The federal government has revealed that it has proposed a $1 billion investment for the rehabilitation of the nation’s sea ports.
The Minister of Marine and Blue Economy, Gboyega Oyetola, said the government has not achieved the maximum benefits to be derived from the port concession due to inability to improve the port infrastructure to the desired standard for efficient operation, most of which have or are approaching the end of their life span.
The minister, who was represented by Permanent Secretary, Oloruntola Michael, disclosed this on Thursday when he appeared before the House Committee on Privatisation.
He, however, added that during the course of rehabilitation the ports, the ministry would ensure the ports were not completely shut down.
Oyetola recalled that the federal government embarked on Port reforms in 2005/2006 in order to enhance operational efficiency, improve productivity and revenue accrual to government, attract investment to the port sector and technology transfer, among others.
He stressed that the reform resulted in the delineation of the six port complexes in Lagos, Port Harcourt, Calabar, Onne and Warri into 26 terminals and transfer of cargo operations, which was hitherto performed by the Nigerian Ports Authority (NPA) to the Terminal Operators that emerged through competitive bidding process.
The minister explained that this culminated in the Lease Agreements signed between NPA (Lessor) and Private Terminal Operators (Lessee) with the Bureau of Public Enterprises as the Confirming party for a specified period ranging between 10-25 years.
He added that, “The Landlord Model” was adopted where the lands for port development and related activities within areas declared as ports are owned and administered by NPA with responsibilities also assigned to the private operators.
Oyetola noted that the five expired leases were initially granted a ten year concession at Apapa, Tincan Island and Delta Ports as follows: ENL Consortium Limited, Terminal C, Apapa effective from 3rd April, 2006; ENL Consortium Limited, Terminal D, Apapa effective from 3rd April, 2006;Port & Cargo Handling Services Limited.
Others are: Tin Can Island effective from 9th August, 2006; Josepdam Port Services Nig. Limited, Tin Can Island effective from 9th August, 2006; and Associated Maritime Services Ltd, Terminal A, Warri effective from 23rd November, 2006.
The minister revealed that extensions of five years were however granted to compensate the above Terminal Operators in accordance with Section 25 of the Port Act due to budgetary constraints and the NPA’s inability to discharge some of its obligations as stipulated in the lease agreements.
He pointed out that other challenges included inability of NPA to meet the advertised depth for vessel reception, changes in government policies, encumbrances of lease property, insecurity on the waterways and collapsed access roads to the ports, among others.
Oyetola stressed that the extension expired in 2021 and further extended for a six month period twice, noting that the Terminal Operators have now approached NPA to renew the Concession Agreement, adding that this was forwarded to the ministry by NPA.
Adedayo Akinwale
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