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Port concession yield N3.9tn to the economy

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By Usman Oladimeji

Terminal operators have made massive investments in the six major seaports.

Concession of cargo handling activities at the port to reputable commercial terminal operators via the Federal Government’s port concession initiative has improved efficiency and provided other substantial advantages to the Nigeria port. The port concession scheme has saved the government nearly $8.5 billion (N3.91 trillion) which has so far been used as congestion fee payments to international shipping lines, according to Vicky Haastrup, chairperson of the Seaports Terminal Operators Association of Nigeria (STOAN).

Haastrup made this known to the press after Frederik Klinke, the new national managing director of APM Terminals Nigeria, paid her a courtesy visit. She asserts that concessionaires are prepared to increase investment in the port once impending concession agreements are extended. Terminal operators have made massive investments in the six major seaports around the nation, amounting to billions of dollars, she said, and these savings generated have had a significant impact on the economy.

Port concession has saved Nigeria’s business sector $8.5 billion.

She claims that the port concession plan in Nigeria has been a huge success. As a matter of fact, several other African nations sent representatives to Nigeria to learn about the country’s port concession system and how it has helped the country significantly improve investment and efficiency in a short amount of time. According to her, this exemplifies the optimistic outlook of Nigerians. From an average of 45 days before the port concession program was introduced in 2006, wait times for arriving boats have been cut to less than three days presently.

In addition, the concession program has helped to rid off the egregious congestion surcharge that was formerly levied by major shipping lines on Nigerian ports under the Europe-West Africa Trade Agreement (EWATA). Hence, the 17-year port concession period has saved Nigeria’s business sector $8.5 billion, or $500 million annually, by eliminating the port congestion surcharge. Haastrup said that private investment in port expansion was made possible by the concession and this has freed up government funds for other national development initiatives.

Companies seeking renewal are to demonstrate adequate performance.

The STOAN Chairman also noted that the port concession has helped modernize the country’s seaports, increased the availability of cargo handling equipment, boosted competition between terminal operators, enhanced the welfare and training of port workers, and established a condition of service for dockworkers. According to Haastrup, before the port concession system, dockworkers were regarded as casual workers with no guarantees of employment. With the advent of the Collective Bargaining Agreement (CBA) to safeguard their wellbeing, this paradigm has undergone a major change.

Furthermore, Haastrup suggested that the Nigerian government expedite the renewal of port concession agreements so that terminal operators may invest additional funds into the port, making it more competitive. However, companies seeking renewal of ports concession agreements are required by the federal government to demonstrate adequate performance in order to continue operating at the ports. The effectiveness of port operations, the volume of cargo traffic, and the quality of income were all objectives of the port reforms that would be taken into account during the renewal of concession agreements.

APM Terminals assures improved efforts to the efficiency of the ports.

Frederik Klinke, the national managing director of APM Terminals Nigeria, said in a recent interview that the company would continue to innovate in the area of port management in Nigeria and give help to the plan that the Federal Government is pursuing to increase non-oil exports. In addition to this, he assured the STOAN Chairman that APM Terminals would provide support for the association efforts to improve the efficiency of the ports in the country.

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