Why vessels coming into Nigeria must now have war insurance – Bala-Usman, NPA MD

Why vessels coming into Nigeria must now have  war insurance – Bala-Usman, NPA MD

The Managing Director, Nigerian Ports Authority, Hadiza Bala-Usman, in this interview with ANNA OKON and TUNDE AJAJA, speaks on the issues bedevilling Nigerian ports, reasons for delay in cargo clearance, among other challenges

For a long time now, Apapa Ports have been in the news for the wrong reasons. As the head of the agency that governs and operates the ports, what is the way out of this trouble?

You would recall that the Vice-President had visited that axis on two occasions just to facilitate any necessary Federal Government’s intervention to resolve the congestion. We have a situation where the road networks are in a very bad state. We also have a situation where truck drivers just come into the port areas even if they have no business in the port. So, one of the things we have sought to do is to ensure that trailer parks are established. NPA will now licence trailer parks and ensure that only trucks that are housed in licensed trailer parks are allowed to access the port, using a call-up system. We have advertised, calling for people to come forward to license their trailer parks.

What has the response been like?

We didn’t receive as much response as we expected, perhaps due to the land issue within this environment, or maybe people don’t have access to such land. We wrote to Lagos and Ogun states as the custodian of land in the area to notify them of the fact that NPA wishes to license trailer parks and that they should let us know the trailer parks that are allocated so we can commence licensing, and we would continue to engage them. NPA cannot construct trailer parks because it’s not within our purview. So, the solution on the one hand is that trailers should be housed in trailer parks and on the other hand, the roads should be reconstructed. And after the visit of the Vice-President, he was able to facilitate an approval for N72bn by the Federal Executive Council for the reconstruction of the road, and we’ll do concrete road. That approval was granted about four weeks ago and they are working on the agreement and I hope we would be able to start in the next few weeks. The project would be executed over a period of 36 months. At a meeting with the Ministry of Works, Power and Housing and Dangote Group, which is constructing the road, we have discussed things like alternative routes while the construction work is going on, among other things. The project would be done through Public-Private Partnership, which means it would be insulated from any interference or the budgetary cycle. That means it would be completed on time and we are very excited about that. NPA is not a signatory to the agreement but I’m always calling the Controller of Works and the Minister of Works, Power and Housing to harass them over it (laughs).

Some people have questioned the concrete road option and why government didn’t give it to road construction companies. What informed the options the government took?

Concrete roads are what we need for port access, because bitumen does not provide that strength. But with concrete, as it gets older, it gets stronger and it lasts longer. We have already done Wharf Road, which NPA contributed towards and that 5km concrete road is at 85 per cent completion. It should have been completed in June, but there were public utilities buried there, like gas pipelines and electricity cables that needed to be removed. However, we should have it on stream within the next six weeks. Then, on the reason for giving it to Dangote; some people asked why we didn’t give the contract to Julius Berger. We couldn’t, because Julius Berger does not have equipment for concrete road, and so awarding the contract for the concrete road to it would mean that they would either sublet or invest in equipment for concrete road, which would translate into higher cost or the project not being delivered on time. The advantage in what we did is that Dangote has the equipment for concrete road and it produces cement, a major material for the work, so, I think giving it to Dangote was a better deal.

Beyond the bad roads and the nuisance created by the trucks, the location of the tank farms in the port has been described as a time bomb. What is the NPA doing about this?

We have notified the Department of Petroleum Resources on the need to ensure that those tank farms have commensurate holding bays for their trucks. Pipeline evacuation of petroleum products is also paramount. Carrying these products with trucks is not safe, neither is it efficient. And we have notified Dangote Refineries that is coming up in Lekki on the need to make sure their products are evacuated- using pipelines. If we don’t ensure that is done, in the next 10 years, the Lekki axis would eventually be worse than what is happening in Apapa.

There has also been suggestion about rail evacuation of cargoes, but things seem to be moving slowly. What is the update on that?

Just as we have mentioned at several forums, it’s inefficient to think that you can evacuate all your cargoes by road. So, we are working with the Nigeria Railway Corporation because rail evacuation is important. We have several applications for barge movement and we are granting approvals and any attendant waivers to enable the movement of cargoes from Apapa area to be evacuated in other locations. But we are keen on having more locations beyond Ikorodu where we can move general cargoes using the inland waterways. Nigeria Railways is also at an advanced stage with General Electric on concession agreement on the rail system and we are quite excited about that, because right now, we have minimum marginal evacuation using the rail. As we seek to have rail evacuation in 2018, we have put in a budgetary provision to deploy rail tracks to the key sides of our terminals at Apapa and Tin Can Island Ports. By the time we have an efficient rail evacuation; it would be more seamless.

A lot has been said about developing the eastern ports  to complement the Lagos ports. What is your approach to this?

As you are familiar, people decide where they want their cargoes to go to; you can’t force someone to use Calabar or Onne Ports. However, we encourage importers or exporters to use other ports. But it’s important to have rail or road connections that link the ports and we have sent a list of major roads to the Ministry of Works, Power and Housing, telling them to prioritise the construction of those roads linking the ports. Meanwhile, in Calabar, we have Ekon Bridge that links North-East and North-Central parts of the country, yet articulated trucks can’t pass through the bridge. So, Calabar would be more viable as the Ekon Bridge is reconstructed and we have drawn the minister’s attention to that. On the Warri Port, recently, we got approval to dredge the Escravos Channel in Warri. We are dredging it to 7.5 metres of draft and that would enable vessels coming in to that location to have seamless berthing. We used to have issues of vessels being grounded or being unable to come in during low tide. But, once this dredging work is completed in December, we would have 7.5 metres of draft, which would significantly increase cargo inflow and outflow from the port. For Calabar, we terminated our Joint Venture last year, but we are now in the process of engaging another technical partner and we have reached an advanced stage in evaluation and pre-qualification. We have also concluded on the costing and the volume of dredging that needs to be done for Calabar to be navigable. To dredge it to 10 metres would cost a total of N51bn, which is a huge sum of money. How do we justify investing a huge N50bn there and what attendant revenue are we going to get? We also asked for an estimate for the dredging up to 7.5metres, and we were given N37bn. As we seek to conclude on the funding for this dredging work, we are also encouraging the utilisation of flat-bottomed vessels, which do not need that depth of draft to access the port. Some came in last year and it was very exciting. We have gone to the people that build vessels to see how we can link them to Nigerian shipping companies for them to utilise such vessels, and that would save a huge amount of money that we would have invested in dredging. The President also recently directed that all the rails that are being deployed have to connect the port, which is very exciting.

There have been several reports on a recent award for dredging, whereby you allegedly awarded contracts to a company that had been convicted. Could you clarify this?

We had a procurement process where a company emerged. This company was convicted in Switzerland for having paid Nigerian government officials a certain amount of money and the names of those persons were listed. However, the company’s subsidiary bid for the dredging works. Meanwhile, NPA is into joint venture partnership with Bonny Channel Management Company Limited and Dredging International. We concluded the procurement process but we had a petition submitted to us that this company was convicted. Some payments were made and in Switzerland, it showed that they had made payments that were outside of their agreement and it was flagged. The proposition was that they paid those Nigerian officials a certain amount of money to facilitate the payment of their invoices by the NPA because the NPA didn’t pay them at that time. But the Swiss Court convicted them for making such payments. They also made that payment for security clearance to militants in Bonny, where they operated. They gave the names of the people they paid to. Fast forward, I received the conviction documents and I sent to the Economic and Financial Crimes Commission to investigate the Nigerian side of the conviction. I also sent to the office of the Attorney General of the Federation for their information and further guidance on our activities with the company. Let me give you an illustration. I’m on the board of Agura Hotel and the hotel was convicted for corrupt practices; two directors on the board of the hotel were also convicted. However, I’m also on the board of the NPA. So, can we say NPA was convicted for what Agura Hotel was convicted of? No. NPA has a different legal profile and entities have legal personalities. Through the procurement process, we have also written to them that if we further investigate and discover that they (the subsidiary) didn’t tell us the whole truth. The Bureau of Public Procurement, which did its own independent investigation, were able to corroborate the position I have given you and they gave us the go-ahead to proceed with the procurement. All manners of agitations have been going on but our procurement processes are regulated by BPP and we made sure we did the right thing.

At such a critical time as this, we learnt the NPA is constructing a multi-billion naira office complex in Abuja, when most of your activities are in Lagos and some southern states. What is the motive behind this project?

Before the privatisation, NPA had a lot of real estate but as part of the privatisation programme, it was advised that NPA should divest from real estate. The Federal Government divested and sold all its real estate. Now, in one of the researches we did, we discovered that for New York Stock Exchange; 70 per cent of its revenues come from real estate. So, part of what ports do is investment in real estate. For example, the World Trade Centre is owned by Port Authority of New York and New Jersey. So, World Bank advised us to sell all our real estate and then on checking, we realised that was what they were doing in their country. This is what we are looking to do with the Abuja office. Currently, NPA uses a rented office in Abuja. We rented a whole floor in Edo House and we have staff there. We have land that had been allocated to us by the Federal Government and what we want to do is to build our office, utilise one floor for our staff and then rent out the others for income. When they were divesting the real estate belonging to NPA then, we didn’t sell the properties NPA had in London, which were rented out and we are still getting some revenues from there.

One would think the NPA should engage the private sector  some more so it can focus on its core duty of being a regulator. Why does it seem the government wants to do everything?

I also believe that government should not be in business, rather, it should regulate and provide an enabling environment. So, I seek to have us focus on our role as the regulator and get less involved in operations. As a result, we are seeking private sector participation in certain areas. When I joined the NPA, one of the things we saw was that the NPA was the way it was before the concession, and it was as if it was operating the ports. Now, we have done a new organisational structure that is built around our new role to provide an enabling environment and efficient regulation. For example, we have the need for servicing of vessels in Nigeria. NPA has dockyards but we are unable to dock any vessel efficiently. So, we are working on having the private sector come and invest in the dockyards; revamp them and then the Federal Government can now have a policy that every vessel coming into Nigeria must service in Nigeria. This is a huge industry that Nigeria needs to tap into, but now you have people taking their vessels to Senegal or Accra to service, because we do not have the level of dockyard facilities that would service them. Due to our trade volume and population, no doubt that Nigeria is strategic in maritime business.

Despite the volume of trade at the ports, there is no Nigerian ship owner involved in cargo shipping, as everything is being done by foreigners, in spite of the Cabotage Act of 2003, enacted to promote the development of indigenous tonnage. Why has this law not been fully implemented up till now?

This is really not under the purview of the NPA but this is an issue that NIMASA and Nigerian Shippers Council have been working on. One of the things is the requirements of the type of vessels that are needed, vis-a-vis what our own ship owners are able to do. The Minister of Transportation has been very passionate about this and he even led a delegation to China in trying to see how our shipping lines can take advantage of the cargo volume that we have but that is something that is still being discussed.

Apart from the bad roads constituting congestion and delay at the ports, what about the delay caused by internal operations, whereby it takes days to process documents and clear containers. What is the NPA doing to make sure that containers are not being delayed unnecessarily?

Physical examination of containers and conduct of some officers are part of the delay in clearing goods. Customs is the lead inspection agency and what we can do is to keep encouraging them to get a scanner, such that when the container comes, it goes through the scanner. Customs would compute the duty payable, other agencies would do what they need to do and the container would be released after they have cleared themselves. That is the solution to the delay. The executive order has spelt out single interface for all agencies of government to inspect cargoes, which would facilitate seamless and faster evacuation of containers.

There have been ceaseless calls on Customs to get scanners, but given its seeming reluctance, is it not possible for the NPA to buy the scanners and collect commission?

Good question. We have actually explored defining scanners as port equipment or port infrastructure, and we have discussed it with the Customs, but it seems they would want to procure it. What we have done is that through the Presidential Council on Ease of Doing Business, a team was set up, comprising myself and the CG of Customs (Hameed Ali) and they set up the National Trade Platform, which would house the scanners. It would procure and deploy the scanners to have a single window. So, it’s like a middle ground, and we are pushing to get as much done as possible. They recently got approval with FEC for three mobile scanners to be deployed.

People have said that giving target to Customs has compounded the problems at the ports as they tend to arm-twist the operators to generate funds and meet up with their target, regardless of any harm to businesses. Do you support the Federal Government giving target to Customs?

I think beyond Customs, giving target puts people on their toes; it makes people to work harder. But then, it could translate into many things, like whether it’s the correct computation or not, even if it leads to congestion, you are just looking for ways to meet up with the target. But, giving targets has its benefits and I think the benefits outweigh the negatives. I think what Customs need to do is to have scanners at the ports and then cargo inspection would be done in an efficient and transparent manner.

In the inter-agency and other stakeholders committee report that all the agencies and stakeholders were signatory to in June last year, it was agreed that there should be no customs officer at the gate. But when your staff accosted the customs officials at the gate, the NPA staff were beaten up by the overzealous customs officers. Can we say Customs is overstepping its bound at the port?

I actually wrote to the CG Customs (Hameed Ali), and I get along with him quite well. So, the matter was reported to him. In that document you mentioned, everybody had their responsibility so it became difficult for us to compel other agencies to do what was agreed upon. We just looked at the one that is our responsibility and just keep on doing it.

Is it true that the NPA cannot sanction any agency at the airport?

No, we cannot. You cannot sanction anybody that is not directly under your operations. We can only write to them and implore them.

Would you say you need the power to sanction erring agencies?

I want to say that people need to be responsible. When people do what they are supposed to do, under the law and based on agreements, there would be no issues.

We have the issues of piracy and Wharf rats. What is the NPA doing about these?

The piracy issue is really bad in the South-South region of the country. Nigerian Navy has its areas where it provides coverage and I still told the Chief of Naval Staff recently that we need to increase coverage of some areas because we are seeing increase in piracy. NIMASA recently got an approval from the President for a new security architecture that would provide improved security on the waterways. We now have war insurance for vessels coming into the Nigerian waterways, which means that vessels coming into the Nigerian waterways now need to have war insurance, especially those going to the South-South, which increases the cost of our ports. Nigeria is not at war but due to the activities of the pirates. On Wharf rats, there are attendant concerns about that. They exist because of the human intervention at the ports. Once there is less human intervention, with the deployment of scanners, that issue would address itself. We are also deploying biometric access into our ports. We have done the procurement process and we have reached an advanced stage where only the people that the terminal operators need to give access to would have access to the port. We have also noticed that some staff and security agents carry people that should not be at the port in their vehicles to beat security checkpoints. That has been an issue as well. When the biometric access is deployed, it’s only with on-duty card that people would access the port. If you are off duty, you won’t have access. There will be no ‘I’m his friend’ or ‘I was here yesterday.’

When will the biometrics be deployed?

I can’t tell you because it’s subject to the approval of BPP and the Federal Executive Council, but I can tell you that work is ongoing on it.

Some stakeholders in the maritime industry have said that Nigerians ports are the most expensive in the world. What is responsible for that, if it is true?

Our ports are not the most expensive in the world; neither are they the most expensive on the continent. In order to address that, we engaged some agents to do a study on the competitiveness of our ports in terms of cost. I also made them to understand that there should be formal and informal costs. We haven’t changed our tariffs from 1990s and for the first time, we made our tariffs public and it’s on our website. One of the things that made our ports expensive is the unofficial costs, like settling certain officials before they could do their work. But when you deploy electronic system; single window inspection system, it removes human intervention and you won’t need to see such officers who would insist they would not sign without being given a bribe. So, our ports are not expensive.

There is also a concern that our cargoes are being diverted to neighbouring countries because of the inefficiency of our ports. Isn’t that embarrassing?

The cargoes that are diverted are cargoes that are banned in Nigeria, like rice and cargoes that have high tariff in Nigeria, like automobiles. That is why neighbouring Cotonou has huge record of rice importation. So, what happens is that once the rice gets into their country, they are immediately moved to the border towns. In fact, they have warehouses for rice in the border towns of neighbouring countries, just to smuggle them into those countries. Also vehicles, which have high tariffs, about 70 per cent, they also smuggle them into Nigeria through the land borders. But, like you know, Customs has banned the importation of vehicles through land borders and that has translated into an increase in the importation of cars through the ports. There is also the transshipment cargo, which Nigeria is unable to capture. It’s the cargoes meant for Niger Republic and Chad, but because we do not have the hinterland connection from our ports that links us directly to Chad ad Niger, we are unable to tap into that. It is not a significant volume but that is a volume we are now working to capture. The Ministry of Transportation is doing a rail corridor, which links Niger Republic to our port locations, which will now facilitate transshipment cargoes.

Do you monitor the equipment used by terminal operators to be sure they are working efficiently?

We are very mindful of that and we are aware of certain terminal operators not deploying the type of equipment they are required to deploy. We have instituted a review of the concession agreement. We recently got the World Bank to provide us with the technical support on the review of the concession agreement. They are now working with the draft supplemented agreement with all the concessionaires, which lists the gap between what they are supposed to provide and what they have provided. It also lists what NPA’s commitment is, what NPA has done and what it has not done. That would enable us to have a revised supplemental agreement, which recognises the gaps that exist and also put in place penalties and how they could also seek redress. We have the support of the World Bank, we have our own consultants and our own little brains (laughs). By the time we all brainstorm, we would be able to find an appropriate middle ground that would translate into the supplemental agreement, which we would sign. It would state our respective roles and we would all stick to it to ensure that the necessary equipment and operational efficiency are deployed in our ports.

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