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Ports require $1.1bn for concession renewal

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By Mercy Kelani

This concession process is on hold for gov’t to finalize reinvestment strategy.

The nation’s ports are in need of a reinvestment of approximately 1.1 billion dollars in order to comply with the Federal Government’s requirements for renewing the concession agreement. When he faced the House of Representatives Committee on Privatisation in Abuja, Gboyega Oyetola, who serves as the Minister of Marine and Blue Economy, shared his perspective. He explained that the port concession process was currently on hold in order for the government to finalize its reinvestment strategy and upgrade the ports to meet necessary standards.

He assured that the government was committed to preventing the total collapse of the ports and would take appropriate action. Oloruntola Michael, the Permanent Secretary in the Ministry, expressed on behalf of the minister that the current agreement with concessionaires did not meet the government’s standards. He stated that the current level did not meet the necessary criteria, explaining that the Ministry is planning a significant reinvestment in the port system as part of their modernization program in order to improve service delivery.

Government’s reinvestment strategy must stop the renewal procedure.

His belief is that this aligns perfectly with Nigeria’s reputation and its standing in the global business community. The port’s current status falls short of the necessary standards. Re-evaluating the port concession will be crucial in order to accommodate the significant investment amount expected to be put into the port. Due to this, the Ministry, working in collaboration with the NPA agency, has initiated a reinvestment program for the port. In addition, Mohammed Koko, who serves as the Managing Director of the Nigerian Ports Authority (NPA), revealed that the request to extend the concession contract for the ports was presented to the Federal Executive Council in February of 2023.

Also, he clarified that the FEC has temporarily postponed the renewal request waiting for more details. He mentioned that one of the concerns raised by FEC was about investments in relation to the current infrastructure at the ports. According to Ignatius Ayewoh, the temporary head of the Bureau for Public Enterprise, it is imperative that the government’s reinvestment strategy puts a halt to the renewal procedure for the concession exercise. He stated that the bureau of public enterprises (BPE) played a crucial role in the concession agreement and has been actively monitoring it to date.

In 2021, the concession agreement came to an end.

Status reports on performance will be shared for documentation purposes. Ibrahim Chidari, a Representative and Chairman of the House Committee on Privatization and Commercialization, emphasized the importance of implementing strategies within the Ministry to prevent any loss of government revenue. In 2021, the agreement came to an end and the terminal operators were granted two six-month extensions. Since then, no further extensions have been given, as he mentioned. The Nigerian Ports Authority (NPA) is responsible for overseeing and managing the various Ports across Nigeria.

These Ports are located in different states such as Lagos, Cross River, Delta, and Rivers. The major Ports under NPA’s jurisdiction are Lagos Port Complex, Tin Can Island Port Complex, Calabar Port Complex, Delta Ports, Rivers Port Complex, and Onne Port Complex. The Federal Ministry of Transportation oversees their operations, and they work closely with various Government Agencies to ensure smooth functioning. Regarding their responsibilities and roles mandated by law, they build, possess, and manage ports and docks; ensure a secure and easily passable route; provide solutions for the management and storage of goods; manage the upkeep of port infrastructure and machinery; guarantee protection and peace of mind; and create and possess real estate.

Related Article: FG sets to Renovate the Country’s Ports

Additionally, the progress of port development was impeded by the system in place, causing a decrease in operational efficiency. As a result, the ports lost their competitive edge and became a means of draining the limited national resources. In efforts to reverse this decline, the Authority (NPA) underwent commercialization and granted more autonomy based on suggestions from the Technical Committee on Privatization and Commercialization. Unfortunately, the anticipated improvements did not materialize due to interference from the public service bureaucracy. It was eventually restored to its original state.

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