delivery, upgrade and modernise facilities in the ports, reduce the cost of shipping and clearing of goods at the ports and relieve the government of the burden of financing the sector.”

Read Also: Fed Govt’s strategy to decongest seaports, roads

 

According to him, the concession is for a period of 25 years at an annual lease fee of $1,621,500, in addition to the entry fee and monthly throughput fee chargeable on the volume of cargo handled.

Okoh assured that the implementation of the development plan for the concessionaire would be closely monitored by the relevant government agencies, including the NPA, the BPE and Infrastructure Concession Regulatory Commission to ensure compliance.

Why importers prefer Lagos to other ports in the country

Speaking with The Nation Usman said many importers prefer the ports in Lagos to those in other parts of the country because of roads and accessibility.

She said Lagos ports are congested because most of the products imported into the country through them are consumed by residents of Lagos and neighbouring states.

She also spoke on the steps being taken by the NPA to develop other ports in the country.

“As a shipper, you decide where your cargo will go to. Quite a lot of cargo that come into the Lagos area are meant for the Lagos environment, Ogun State, the manufacturing hub, all those industries around and also some that are going to the north,” she said.

“Then, the eastern port, we have Warri port which has a draft of 7.5 meters; we can’t go below that, that is the maximum we can go, we have NNPC pipelines that are buried there so we can’t dredge below that. Then we have the Burutu port, which is moribund.

We are currently at an advance stage of its concession, we have just sent the outline business case to the Infrastructure Concession Regulatory Commission (ICRC), we have investors that are keen to do that as a solid mineral terminal.

“Calabar port has a very widen and long channel, about 180km channels which requires for us to dredge it, to invest about N50 billion to dredge Calabar port. We looked at the revenue generation and traffic and realised that it doesn’t justify us to spend that amount.

“So, we are exploring the use of flat vessel, in December 2018, we had flat vessel come to Calabar port. We have Onne port, Onne is functioning, it has about 10 to 11 meters draft. It was for oil and gas so designated but now it’s meant for all cargo types.

“The other issue that people use to decide where there cargo goes to is also accessibility to the final destination. For example, if you want to take your cargo to Aba, the question is can articulated truck drive from Onne to Aba? Can articulated truck move from Onne to the north? So, those roads that lead from the ports to major towns also need to be passable by articulated trucks. We have written to the ministry of works and highlighted all these roads. We have told the ministry of works to prioritize the repair of all these roads so that they can take larger truck.”

She narrated how the government of Adamawa imported items through Calabar because of proximity but could not access the port as a result of the situation of the roads.

She also explained how she has consistently drawn the attention of the ministry of power, works and housing on the need to make the road accessible.

“Calabar is the closest place to the north-east and north-central part of Nigeria, so you are able to take your cargo faster but there is no good road, there is a bad bridge along that road that prevents trucks from accessing the port. Recently, at the end of 2018, the minister of work awarded that road because I kept pestering him that he needs to award that road and bridge that doesn’t allow truck carrying containers,” she said.

“Adamawa State government imported items through Calabar because its close, when they got to that bridge, they couldn’t pass, these are some of the challenges. Even if you go there, how did you get your things to your final destination?

“In addition, there is the security challenge, people going to the eastern port are challenged because your vessel has to carry war insurance and you need to also hire additional security. So, there is that additional cost that discourage these people from going to the eastern port.

The high rate of pirates operation makes it more unattractive, we have quarterly report from the office of the national security adviser which give details of the security challenges on the water way have reduced our harbour dues by 20 per cent and with that we have been able to have more ships calling more.

In Porthacourt we had recently vessels that have never called and that came in  November last year in Porthacourt and that is something that you can see that because of our keen interest to bring in vessels we actually market and we have spoken with the vessels owners that what do you need and we made sure that  those things are made available.

It is also good we add that in December, two vessels bathed in Onne and also the zise 370LOE that has never bathed in that area for container vessels. And that is also a way for us to ensure that we diversity and encourage the vessels call into this port locations by providing the necessary support we think that they need and with that particular Marskline two vessels calling in Porthacourt they are not bing into Porthacourt container vessels.

“We also looked to ensure that the roads to the interland from ports are also navigable by articulated vehicles because the concern is if you take your cargo to Onne, the road from Onne to Onitsha, Aba navigable by articulated trucks. We have also written to the Ministry of Works so that all that roads in the Eastern Port that are connecting the port to certain commercial hubs the Ministry of Works has been working on awarding those road network to enable us conclude

We have also written to the Ministry of Niger Delta on the to complete the road between the Onne port and the Port Harcourt is in a very bad state.

The Minister of Niger Delta has committed by ensuring it is in the 2020 budget,” Usman said.

 

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