Executing Nigeria’s Port Hub Plan Through New Initiatives By Samson Echenim The N33bn New Onne Port facilities inaugurated recently and the N515bn port projects under the Onne Port Phase 4B contracts, the Lekki Deep Seaport, as well as committed dredging projects now going on along the Lagos, Onne and Calabar channels are core to plans by the Nigerian Ports Authority (NPA), targeted at attaining the country’s plan of becoming West Africa’s port hub by 2020 SAMSON ECHENIM, writes With the kind of massive business activities associated with the production of 2.5 million barrels of oil per day, cutting through exploration, FPSO dynamics and freighting, among several others, Nigeria has no reason to continue to maintain a self-restricted port business. Added to this is another natural advantage that sees the country occupying a strategic location in the Gulf of Guinea, making it easily accessible to most countries of West and Central Africa through the water. Moreso, the country operates thriving importation driven ports, with recent innovation in agriculture giving it a quick face lift in the area of agricultural produce exportation. The foregoing signify that it is high time the country did the needed to place itself in its rightful position, even as Africa’s second biggest player in oil and gas market, notwithstanding the current dwindling oil price. Peharps, this is the motivating spirit behind the recent seaport and oil and gas export developmental projects being executed by the federal government through its ports management agency, the Nigerian Ports Authority (NPA). The Public-Private Partnership (PPP) model adopted by the federal government in developing maritime infrastructure targeted at boosting oil and gas trade at the Onne Free Trade Zone, Rivers State, one of the core projects in this area, is yielding results and making Nigeria’s dream of becoming an oil and gas trade hub in Africa come through faster than expected. Another milestone feat recorded by the current management of NPA is the realisation of the PPP effort with Intels Nigeria Limited which saw the completion of three berths, spanning from Berth 9 to Berth 11 and other port facilities at the Onne Port Complex in Rivers State. President Goodluck Jonathan recently inaugurated the three ship berths, with a measure of 15 metres in depth. The facilities were part of contracts in the concession awarded to Intels Nigeria Limited and delivered three months earlier than deadline at $204 million (about N33 billion, existing rate at time of inauguration in August). Projects also developed by Intels which were inaugurated same day included 800 hectares reclaimed quay area, road networks and other port facilities. These formed the maritime infrastructure under the Phase 4 Onne Port Complex Projects developed by Intels Nigeria Limited in the Oil and Gas Free Trade Zone at Onne. “Investors have every reason to have confidence in this administration and are urged to key into government’s effort. The Onne Free Trade Zone for oil and gas export is not only the biggest hub for oil and gas business, but also the fastest growing free trade zone in the world, which has provided about 50,000 jobs. With this, we see that the future of maritime is very bright and we are confident that the zone will continue to attract more investors,” said President Jonathan, who was represented at the inauguration ceremony by Vice President Namadi Sambo. Already, the free trade zone, according to the minister of industries, trade and investment, Dr Olusegun Aganga, has attracted 160 companies, which have invested about $8 billion, with over 50,000 people directly employed. Jonathan said the projects driven by the NPA under Mallam Abdullahi were another demonstration of the federal government’s partnership with private sector in deep offshore oil and gas development. As significant as the projects are, those under the Phase 4B to be developed by Deep Offshore Limited promise the climax of Nigeria’s maritime cum oil and gas hub dream. This is even so, as the president same day, performed the ground breaking ceremony for contracts under the Onne Port Projects Phase 4B, awarded to Deep Offshore Limited at the cost of $2.8 billion (about N515.2 billion at current rate) which includes development of eight berths, beginning from 12 to 19, reclamation of 600 hectares of swampy land, 15.5km port roads and other port facilities with a span of six years. The minister of transport, Senator Umar whose office through its port management parastatal, the NPA is driving the projects said, with all the port facilities for oil and gas trade now in place at the Onne Port Complex, all cargoes must be discharged at NPA designated terminals, without such excuses that encourage oil theft. “Nigeria will no longer tolerate illegal oil and gas activities which leads to loss of income,” he said. He urged all concessionaires to give maximum support to a committee set up by federal government to monitor trade in the zone. Also speaking, the minister of trade, Dr Aganga said the Onne port projects clearly showed that the private sector is confident of the Goodluck Jonathan administration. He noted the zone is the largest free trade zone in the world and supervised by the ministry of industry, trade and investment. “At a total cost of $3bn for phases 4 and 4B, with about $2.8 billion for Phase 4B alone, the later project is indeed a game changer expected to support unprecedented oil and gas operations and will make the zone to become Africa’s first full scale oil and gas industrial city. With these projects, we are mobilising unprecedented level of investment into Nigeria. Aganga said. According to the NPA Board Chairman, Anenih, the Phase 4 Project began in May 2013 and completed nine months before deadline. “The projects are meant to meet increasing demand of companies in the oil and gas sector and are in consonance with the federal government’s transformation agenda. The projects will boost revenue being generated in the sector,” he said. The Lekki Deep Seaport brings the needed change Under this current leadership of NPA, the country has also seen the approval by the federal government of the development of the deep seaport at Lekki under a public-private participation arrangement, involving the Lagos State government and the Tolaram Group as leader of the private sector sponsors. “It takes a purposeful leadership in the public sector to be able to push this kind of arrangement,” said Otunba Kunle Folarin, chairman of the Ports Consultative Council (PCC). The chief finance officer (CFO) for the Lekki Port project, Mr Sandeep Parasramka has said the African Development Bank (AfDB) and the European Investment Bank (EIB) had obtained board approvals for funding of the deep seaport to the tune of $150 million and €160 million (about $600 million) respectively. In financing the $1.5 billion project, the AfDB is also said to be leading the loan syndication with other development institutions, such as the IFC, Propaco FMO and DEG, whose fundings constitute almost half of the total debt required for the project, with their credit approvals largely dependent on AfDB approval on which they rely for due diligence and other processes. The Lekki Deep Seaport, a public-private partnership project between the federal government, the Lagos State government and a consortium of private investors led by the Tolaram Group in 18.5 per cent, 20 per cent and 61.5 per cent equity respectively, is projected to yield up to $190 billion in revenue to state and federal agencies from taxes, royalties and duties during the 25-year period of concession, according to Parasramka. Physical construction of the 16.5 metre deep port, beginning with the construction of a 6-kilometre breakwaters is expected to commence at the end of this year and would take a total of 47 months. This will see the port becoming operational in 2018. The port is expected to generate directly and indirectly about 163,000 jobs during the concession period. “The most important development now is that Lekki Port is at an advanced stage, with the due diligence completed and financing terms approval underway,” he explained. The port is projected to handle its first one million containers before the first quarter of second year of operations and should be operating at its full capacity of 2.5 million 20ft equivalent units (TEUs) per year within six or seven years of operations. “Substantiated by various market studies and a study on macro-economic impact conducted by independent world renowned consultancy firms, we can boldly say that together with the government we are developing a project that has the potential to become the gateway to Nigeria for trade and foreign direct investment,” he noted. Calabar Channel dredging gets new life While it is easy for government agencies to run into muddy waters over issues bothering on contract awards, it takes a decisive management to show the direction and register timely results. After several years of abandonment occasioned by controversies and lawsuits over Calabar Port channel dredging contract, the NPA has helped to guide the federal government in putting an end to the contract controversy which has lasted up to five years. The Calabar Channel Management company (CCM) was favoured by the federal government for the two-year contract of deepening the 84-kilometre channel to 10 metres depth which will cost about N20 billion. The CCM will however, receive further technical support from Niger Global Engineering and Technical Company Limited, according to the minister of transport, Senator Idris Umar. This is another way that the current NPA management is bringing succour to both terminal concessionaires in Calabar Port and the importing and exporting population of Nigerians in the Calabar environs who have had seasons of lull in the last five years. In fact, business for terminal operators and concessionaires at the Calabar Port has been in the lull for most part of the expended concession period which began in 2006, as vessels with meaningful cargo volume rarely call at the port due to poor channel depth. “We want to assure Nigerians, especially people doing business at the Calabar Port of government’s commitment to developing the port and its infrastructure. “With the commencement, suspicion on the sincerity of government to boost ship traffic to Calabar Port has now been eliminated. We have no doubt that the expected increased ship traffic would also enhance private sector investment and an increase in government revenue,” Umar said. For CCM’s managing director, Mr Pieter Hekken, the contract is an inherent boost for public- private partnership in the nation’s maritime sector. He assured the shipping investors that his company would beat deadline and surpass stakeholders’ expectations. NPA being the landlord agency under the current port concession model is expected to supervise the contract. NPA’s managing director, Mallam Habib Abdullahi said it would work to ensure that the project is completed timely for business to return back to the port. “The federal government understands the importance of Calabar Port. As soon as the dredging is completed, new markets will open up in the Calabar axis and the entire South-South region will begin to witness unprecedented economic boom and employment creation in the maritime sector will manifest,” Abdullahi said. In the last two years, the Lagos Channel Management Company, which manages the Lagos ports channels and bouys has reached 13.5 channel depth for most areas, allowing the entry of bigger vessels and jerking up total annual cargo throughput in Lagos ports. For instance, this saw Nigeria’s non-oil cargo throughput rising from 44.9 million metric tons (MMT) to 77MMT in eight years. The volume of all cargoes, but excluding oil and gas coming into seaports in Nigeria stood at 77MMT at the end of 2013, up from 44.95MMT in 2005, a year before the concession of the country’s seaports. Statistics show that Nigeria has already recorded a 15.4 per cent increase in cargo throughput this year so far. “Generally, stakeholders and shipping companies have agreed that the port has improved tremendously,” said Mr Val Usifor, chairman Nigeria Shippers Association. The current management of NPA has also embarked on various programmes to enhance efficiency in port operation. This has seen a tremendous improvement in channel depth from the poor 9-metre depth to 13.5 for Onne Port. According to a senior official of Bonny Channel Management Company, the NPA plans to reach a depth of 15 metres within the shortest possible time. Experts said this had led to the biggest vessel that ever called at any West African port, Maersk Line’s WAFMAX vessel to arrive the Onne Port in May this year with a tonnage of 4,500 20ft equivalent units (TEUs) container. “This is going to make transportation of goods more economically viable. Before now, there were 2,500 containers on one ship, but now there will be 4,500 TEUs,” managing director of Maersk Line Nigeria Limited and head of the company’s Central and West Africa Cluster, Mr Jan Thorhauge said, after berthing of the WAFMAX at Onne. Personnel development, port and maritime domain security According to the Ports Consultative Council chairman, Otunba Kunle Folarin, the current NPA management places premium on human capacity development. He said, “I am aware that in 2013 alone, management trained 3,091 personnel out of the authority’s total workforce of 4,245 and this represents 90 per cent of the authority’s employees. “When we talk of attaining port hub status, people easily think of infrastructure, global-standard port facilities and of course, security. While all these are very important, we should also be mindful of the fact that they are all being driven by people, especially the staff of NPA. So, training and retraining of staff, which the current management of the port authority has been seen to be generously committed to must be recognised.” Another digital leap made by NPA under the current dispensation is electronic port access control system, which is now working in Lagos and Port Harcourt ports. “Also in a bid to demonstrate its commitment to the provision of efficient port services in a safe and customer friendly environment, the present management donated some security devices to the Ports Authority Police Command to further combat security challenges at the port,” said Mathew Essien, a licenced customs agent.
Posted on: Mon, 15 Dec 2014 10:05:57 +0000
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