Ports concession arrangement faulty - Adeyemo

Captain Niyi AdeyemoThe immediate past President of the Nigeria Association of Master Mariners, Capt. Niyi O. Adeyemo, in a chat with Maritime Editor, DELE ADERIBIGBE, says there is need to review the ports concession arrangement, among other sundry issues. Excerpts:

Sir, how do you see the on-going Ports Reform and how would you assess its impact on the nation’s economy?
The first question we need to ask ourselves is the motivation of the issue of port reforms. Why did the government consider it necessary? What ends were to be achieved?

I think the government believed that ports reforms was going to bring about rationalization of operations with set goals and objectives in the ports; that it was going to control the movement into and out of ports especially with regards to the ISPS code; with regards to having to curb the movement of undesirable elements entering into the ports, which in the instance reduces the number of vessels that come into our ports and enhance operational efficiency in cargo work and in keeping with modern day trend to have public private partnership that will work to the advantage of the country.

We must understand that NPA as an organization, though rich and buoyant was overloaded with staffers. As a result of its buoyancy, some of the past management in that direction had a lot of money to spend; they were one of the few government agencies that did not depend on the government fund for their operations. They were in position to look after their staff, pay their wages as at when due and other welfare packages. They met their financial obligations without having to go to the government.

But as a result of political angle that NPA had, they were not in the position to get the best in terms of Chief Executives. As a matter of fact, the last thing that came into government’s head was efficiency or competency and therefore there was a lot of fight to be able to take the position.

But forgetting competency or track records of such people was one thing; that almost every one wanted to attempt the post was another. The end result was that the work force was bloated; they now have a situation where 10 people would be doing the work of two persons.

Majority of them have nothing doing; they simply came to work and yet did nothing, since they believed that after retirement age their benefits and gratuity will come because of the buoyant nature of the NPA.

They had a lot of revenue to spend, both locally and abroad they didn’t feel anything about the over bloating nature of the ports. So it is good the ports concession actually started from them.

But of course we all know that the efficiency of the port could not be guaranteed if that had continued, since they would not be meeting the economic standard. They needed to generate sufficient revenue because as you know, they were not going to get anything from the government; no subvention.

Of course NPA was not getting any subvention from the government, except for the one government was expected to give for the construction or rehabilitation of the ports and that was a decision taken in the interest of the country.

Sadly enough too, they realized and worked on the premise that whether the ports were efficient or not, the cargo input will always come. But the end result was that if you had so much congestion for the cargo in port and the turn round of vessels was prolonged; the shipping companies were going to slam a surcharge which you and I have to bear because the shipping companies will simply spread it on freights and on the charges paid before you collect your cargo.

Are you saying that the concession was fair?
The ports concession in practice was good; by and large. Though the end result might not have justified the whole issue of the ports reforms as a result of the political patronage. The issue of using everything for money failed to encourage efficiency and competency.

In Apapa for instance, in some parts of the areas that were newly concesssioned, there has been this indiscriminately pricing of the ports for perhaps, those who were in tune with the leadership of our government.

But in terms of efficiency, most people believe that the AP Moeller enjoys an edge, without any prejudices over many other terminal operators. That however does not deny that there has been overwhelming improvement in other areas. Let’s take the Flour mill for instance, they too have been operating for long and sunk a lot of money into operating the ports. To ensure a maximization of their investment, especially by those two; they brought in experts and professionals to manage their investments in the ports. My only anger is that they ought to be able to submit fully, to whatever charges the NPA asked of them.

The ports concession would have been perfect, but for political patronage, especially in respect to what ports concessioning should promote. So, today we have a situation were these experts now programme their vessels back to back as professionals. It is a good thing. And it has impacted on operation, but may be, with added cost. But then, everything that brings efficiency also adds cost in the short run. But, on the long run after they may have been used to all these, cost should go down; except that in Nigeria, cost don’t go down!

My suggestion is that the NPA should revive the whole operations after two or three years. Without government taking action to find out how they are working, what the gains are in terms of time, what they are doing in terms of cost, especially in respect of what we are paying before as compared to what we are paying now; how is it affecting clearing agents all of which, will get to the final consumers.

The authorities should call on the stakeholders to let them brainstorm periodically. A lot of clearing agents must have some complaints, some may be genuine, some may not, and some may be out rightly frivolous. I am talking in terms of what the country will benefit, not what the individuals would benefits. We must begin to ask questions. Has the ports concession made their places of work more conducive? Have the ports users got the benefits of cooperation with the concessionaires; have they put any obstacles in the way of the customs or have our customs benefited from the expected high turn over in the ports? And have all these translated into any higher revenue for government?

Whatever any one may say in favour of the ports concession, the average resident in Apapa now also believes it has equally brought a menace in its stride. Are you aware of this?
The menace you are talking about is the traffic. What can we do in order to re duce the traffic congestion? But is it impossible for them to create another route or axis now?

I heard of what the Ogun State government is planning to put in place of recent. The Federal Government ought to have come into that, when they were planning towards the concessioning of the ports; but nobody told the Federal Government. The only agency that ought to do this was the Federal Ministry of transport. Everybody was thinking on how they will get their people into the concessioned area.

NPA, tank farm operators set for war of attrition

Enduring peace may still be far from being found in the war of attrition, gradually flaring up between the Nigerian Ports Authority (NPA) and the owners of some tank farms located at Ibafon, Lagos.

This was consequent upon the NPA’s public declaration that its comprehensive audit of the latter’s operation showed a safety operating level far below agreed international standards. But while the public may prepare for the fire works, most would also remain ignorant that the declaration could drastically alter the petroleum product supply equilibrum presently being enjoyed in Lagos, and once again bring back the dreaded old days when men queued for days on end at petrol stations, while the smatter ones made procurement in the dead of the nights at black market rates.

This is because the six tank farms, which the authorities specifically gave its thumb down were observably also the very most functional ones, meaning that in the event that their operations were suspended, the capacity of those remaining in business to meet even the Lagos city alone demand could become impossible, let alone think of extending any supplies to other places, including Ibadan or the Northern parts of the country.

But while the notion of this fuel scarcity looms, the situation may have been further compounded by the introduction of sentiments, which boarders on political or ethnic cleansing, as five of the affected tank farms were established by enterpreneurs from a particular section of the country. The companies are the Capital Oil and Gas, whose Chief Executive is Mazi Ifeanyi Patrick; Wadeko Oils, Ibeto Oils, Total and the Intergrated Oil and Gas, whose CEO is Capt. Emmanuel Ihenacho. Especially, after a Department of Petroleum Resources (DPR) official, Mr. Krona Uti, whose opinion was sought after inspecting a fire and safety drills at the Capital Oil shortly after the NPA letter was written said he found nothing wrong in their response; and declared their safety levels as perfect.

But, shall we on an account of this, ask the NPA to overlook its duty to ensure that the highest safety levels were maintained? A letter from the NPA, signed by its General Manager, Safety, Health and Environment, Arch S. M Danhassan to the tank farms operators, a copy of which was made available to the Nigerian Tribune particularly stressed the need to enforce the highest safety standards, in view of the consequential implication of any neglect on Lagos, in case of fire.

The letter reads in part: "Please refer to our safety inspection audit of your facilities and tank farm on 5th Feburary,2008. This is to inform you that operations at your depot were found to breach safety procedures and regulations at different levels with potentials explosion and or fire risk consequences".

“The potential consequences of a major incident at your depot are considerable with possible domino effects on the other tank farms, jetty and berthed vessel(s). The main risks are typical of most petroleum tank farms and petroleum jetties fire and/or explosion risk arising from loss of containment of flammable liquid or gasses that may be at high temperature and /or pressure as well as toxic risk, arising from various components of these fuels.

“We found that the safety facilities in place at your depot appear to be seriously deficient for preventing or controlling a major or even a minor accident. Nigerian Ports Authority tried to balance this against the likelihood of the related major accident hazards and the possible aftermath or consequences of such and found this to be frightening in reality” Danhassan further observed in the letter. Despite the beauty of the letter however, most of the affected tank farm operators denied the sincerity of the letter, stressing that there was nothing, either by way of security measures or equipment in the approved farms that were lacking in theirs, except “politics” and “ethnicity”

Expatiating on this, Intergrated Oil and Gas tank farm owner, Capt. Emmanuel Ihenacho, stated that those affected had done all that was supposed to be done, and he could, therefore, not understand why the NPA was adopting ambiguos yardsticks to put the most functional tank farm operators out of business.

"We have looked carefully at the allegations by the NPA, the way and manner of its origination and articulation, the level of current safety provision which is maintained at out tank farm, the degree of close cooperation which we continue to enjoy with the DPR in their statutory management of the safety aspects of tank farm operations and the rather draconian and unwarranted measure which the NPA has sought to foist upon us and can only conclude that the actions of the NPA in the current matter has nothing whatsoever to do with its professed worries about safety provision and everything to do with a desperate attempt to join and pursue partisan agenda against our company which is pressed, would only result in the loss of our business patronage and significant job opportunities.

"The current decision by the NPA management to suspend the discharge of products to our tank farm is completely unwarranted blackmail", Ihenacho observed further.

Speaking in similar vein, billionaire owners of Capital Oil and Gas, Mr. Ifeanyi Patrick, who similarly described NPA's letter as a red herring, also insisted that the NPA had merely decided to play politics with the nation’s investment climate and fortunes.

“It’s so unfortunate that we got this letter from NPA. Actually the rumors have been on the air for over two weeks by a certain operator in this area, who vowed to use his political clout to subdue us. We believe in giving diligence to the people, trading with utmost regards, while complying with the directives of the Department of Petroleum Resources DPR which has been mandated by government to regulate and direct our operations.

“We work in alliance with the need to update our people. But the aspect of the NPA who in the last ten years have never for once been involved in the inspection of our depot. But we know those who are doing this to us. They are those that are posing threat to people’s containers and other investment in the NPA.

“I’m so disappointed in the area of their choice in selecting the six people within Ibafon and also the people that they say were operating safety rules by NPA standards. We however want to ask NPA how many times they have in the past four years been here to direct us?

“If there is going to be any improvement in this sector, I don’t see why there should be so much segregation; were some will be chosen and others will be left out, and those to be affected would be those who are in fact doing far better.

“I am throwing an open challenge. And if this is what they call the rule of law of this country or regime we want to know it. I can’t be intimidated; I pay my dues to the government. I am ready to fight this thing even if it will take the last drip of my blood. It is going to be a fight to finish. I want them to come up and tell what any one else has in his depot that I don’t have here.

“When has it become NPA’s duty to review petroleum sector? Has the NPA in the past five years organized any workshop or seminars to advise us in respect of safety levels? Can they give us the details of such seminars they have organized?