PORT CONCESSIONS: PROCEDURES AND MECHANISMS IN FORCE

Transcription

1 PORT CONCESSIONS: PROCEDURES AND MECHANISMS IN FORCE Being Paper Presented by Omar Suleiman Managing Director, Nigerian Ports Authority. At the 11 th Round Table of the Port Management Association of West and Central Africa (PMAWCA) Lagos, Nigeria 25 th June, 2012

2 2 TABLE OF CONTENTS Definitions Reasons For Concessioning Concessioning Process Concessioning Results Responsibilities of Concessionaires Procedures and Mechanisms in Force Challenges Benefits Conclusion

3 3 DEFINITIONS Concession is a term conveniently coined to describe the long term leasing of some activities to private operators in most government owned ports and terminals. In the case of Nigeria, Nigerian Ports Authority concessioned cargo handling operations to private terminal operators while ownership and provision of marine services are still the responsibility of the Authority.

4 4 REASONS FOR CONCESSIONING Enable private sector involvement in ports development through investments and inflow of foreign capital. The inability of the Ports Authority to operate with cutting edge technology in line with international standards especially in Cargo Handling operations. Poor yard management no cargo or container tracking facilities. Cumbersome and bureaucratic cargo clearance process. Skewed distribution of cargo and vessel traffic resulting in overuse of infrastructure in Western Ports and under use of some facilities in the Eastern ports leading to premature obsolescence.

5 5 OBJECTIVES To increase efficiency in port operations To decrease cost of port services to stakeholders To decrease cost to the government for the support of viable port sector To attract private sector participation so as to free public resources for public services Make Nigerian ports the hub and preferred destination for West and Central African sub-region.

6 6 CONCESSION PROCESS HISTORY OF PORT REFORMS Technical Committee on Privatization and Commercialization Decree 25 of 1988 Its Observations Its Recommendations Large organization Adopt private sector business principles Unwieldy operations Create zonal structure for decentralized administration Lack of commercial orientation Establishment of subsidiary companies Inconclusive implementation Later revised

7 7 CONCESSION PROCESS RENEWED REFORM INITIATIVES BY WORLD BANK AND FEDERAL GOVERNMENT OF NIGERIA IN 2001 Diagnostic Study by Royal Haskonning / Dynamar International Associates, with mandate to: Update existing sector knowledge Identify key issues Generate viable options for reforms

8 8 CONCESSION PROCESS RENEWED REFORM INITIATIVES BY WORLD BANK AND FEDERAL GOVERNMENT OF NIGERIA IN 2001 RECOMMENDATIONS: Landlord Port Model Three Regional Port Authorities Slim Corporate Headquarters Clear roles for Federal Ministry of Transport, NPA Corporate Hqs. and Regional Port Authorities Separation of operations from regulatory responsibilities.

9 CONCESSION PROCESS 9 Appointment of CPCS Transcom as adviser to Bureau of Public Enterprise with responsibilities to: Restructure and Concession Reform

10 10 CONCESSION PROCESS GOVERNMENT ORGANS AND THEIR FUNCTIONS National Council on Privatization (NCP): The highest policy making body on reforms and privatization matters. Bureau of Public Enterprises: The secretariat and implementation organ of NCP Presidential Task Force on Port Reforms Guide the process Dialogue with Stakeholders Drive external challenges and inter agency issues relating to the reforms.

11 11 CONCESSION PROCESS TRANSACTION Delineate the ports into terminals and concession them to large independent terminal operators for years. Expression of Interest (EOIs) advertised in December applications (EOIs) received 94 Prequalified 24 concession transactions concluded Handing over of Terminals commenced 20 th March, 2006

12 12 CONCESSIONED TERMINALS S/N PORT/LOCATION OF FACILITY NAME OF CONCESSIONAIRE TITLE OF CONCESSION COMENCEMENT DATE TENOR OF CONCESSION A. 1 ENL CONSORTIUM APAPA TERMINAL C MARCH, YEARS 2 ENL CONSORTIUM APAPA TERMINAL D 3 A. P. MOLLER APAPA COTAINER TERMINAL LAGOS PORT COMPLEX 4 A. P. MOLLER LILYPOND CFS 5 APAPA BULK TERMINALS LTD. (ABTL) APAPA TERMINAL A " 10 YEARS MARCH, YEARS " 10 YEARS APRIL, YEARS 6 B. APAPA BULK TERMINALS LTD. (ABTL) GREEN VIEW DEVELOPMENT NIG. LTD. (GDNL) APAPA TERMINAL B APAPA TERMINAL (E) " 26 YEARS APRIL, YEARS 1 JOSEPHDAM & SONS (NIG) LTD. TCIP TERMINAL (A) 2 FIVE STAR LOGISTICS LTD. TCIP "RORO TERMINAL" TIN CAN ISLAND PORT 3 PORT AND CARGO HANDLING LTD TERMINAL [C] PORT AND TERMINAL MULTI SERVICE 4 LTD GRILMADI TINCAN ISLAND CONTAINER TERMINAL 10th MAY th MAY th MAY th AUGUST th MAY YEARS 15 YEARS 10 YEARS 25 YEARS 15 YEARS

13 13 CONCESSIONED TERMINALS C. S/N 1 PORT/LOCATION OF FACILITY NAME OF CONCESSIONAIRE PORTS AND TERMINAL OPERATORS (NIG) LTD. TITLE OF CONCESSION PORT HARCOURT TERMINAL (A) 2 BUA INTERNATIONAL LIMITED PORT HARCOURT TERMINAL (B) D. FEDERAL LIGHTER TERMINAL (FLT) 1 INTELS NIG. LTD. ONNE TERMINAL (B) FEDERAL OCEAN TERMINAL (FOT) 2 INTELS NIG. LTD. TERMINAL (A) E. RIVERS PORT ONNE PORT 3 BRAWAL OIL SERVICE LTD. FLT ONNE TERMINAL (A) FEDERAL OCEAN TERMINAL (FOT) 4 WACT TERMINAL (B) COMENCEMENT DATE 23RD JUNE, th JUNE, ND JUNE, ST JUNE, ND AUGUST ST SEPTEMBER, 2007 TENOR OF CONCESSION 15 YEARS 25 YEARS 25 YEARS 25 YEARS 25 YEARS 25 YEARS F. 1 INTELS NIG. LTD. TERMINAL (A) CALABAR PORT 2 ADDAX LOGISTICS NIG. LTD OLD PORT CALABAR 3 ECM TERMINAL LTD. CALABAR TERMINAL (B) 1 INTELS NIG. LTD. WARRI NEW PORT TERMINAL (B) 2,, WARRI OLD PORT TERMINAL (A) DELTA PORTS 3 JULIUS BERGER OLD PORT TERMINAL "C" 4 A.M.S OLD PORT TERMINAL "B" GREEN LEIGH 5 (Gultainer Bel) KOKO TERMINAL 21ST JUNE, TH MAY, ST AUGUST, TH JUNE, TH JUNE, TH MAY TH June, TH June, YEARS 25 YEARS 10 YEARS 25 YEARS 25 YEARS 26 YEARS 10 YEARS 10 YEARS

14 14 RESPONSIBILITIES Private Sector (Terminal Operators) Cargo Operations Engagement of Labour Investment in equipment Investment in terminal maintenance Insurance of concessioned assets

15 15 RESPONSIBILITIES Public Sector (Nigerian Ports Authority) Port Access Maintenance of Berths and Navigational Aids Provision and maintenance of maritime approaches (Canals, Breakwaters, Turning Circles etc.) Issue regulations and rules governing waterside safety within the Ports in accordance to applicable law. Provide pilotage, towage, berthing, unberthing and shifting of vessel services required by all vessels intending to call at the premises. Ensure that there s no delay or interference with the performance of the obligations of the concessionaire.

16 16 RESPONSIBILITIES Public Sector (Nigerian Ports Authority) Channel Dredging Waste Disposal Remedy latent defects which materially impair the terminals operational performance. Provision of access to the ports. Provide all infrastructure for the provision of utilities necessary to equip, operate, maintain, manage and repair the terminals. General security of the ports especially in the common areas. Obtain and keep all licenses, permits and warranties necessary for the terminal operator s obligations.

17 17 PROCEDURES AND MECHANISMS IN FORCE Dredging (Capital & Maintenance) deepening the channels from time to time to ensure NPA s advertised depth is maintained. Quarterly Bathymetric surveys to monitor siltation and production of navigation charts that can be passed to the United Kingdom Hydrographic Office (UKHO). Maintenance and surveillance of Aids to Navigation. Wreck removal Visual pollution monitoring Training Monitoring of concessionaires to ensure compliance.

18 18 PROCEDURES AND MECHANISMS IN FORCE REHABILITATION OF ACCESS ROADS

19 19 PROCEDURES AND MECHANISMS IN FORCE DREDGING OF THE CHANNELS

20 20 PROCEDURES AND MECHANISMS IN FORCE MARINE ENGINEERING

21 21 CHALLENGES POSED BY THE PROCESS Regulating the private operator. Need for capacity building (training and retraining) particularly technical employees and dockworkers and the quest for re-orientation. Difficulty in sourcing for funds for severed workers. Pension reforms.

22 22 CHALLENGES INTERNAL Financial burden of dredging activities Acquisition of land for future Port Development Power Generation/Distribution: Independent Power Projects (IPP) being considered Upgrading of common user facilities i.e. access roads, lighting, vessel traffic system Enhancement of the ICT through a common network with customs and other port users

23 23 CHALLENGES EXTERNAL Re-activation / provision of rail access to the ports Congested Port access roads Need for development and implementation of transport master plan Clear legal frame work for Port Reforms Urgent requirement for a commercial regulator Need for policy stability Harmonization of laws relating to various agencies & resolution of conflicts Issues of various surcharges that add up to port cost

24 24 CHALLENGES EXTERNAL Need to establish professional standards to govern clearing and forwarding, labour activities etc. Security: Access Control, particularly at the water front to check piracy in the channels. Nigerian Ports Authority Act: To give effect to the new status of the Authority and provide sufficient comfort concessionaires, the need for the passage of the amended Nigerian Ports Authority Act. Conflicting provisions of the Fiscal Responsibility Act and Nigerian Ports Authority Act: While the Fiscal Responsibility Act provides that 80% of operating surplus should be returned to the Federation Accounts while the Ports Act provides a reinvestment of same to expand operations.

25 25 BENEFITS OF THE PORT REFORMS Cost Savings as a result of transfer of operations to private Terminal Operators. Enhanced safety and security in the ports through individual terminal security, resulting in the reduction of human and vehicular traffic. Creation of new jobs in the port industry. Improved operational efficiency i.e. reduction in turn around time, waiting time, cargo dwell time and procurement of new plants and equipment. Increased returns to Consolidated Revenue Account. Return on investments from Joint Venture Businesses. Enhanced private sector participation in Greenfield Development.

26 26 BENEFITS OF THE PORT REFORMS LEKKI DEEP SEA PORT DEVELOPMENT

27 27 BENEFITS OF THE PORT REFORMS LEKKI DEEP SEA PORT DEVELOPMENT MARINE FACILITIES Length of quays Width of basin Water depth at the quays Diameter turning basin Width of access channel Water depth in channel Liquid Berth 1,500 meter 250 meter 14 meter 600 meter 150 meter 14 meter 1 (45,000 DWT) Container Berths 3 Storage area 73 Ha Dry Bulk Berth 1

28 28 BENEFITS OF THE PORT REFORMS IBAKA DEEP SEA PORT DEVELOPMENT Located in Ibaka Local Government Area of Akwa Ibom State. Has a total back-up land area of 5,125 hectares Natural Harbour 14meters chart dartum Numerous opportunities for potential investors

29 29 BENEFITS OF THE PORT REFORMS IBAKA DEEP SEA PORT DEVELOPMENT

30 30 BENEFITS OF THE PORT REFORMS OLOKOLA DEEP SEA PORT DEVELOPMENT

31 31 BENEFITS OF THE PORT REFORMS BADAGRY DEEP SEA PORT PROJECT

32 32 CONCLUSION Investment in the Nigerian maritime sector is conducive for local and foreign investors. Emphasis is placed on legal and trade facilitation regime that is predicable, fair and mutually beneficial to investors and the host communities. The reform also opened the doors for Deep Sea Port development through a variety of private sector investment schemes to expand port capacity. Tremendous and rewarding opportunities for discerning investors in infrastructure and development of new ports.

33 33 THANK YOU.