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ROAD MAP TO MARITIME SECTOR DEVELOPMENT IN

NIGERIA PORT REFORM

HISTORICAL BACKGROUND

The port infrastructure prior to Port Concession of 2006 was developed in four
phases between 1906 and 2004 which resulted in the six (6) Seaports; Apapa,
Tincan Island, Onne, Delta, Calabar and port Harcourt.

The first major breakthrough in opening up the Lagos was in 1906 when orders
were placed for dredgers to work at the bar with approval for the construction
of the first length of the East mole. The port was then being managed by
department of marine of Nigerian Railways Corporation.

On February 1, 1914, the first mail-steamer S/S Akoko with draft of 5.64
Metres entered the Lagos harbour. Two months later, vessels began to use the
facilities provided at the Customs Wharf, on Lagos Island.

The Nigerian Ports Authority was founded in April 1955 as a Government
Parastatal.

In spite of six major Ports excluding oil Terminals and jetties a lot of
complaints, inefficiency and allegations of bureaucracy and unnecessary
Government intervention trailed the operation of the Nigerian Ports Authority.

In order to make Nigerian Ports Authority operate efficiently, a lot of
economics theories and committees came up. Notable was the Technical
Committee on Privatisation and Commercialisation (TCPC) in 1988 that
recommended commercialisation and NPA was named Nigerian Ports Plc. This
was short lived in 1993/1994 and was changed to NPA because it was not
effective. The concession option finally took off in April 2006. Without mincing
word, it is the best thing to happen in ensuring port efficiency.

THE REGIME OF PORT REFORMS

The issue of Port Reforms that gave rise to the structural and policy changes in
the Maritime Industry in general and Port Industry in particular is a thing of
interest in todays forum.

However, it should be noted that the term of reference of this Committee is to
discuss and present a position paper on the road map to Maritime Sector
development in Nigeria which no doubt will include other sub-sectors such as:-
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a) Trade Facilitation (Nigeria Customs Services)
b) Nigeria Shipping Policy (NIMASA)
c) International trade development (Nigeria Shippers Council) of which I
hope other honourable members of the committee who are conversant
with this sub-sector will equally present relevant position papers.

In this paper, it is important to reflect on the circumstances that led us to
where we are in the Maritime Industry today. My paper therefore, will discuss
issues relating to the following:-

(a) Reform centering on space problem and congestion,
(b) Reform which aims at solving the problems of corruption, infrastructural
development, improved revenue generation, Labour management,
(c) Terminal operational efficiency, security logistics as well as the issue of
globalisation and business environmental changes.

While discussing these issues, there will be a highlight of what the
concessionaires have contributed towards enhancing the growth and
development of the Maritime Industry in Nigeria.

What problems are still persisting?

What is the way forward?

These and more I am going to discuss and I am hopeful that at the end of this
paper this committee would have seen the differences between the pre and
post concession era.

The need for improved and efficient maritime Industry in Nigeria has been the
agitation of the Federal Government as well as the Stakeholders in the
Industry. As a result of this, various fiscal and monetary policies were
formulated and huge capital expenditure ploughed into the expansion of the
Ports infrastructural facilities, aimed at enhancing the development of Nigerian
Maritime Industry.

The various port reforms starting from the port congestions of early 70s a.k.a
cement amada propelled the formulation of the Port capacity expansion policy
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which was then thought to be the bane of Maritime industrial problems. This
gave rise to the expansion of the Lagos Port Third Wharf extension 1976,
Tincan Island Port 1977, Onne Port etc.

Not-withstanding these expansions, the problem of port congestion, channel
and draft expansion and corruption persisted giving room for another port
reform in 1998. This reform focused on the reduction of statutory agencies
deployed in the port as well as commercialization policy on services rendered
by the Nigerian ports Authority. This was intended to facilitate and enhance
efficiency and effectiveness of the Nigerian maritime industry.

The subsequent effects of these policies from the stakeholders view point and
Government findings proved that the effects or the results fell below
anticipated projection, thereby, giving room for another review in line with the
concessioning of the Port industry. A lot of policy variations were considered
however the policy of concessioning was preferred in 2006.

The question is,

Where are we now in the port concession era?

What value has the concessionaires added to enhance the development
of maritime industry especially in the area of infrastructural
improvement and development.

To understand and appreciate the extent of improvement so far, it is necessary
to note that at the inception of the concession regime, the port infrastructural
facilities were seriously decaying as a result of lack of development resulting to
low patronage and diversions of vessels to nearby neighbouring countries.

However, since 2006, the concessionaires have taken the following steps to
enhance development, port performance as well as trade facilitation.

INFRASTRUCTURE

Rehabilitation and reconstruction of quay aprons as well as the Stacking
Areas
Expansion and Reconstruction of container terminals
Rehabilitation of Terminal access roads
Provision of lighting facilities including generating sets
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Rehabilitation of the shed/warehouses
Reconstruction of Drainages
Construction of Perimeter fencing and Gate Houses
Improved Workshop facilities of modern standard

PLANTS AND EQUIPMENT

One of the perennial problems associated with Nigeria Ports Authority was the
non-availability of required functional plants and equipment. The port
concession regime has improved this situation with the following measures:-

Acquisition of Forklifts
Acquisition of container handlers for cellular trade demand such as
Gantry cranes, Reach Stackers, Handlers, Mafi-Tugs etc

STEVEDORE SERVICES AND DOCK LABOUR REFORMS

Before the concession era, Nigerian Ports Authority (NPA) was in-charge of the
port facilities and terminal operations. Within this period, dock labour was
managed by politically appointed stevedore contractors allocated with specific
zones and berths. This encouraged corruption, unscrupulous labour union
activities in which the loyalty of the dock workers was more to the leadership
of the union than their employers. This seriously affected the manning level
and productivity.

There was industrial dis-harmony and unrestiveness prior to concession era. As
soon as the concessionaires took over, they embarked on the following
restructuring exercises:-

Stream-lining Stevedoring Companies
Establishment of an acceptable manning scale to ensure high
productivity
The application of direct interview selection and employment of Dock
labours with joint effort of stevedoring contractors under the
Supervision of NIMASA
Elimination of zoning and permanent berth ownership by dock labours
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Improved salary structure and better welfare packages
Training and re-training opportunities

The application of these strategies gave a positive result which today are
glaring and recorded as follows:-

Continuous ship discharge/loading operation within the working time
without erratic stoppage of ship operations
Allocation of Labour is now strictly monitored to ensure the
achievement of the projected productivity and elimination of what was
known as ghost labour
High level of discipline has been achieved and extortion controlled
Safety and Security management has given rise to the eradication of
pilferages and reduction of damages to cargoes and properties
Increase productivity on daily ship discharges has brought about
improved turn-around time of vessels
Draft surveying and effective documentation have controlled and even
eliminated under declaration of cargoes, hence, leading to more
revenue generation for the government

SECURITY

The security problems of the Ports prior to the concession era was one of the
critical factors militating against the patronage of Nigerian Ports and
enhancement of the Maritime Industry.

The Concessionaires apart from constructing standardized perimeter fencing
made the following provisions:-

- Provision of well trained security outfit, that is in compliant to PICOMS
certification in compliance to ISPS Code
- Installation of Security gadgets such as CCTV, Walkie Talkie etc
- Installation of Security posts and Watch towers at designated areas in
the terminal.
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Whereas agencies responsible for waterfront security, to an extent have
improved water front security. In order to forestall fraud and other corrupt
vices associated with bureaucratic processes, the concessionaires have
expended huge capital in the establishment of I.T compliant processes, which
also are connected to the Customs system thereby reducing terminal service-
time, and unnecessary procedures.

IMPACT OF STATUTORY AGENCIES IN THE CONCESSION REGIME

It must be noted that relevant statutory agencies such as Customs, NPA,
NIMASA etc have contributed to the present port development and trade
facilitation by:

1. Channel expansion and draught increase which have enhanced larger
vessels reception
2. Creation of ships lane according to trade for effective traffic control
3. Concept of Build Operate and Transfer (BOT) on Green Field Port
development which has increased capacity expansion and service
choice.

The effects of these well-deserved huge capital investment are the
improvement in the Cargo Throughput and Vessel Traffic generation.

In as much as the efforts of the Nigerian Ports Authority and the Customs
Services in contributing to Maritime Industrial development is well
appreciated, it is necessary to highlight on the following areas that mitigate
widening the frontiers of the Maritime Industry.

- Inadequate provision of pilotage facilities which reduces berth
occupancy/utility rate
- Irregular sweeping of the Harbour bed reducing draft and endangering
vessels berthage
- Insecurity of Vessels at the anchorage and water front of the harbours
- Customs delay on ship pratique on arrival
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- Inconsistent cargo release processes in the terminal and delays
associated therein even when goods have been duely released and
cleared in line with the ASYCUDA++ concept
- Aged vessels with archaic handling facilities calling at the terminal
- Inadequate transport network and road traffic congestion
- Delays attributed to Importers and Freight Forwarders in the evacuation
and delivery of cargoes due to inadequate warehousing logistics and
problem associated with finance
- Incessant removal of management in the maritime industry based on
political patronage rather than professional consideration thereby
hindering policy implementation continuity, in line with International
best practice
- Reluctance on the part of few concessionaires to fulfil their statutory
obligations

CONSTRAINTS/CHALLENGES

Congestion occasioned by importers turning the port to storage facilities
due to low storage rate
Inability of some concensionaires to fulfil their developmental plans as
enshrined in the concensioned agreement
Cumbersome documentation procedures and processes in the
concensioned terminals
Waterfront security/piracy
Low Draft of berths lack of Dredging/Sweeping
Host community restiveness and shanty villages within the Ports
environment
Pilotage and associated delays, mooring of vessels, inadequate tug
boats, pilot cutters etc
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Intra-Multiplicity of service processes by customary government
agencies in the port
Dilapidating access and common user roads
Arrest of vessels at berth and attendant consequences
Port vehicular traffic control system
Poor power generating system
Intermittent ASYCUDA++ connectivity failure
Corrupt attitude of agencies at the port access traffic control points
Frictions among maritime statutory agencies due to overlapping
functions
Poor implementation of cabotage regime
Lack of National Carrier Capacity for UNCTAD 40:40:20
Over demand on road transport facilities
Uncoordinated, high level of unprofessionalism and unethical practices
of the freight forwarders
Lack of Central Truck holding-bay in the port as all spaces were
concensioned
Concentration of tank farms in the port environment which has
constituted serious security threat to lives and property thereby,
precipitating imminent crises
The state of the roads to the ports is in terrible condition. The bridges
are weak and cannot sustain the volume of cargo traffic from the ports.
The recent restriction of movement of trucks to night time by Lagos
State Government will cripple port operations and strangulate the
national economy which might lead to chaos and anarchy.





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THE WAY FORWARD

It must be noted and appreciated that the concession regime has positioned
the maritime industry in the right path. Hence, there is need to conclude this
policy by the establishment of a statutory outfit responsible for Maritime
Safety Administration (COAST GUARD) instead of the present undefined
functions by various agencies each claiming oversight function and shifting
blames. Hence, the need for a statutory outfit responsible for Maritime Safety
administration.

There is need to urgently pass the Port and Harbour Bill still pending in
the National Assembly which should be made to reflect enough
confidence and comfort to enable the concensionaires to invest heavily
in their concensioned areas
A regulatory body should be constituted to regulate and oversee the
activities of the following:-
- Nigerian Ports Authority (NPA)
- Nigerian Maritime Administration and Safety Agency (NIMASA)
- Nigerian Shippers Council (NSC)
- Seaport Terminal Operators
- Freight Forwarders
A simplified documentation procedures and processes should be put in
place to enhance port productivity
Terminal operators should be given free hand to charge prevailing
economic rate to discourage importers from turning the port into a
dumping ground
Concensionaires should adhere strictly to the concensioned agreement
and fulfil all their contractual obligations.
There must be establishment of National Coastal guard, independent of
all existing military/para-military agencies
Concessioning of dredging/pilotage services
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Development of rail network and inland water ways to de-emphasis port
road overland conveyance
Expansion and regular maintenance of port access roads
Relocation of farm tanks installation within the port area
Effective custom online service connectivity to all stake holders and their
processes
Regular power supply to the ports by either independent power provider
or through the National grid
Due to the enormous huge potentials available in the maritime sector in
the area of job creations and economic development there is the need
to establish a Maritime Bank (Maribank) which will enhance capacity
acquisition
Introduction of maritime studies in the curriculum of all tertiary
institutions in Nigeria
Activities of shipping companies as critical partners in the maritime
industry should be monitored and regulated
The state of the bad roads and bridges should be given urgent attention
to avert imminent danger
The Federal Government should as a matter of urgency intervene in the
Lagos State issues on the restriction of movement of trucks to night
time.

CONCLUSION

In conclusion as the Chairman of Seaport Terminal Association of Nigeria
(STOAN), I think I am in a best position to say without being immodest that
port concession regime of 2006 is the springboard to road map to maritime
sector development in Nigeria.

Progressive port reforms have enhanced port operations and created enabling
environment for maritime trade and development.

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I am therefore suggesting that these challenges raised and way forward
enunciated will assist this committee tremendously in coming up with iron cast
policy on national maritime sector development.

With Government support, Nigerian can surely achieve the goal of 20.20.20 in
port development and not hub-port for West and Central Africa but the whole
of Africa.


Thank you.