Port development: NPA to revoke concession agreement of 5 terminal operators

The Nigerian Ports Authority (NPA) over the weekend, threatened to revoke the concession agreement of five terminal operators over a lack of commitment towards the development of the port terminals they operate in, even as the ports are collapsing.

According to the Management of the Managing Director of the NPA, Mr. Mohammed Bello-Koko, five terminal operators are being monitored to ensure they do the right things as regards their commitment and obligations as agreed under the Port Concession agreement.

Addressing selected maritime journalists in Lagos over the weekend, Bello-Koko revealed that the affected terminal operators have been given a temporary six-month renewal with conditions to meet before they will have their concession agreement renewed permanently.

He said that the introduction of the Infrastructure Concession Regulatory Commission (ICRC) Act meant that the renewal of the concession agreements for terminal operators is no longer done the way it used to be, which means it is no longer business as usual.

“Tin-Can Island Port, we all know what is happening there. The port is practically collapsing. We need to focus our budget on the rehabilitation of those quay walls at the Tin-Can port. We have taken a holistic review of decaying infrastructures at our ports and have decided that it is very important that we rehabilitate Tin-Can and Apapa ports.

“What we have done is to start talking to lending agencies, even though we don’t intend to lend. We are asking the terminal operators, you people have operated these port terminals for about 10 years and 15 years; how much money are you going to invest in these port terminals? We are asking some of them that their leases have expired, how much will they be investing in the ports?

“For us to renew these concession agreements that have expired, about five of them, we need to have a categorical commitment from the affected terminal operators on the development of these port terminals. If the terminal operators cannot give us such commitment, then we either give the terminals to someone else or go and borrow money to rehabilitate those ports.

“However, if we go and borrow money to rehabilitate those ports, then what the terminal operators are paying will have to change. The rates will have to go up. If we don’t do that, these terminal operators will keep managing those places, and the ports will keep collapsing.

“Because of their financial interest, these terminal operators don’t want us to re-construct the affected port terminals because that will mean stopping them from operating.

“We have had interest from the World Bank, IFC, Afri-Exim Bank, and others. Surprisingly, it was the World Bank that actually gave money to the NPA to construct part of Apapa port so many years ago. The World Bank has come again to tell us that if we need funding, they will give it to us,” he explained.

On the process of renewal of the port concession agreement, he hinted that the ICRC Act introduction meant that the process of renewal can no longer be done the way it used to be done.

“At the point of expiration of any concession agreement, the then Legal Agreement says that the terminal operators can apply for renewal and we will renew. It was after the concession agreement that the ICRC Act came onboard. The ICRC Act requires that there should be a new owner, a new bid, and so on and so forth. So you can see there is conflict.

“Again, the Minister also said that the port terminals are in their worst state; that what is the plan of the terminal operators to invest more, also, the NPA asked the terminal operators about their development plans for the port terminals.

“The affected terminal operators have been given a temporary extension of six months. The essence is to ensure that the right thing is done at the ports. The essence is that we have value for money. If today, we revoke the current concession agreement and bring new people onboard, the new bidders will naturally pay the NPA far higher than what the current terminal operators are paying.

“We know this, but we are not yet saying that. What we are saying is that let’s sit at the table and create a concession agreement that is fair. We need an agreement that holds the terminal operators responsible for their actions.

“Before, if I or any of my colleagues wants to go into the port terminals, we have to give the terminal operators two weeks’ notice even when such visits are for inspection purposes. We have to have an agreement that is fair and adds value for money,” he said.  (Daily Sun)