. says despite Covid-19, NPA generated N291 Billion in 10 months
The Managing director, Nigerian Ports Authority (NPA), Hadiza Bala Usman, is saddled with the role of managing Nigeria’s seaports through which over 75 percent of imports and exports pass. In this interview on Arise TV, She shared her thoughts on how to address the challenges in the maritime sector, impact of COVID-19 on NPA’s revenue and other burning issues. UGO AMADI captured the discussion. Excepts.
What is the impact of Covid-19 on NPA revenue?
Honestly, it has not been easy ,but despite the Covid-19 pandemic that disrupted global supply-chain and trade, NPA has been able to generate N291 billion in revenue from January to October 2020.
Globally, the port operations were sustained and the International Maritime Organisaation (IMO) had a strong position regarding having sustained shipping and that ports would remain opened. Our challenge was on full value-chain for ports operations. So, if the ports are functional and cargo comes into the ports, the warehouses were shut down and trucks were not at work during the lockdown. So even if your shipments come into the ports, you cannot evacuate it. So that was an issue because ports can’t work in isolation of the full value-chain. So, when cargos came in and people could not take their goods out, the NPA gave a waiver for rent-free period during there was a full national lockdown, consignees were given a freehand without paying for rent because it is not your fault you are unable to get your cargo out. So, to that extent, the government took gave off that revenue to ensure consignees feel a bit of cushion regarding their inability to their cargo out.
While we have the challenges within the economy with Covid-19 and revenue generation, NPA within the period of January to October, we have been able to raise N291 billion as revenue that has been realized. In 2019, we raised N298 billion from January to December. So, you can see that the differential is marginal and for November to December, we may be able to meet up to what we raised in 2019 and we may not. So, there has been a reduction but it is not huge in terms of volume from the amount of revenue we have realised within that period.
We are optimistic that the NPA would meet its annual target especially when compared with the revenue it generated last year.
What are the top priorities in terms of improving the capacity of Nigeria’s port infrastructure?
We need to improve our operational efficiency to ensure our infrastructure is able to meet the needs of investors coming to the country. We have noticed areas of channel management that require development, and we have channel designs in the Lagos Pilotage District that we are looking to expand. We are also considering channel depths and innovations for our infrastructure to enable large vessels to enter. We are concerned by the amount of resources the government has deployed in the dredging of our channels; consequently, we are planning to implement a more data-based approach towards expenditure on channel management and dredging. We advertised this consultancy work in an international tender, we evaluated the bids that came in, and now we believe the resulting designs will successfully guide the execution of our annual dredging plan.
What reforms will reduce turnaround time?
We are working on establishing an effective community system for the port: an IT platform that would link up with the National Single Window. This would be a trade platform whereby all entities that operate within trade facilitation and the transit of goods could make payments within the platform, and it would include the Nigeria Customs Service, the Standards Organisation of Nigeria, among other relevant parties. This would greatly improve the efficiency of operations, by reducing the physical presence of additional agencies at the port.
How can private sector participation be increased in the maritime and shipping industry?
Our role is regulatory, though there are still some aspects of operation that we retain, and we are keen to see how these would be done through a public-private partnership (PPP). For example, we are evaluating our dockyard operations and may opt to have a PPP run and invest in this sphere.
How are new measures reducing gridlock?
We have gridlock in the Apapa area and we need an intramodal transportation system to properly address this, as 80-90% of the cargoes leaving our ports currently use route transportation. This must be changed. The minister of transportation is in the midst of leading a concessioning process with General Electric for the rail line, to gather the initial investment and infrastructure deployment for the rail to the ports. So far they have committed to deploy infrastructure, and maintain and refurbish the rail lines to the Apapa port, and have agreed to invest in taking the rail to the Tin Can island port. Without this intermodal transportation, we will not be able to overcome the gridlock in and around our port areas. We are working with the minister of transportation to explore the utilisation of inland waterways to evacuate cargoes from our ports and have discussed a five year plan, in which cargoes are more evenly distributed across existing transportation routes.
In what ways is Nigeria working to increase its share of transit and trans-shipment activity?
We have deep seaports that we are currently working on, whereby the Nigerian Ports Authority is a minority shareholder in certain instances, such as the Lekki deep seaport and the recently approved Badagry deep seaport project. We believe that when these ports come on-line we will be able to address the additional expansion in Tema and Abidjan. Indeed, we need to improve our tariff regime and our pricing in order to become more competitive in the market. We believe that with new ports and improved operational efficiency, combined with the reduction in human intervention, we will be considered one of the best options for bringing cargoes to the West African coast.
What are the challenges and pushbacks the agency has faced in terms of stemming corruption?
Sincerely, speaking fighting corruption and ensuring compliance with existing laws is a challenge at the ports but we determined to get better value for the federal government from contracts and services rendered by private firms.
On pushbacks that have to do with corruptions and fightback when an institute seeks to priortise government interest and seeks to recognise that the citizens and Nigeria as the country is priority over a private company who have signed some agreements that are not in compliance with regulatory obligations. That is a huge pushback I have received.
OMSL is the secure anchorage area where vessels are made to pay for anchoring and security within the Nigerian ports. And this started in 2013 to provide that platform with the Nigerian navy and fast-forward in 2017, we felt it was unnecessary for people to be paying money just to secure their vessels when anchoring through Nigerian waters because it is the responsibility of government through the navy, NIMASA at zero cost to the owners. But the firm had made $17 million in six months and the cost is purely the company’s gain and not at the interest of Nigerian citizens.
From January to July, OMSL made $17 million in revenues in securing vessels and none of these revenues come to the coffers of the federal government. But what is more imperative is that if you feel you are trying to improve ease of doing business in your country, and you are charging vessel owners for anchoring their vessels I think it is not an activity that is in the interest of Nigerian citizen. Because for every dollar you pay to secure cargo, the consignee would transfer it to you the final user.”
“We are having discussion with the vice president to conclude that and we have given directive to dismantle because it beats my mind how you can justify that activity.”
On Intels, we have our layer of relationship such as non-compliance to TSA and they have realised that they had to comply after a lot of pushbacks, they complied. And now their contractual relationship with us on service boat has expired and upon the expiration, they have gone to court to request for them to remain a third-party provider, which is ridiculous because you cannot force government to provide a service. We of course have another relationship to do with amortization project that we have which revenues arising from service boat is made to pay for the amortising.
The point is that INTELS need not be the service provider for that service. Of course, they have gone to court and we are challenging it vigorously to ensure that the Nigerian government gets value for money and also that the government’s contractual obligations are met. You cannot rewrite an agreement or bully people to comply to some ridiculous positions that you feel is in your best interest as opposed to what is in the best interest of the country. I don’t see what is political about a company not complying with TSA. So if government says I have a Treasury Single Account from 2015 all revenue of government should go into the Treasury Single Account and a private company says no I am not complying and government says you must comply, so what’s political about that,?
In fact, who’s being political, is it you INTELs that has hitherto always had political advantage, that way you never comply to government’s directives? So can we look at it in that way because I am curious as to what’s political about the fact that your contract has ended and the Nigerian Ports Authority is reclaiming back its service? How is it political that your contract ended in August 9th and government says now that your contract has ended, government will continue that service you rendered and pay that your sister company for any revenue that arises and you say no, I must be the service provider, so what’s political about that?
For me, what’s even political is the fact that a company thinks it is above the law because hitherto it has been using its own political influence to operate outside of the legal framework, so we should be asking INTELs why it’s been political about its operations.”
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