The Nigerian Ports Authority (NPA) has threatened to revoke the concession agreement of five terminal operators over decaying infrastructure.
The unidentified five terminals under whose watch the terminals have dilapidated have been granted a six-month grace to ‘do the right thing’ and upgrade their facilities or permanently lose their licenses to new owners.
Disclosing this during a media parley in Lagos at the weekend, Managing Director of NPA, Muhammed Bello-Koko, said the terminal operators were being monitored as regards their commitment to the agreed obligations.
Bello-Koko, also revealed that the authority’s 2022 budget would focus more on rehabilitation of the quay wall in Apapa and Tin Can Island ports.
He explained that the introduction of the Infrastructure Concession Regulatory Commission (ICRC) Act post -concession has altered the renewal process, where the then legal agreement had given the terminal operators the right to apply for renewal at the expiration of any concession agreement and get it.
“It was after the concession agreement that the ICRC Act came on board; it requires that there should be a new owner, a new bid and so on. So, you can see there is conflict.”
According to Bello Koko, “At 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 infrastructure 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 that have operated these ports for about 10 to 15 years how much money are they going to invest in them? We are asking some of them that their leases have expired, how much will they be investing in the ports?”
“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. It has come again to tell us that if we need funding, they will give it to us.”
He stated that categorical commitment on the development of these terminals is required from the five affected terminal operators before any renewal, otherwise “we either give the terminals to someone else or borrow money to rehabilitate those ports.
However, “if we borrow money to rehabilitate those ports, 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.”
He regretted that because of financial interest, the operators do not want the NPA to reconstruct the affected terminals because that will mean stopping them from operating.
Bello-Koko further stated that the minister has noted that the terminals were in their worst state, and is interested in the concessionaires’ plans for further investments, just as the NPA has requested from the operators 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. 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 operators are paying.
“We know this, but we are not yet saying that. What we are saying is, let us sit on 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 a visit is for inspection purposes. We have to have an agreement that is fair and adds value for money.”