57 Years of Policy Inconsistencies in Maritime Sector

Eromosele Abiodun posits that the Nigerian maritime sector has been held back by corruption and policy inconsistencies despite the gains of port concessions

Five days ago, Nigeria celebrated its 57th independence anniversary, a yearly ritual to mark years of self rule. And like many sectors of the economy, the maritime sector is as old as the country itself. Just like the country is facing many problems, the maritime sector is also bedeviled by many challenges that look impossible to resolve.

Oil was discovered in commercial quantities in Nigeria in 1956, four years before independence. Before then, maritime activities in Nigeria had largely been stimulated and sustained by export of agricultural products and solid minerals for earning of foreign exchange. The leading agricultural exports then were groundnuts, cocoa, palm produce and rubber. With the discovery of oil in 1956 at Oloibiri by Anglo-Dutch consortium, Shell D’Arcy, the oil and gas sector become the main driver of the economy and of maritime activities in Nigeria.

The state of the ports is a critical factor for efficient maritime operations. Hence the establishment of the Nigerian Ports Authority (NPA) by Ports Acts (Cap 155 LFN 1954) was to create a structural framework for the management and regulation of port operations. The authority executed its first wharf extension project between 1956 and 1961 in Lagos and Port Harcourt ports. Further expansions of Lagos Ports were done between 1970 and 1975, while in 1977, the Tin-Can Island Port Complex was inaugurated to ease the pressure of heavy imports (mostly government cargoes) on Apapa Port. In 1979, the new Warri and new Calabar ports were commissioned. Port construction and expansion continued between 1981 and 1985; the new Sapele port was constructed in 1982. In 1996, Federal Ocean Terminal Onne Phase 1 was constructed. Financing was done through agreement with the International Bank of Reconstruction and Development and the World Bank.

Reliable statistics in the mid-1980s showed that the public ports operated at 47 per cent of their capacity at the best and cargo throughput dropped down to 28.7 per cent of previous years. To increase efficiency, enhance capacity and introduce healthy competition in government enterprise. Government in 1988 promulgated the Privatization and Commercialization Decree. In 1993, the implementation of the commercialization programme of the NPA was partially carried out and it became Nigerian Ports Plc. This was reversed in 1996 as a result of inherent weakness of the policy and government, through the National Council on Privatisation (NCP), upgraded the state of NPA from full commercialisation to partial privatisation called concession, to make room for private sector involvement in port operations.

Following the calamitous multi-year port congestion that gripped the nation’s ports and arrested Nigeria’s development for much of the oil boom years of the 70s, the federal government made efforts to reform the system. The efforts never yielded any reasonable fruits as corruption and inefficiency reigned, denying government the needed revenue from the sector.

As a result of the painful experiences of congestion in the 70’s, the federal government made again made efforts to reform the Nigerian Ports Authority (NPA) in the 1980s.

Consequently, the NPA Management was restructured into 4 zones: Western, Central, Eastern and Headquarters, The government also created Nigerian Ports Plc. However, the policy failed abysmally due to rear-guard action from the diehard culture of centralisation. Government interference was rife and patronage and self-enrichment by some government officials overseeing chunks of the maritime sector went to a new level. Foreign exchange earnings from Nigerian Ports Plc disappeared into private pockets and port infrastructure were allowed to rot.

In a bid to arrest the situation, the federal government in 2001 came up with the idea of concessioning the ports to qualified private operators.

Dutch firm Royal Haskoning BV was com- missioned to study Nigerian ports preparatory to the reform.

The resulting report, called Haskoning Study was submitted to the federal government and was accepted as a cogent x-ray of the Nigerian seaport system. The report criticised the overcentralisation of administration that saw NPA function as both regulator and operator, the overlap of authority in the system and the duplication of efforts. It recommended a “Landlord” port administration model where government’s role would be restricted to policy formulation while private operators undertake the day to day running of terminal operations, stevedoring, warehousing; and investments in port equipment and infrastructure, among other activities. The report called for NPA to be unbundled into three zones and for concessions by open bidding.

After examining the report, the National Council on Privatisation (NCP), endorsed the “landlord” model, and under a new transport policy, NPA was given the role technical regulator to manage the ports for which there were no bids. The National Transport Commission (NTC) was to become commercial regulator while National Ports Commission would become overall coordinating agency for the ports sector. Five landlord port authorities were slated for Lagos; the Niger Delta; Port Harcourt; Calabar; and the inland ports. A total of 25 concessions were identified in 11 ports and there were bids from 110 companies to manage eight ports: Bonny, Calabar, Koko, Port Harcourt, Sapele, Apapa, Tin Can & RORO.

With bids submitted by March 2005, concession commenced in 2006 with 20 concessions concluded. In March 2006 the concessionaires commenced operations.

The flagship concession, Apapa Container Terminal was signed in March 2006 with APM Terminals, which had taken over P&O Nedlloyd earlier in the year. The Danish shipping firm, A.P. Moller (APM Terminals’ parent company beat 25 other bidders to the 25-year concession.

Doing Business in the Ports Prior to the concession of ports to private operators in 2006, doing business in the nation’s ports was a hellish experience laced with a myriad of problems.

One of such major problem was the turnaround time for ships which took too long making businesses to brace themselves for weeks if not months of endless waiting before their cargo could be loaded or discharged.

Most of the few cargo-handling facilities owned by the NPA were moribund, so ship- ping companies had to hire such facilities from private sector sources, leading to extra costs. Dwell time for goods in port was so long that overtime cargo filled the most active seaports and led to massive port congestion. Labour for ship work was controlled by a mafia that controlled dockworker unions and had no scruples supplying less than the manpower paid for. Many port premises that could have been put to good use were abandoned, giving maritime businesses less options.

Decaying infrastructure In recent years however, essential infrastructure has been left to rot leading to the loss of life and properties. For instance, in the last few months, two tragic incidents have occurred that indicate the situation in Apapa is reaching implosion point, and these are the stoning to death of a LASTMA officer and the burning of banks.

Both incidents are directly related to the traffic gridlock in Apapa and are the products of the frustrations and stresses being borne by truck and tanker drivers.

The first was the murder of the LASTMA officer, allegedly by some tanker drivers protesting the death of one of their motor boys they blamed on LASTMA officers trying to seize a tanker for wrong parking.

The second and most disturbing was the burning of two banks and destruction of other business premises by some truck drivers protesting the killing of a truck driver by a policeman for wrong parking.

With numerous petroleum tank farms in Apapa, no one knows what will trigger the next altercation over the traffic gridlock that can cause massive destruction in Apapa.

Regarding how to resolve the ongoing traffic gridlock in Apapa, Lagos State, we may have started on a wrong premise and will end up with a wrong conclusion or solution going forward.

Apapa is home to Nigeria’s key ports (Apapa and Tin Can), numerous petroleum tank farms, national dailies (THISDAY Newspaper and BusinessDay), numerous manufacturing concerns, businesses and residents.

For the last few years (critically last two months), Apapa has been a no-go for visitors, hellish for those who reside and work there, and traumatic for business owners and those exporting or importing cargo.

The primary reason for the traffic gridlock, experts said, has been the complete collapse of the 2km Wharf Road which leads from the base of Ijora Bridge entering into Apapa to the entrance of Apapa Port.

This, the experts believe, has resulted in a backlog of trucks and tankers on the Ijora Bridge, sometimes all the way to Western Avenue, making it difficult for other road users going in and out of Apapa.

“Likewise, the only other access road out of Apapa through the Liverpool Overhead Bridge and Apapa-Mile 2 Expressway is similarly in a state of complete disrepair and blocked by trucks and tankers,” said a leading operator who do not want his name in print.

Wrong Premise He added: “The wrong premise that we have started with is that fixing these roads, Wharf Road and the Apapa – Mile 2 Expressway, will resolve the traffic gridlock in Apapa. But that approach fails to answer the question of why these roads are deteriorating at alarming rates because many readily blame the prevalence of petroleum tank farms in Apapa for this.

“Yes, there are many petroleum tank farms in Apapa resulting in the deluge of tankers coming from many parts of Nigeria to lift petroleum products in Apapa. When you add these tankers to the trucks coming to the ports in Apapa, the trucks coming to the manufacturing concerns and other vehicles that have cause to be in Apapa, you will say Eureka. But again, this does not fully tell the story why the roads in Apapa are deteriorating at an alarming rate especially the access roads in and out of Apapa.

“The right premise for tackling the traffic gridlock in Apapa is in realising that the trucks and tankers that flood Apapa on a daily basis are forced to pack and queue on the roads.”

Holding Bay Palaver He stated that with no holding bay in Apapa for trucks and tankers, their drivers are forced to park and queue on not only the access roads into Apapa but the main roads inside Apapa.

“So, roads and bridges that were not meant to be parking spaces for heavy duty vehicles but to serve only as thoroughfares, now carry the additional burden leading to their regular and speedy deterioration. This makes life hellish for both occupants of trucks and vehicles and has turned Apapa into a nightmare for all but the government which continues to collect trillions of Naira from taxes, duties and charges.