The Federal Government has proposed to spend about $1billion for the rehabilitation of the nation’s ports.
The Minister of Marine and Blue Economy, Gboyega Oyetola,
who stated this while addressing the House of Representatives Committee on
Privatisation on Thursday in Abuja, also noted that the country has not
benefited from port concession.
He said this was due to the inadequate infrastructure
upgrades, with many ports nearing the end of their lifespan, hindering
efficient operations.
The minister, represented by Permanent Secretary, Oloruntola
Michael, emphasised that during the rehabilitation process, the ministry would
strive to prevent complete port shutdowns.
He said: “The position of the ministry is that any further
concession at the ports should be predicated on the larger vision and desire to
reinvest in the ports and modernise, reconstruct the deteriorating port
infrastructures for effective, efficient and competitive performance.
“The investment required to achieve this is estimated in
excess of $1bn. It is therefore expedient to ensure that any step to be taken
is fitted within the long-term re-investment plan.
“The dream to achieve a modernised port is paramount and
sacrosanct. The concession agreement to be entered into with any investor or
operator must align with this vision. In this regard, the Nigerian Ports
Authority is committed to the process and is expected to actualise this vision.
“The agency’s review will determine the approximate value of
investment to be made for the ports and corresponding tenor to be granted to investor/operator.
“During the course of rehabilitation the ministry would
ensure the ports are not completely shut down.”
Furthermore, Oyetola noted that in 2005/2006, the Federal
Government embarked on ambitious port reforms aimed at revitalizing Nigeria’s
maritime sector, adding that the move was to bolster operational efficiency,
increase productivity, boost government revenue, attract investment, and
facilitate technology transfer.
He noted that the reforms led to a comprehensive
restructuring of the nation’s port infrastructure, adding that six port
complexes in Lagos, Port Harcourt, Calabar, Onne, and Warri underwent a
significant transformation, with the creation of 26 terminals.
According to him, Key to the success of the reforms was the
Lease Agreements signed between the NPA and Private Terminal Operators,
facilitated by the Bureau of Public Enterprises.
“These agreements, spanning periods of 10 to 25 years,
provided a stable framework for private investment and operational management”,
he added.
He also said that under the adopted landlord model, the NPA
retained ownership and administration of port lands while delegating
operational responsibilities to private operators.
Oyetola noted that the five expired leases were initially
granted a ten-year concession at Apapa, Tincan Island and Delta Ports.
He mentioned that five-year extensions were granted to
terminal operators under Section 25 of the Port Act to compensate for budgetary
constraints and the NPA’s failure to fulfil certain lease agreement
obligations.
Other challenges highlighted included NPA’s inability to
meet advertised vessel reception depths, shifts in government policies, lease
property encumbrances, waterway insecurity, and deteriorated port access roads.
Oyetola emphasised that the extension initially expired in
2021 and was subsequently renewed twice for six-month periods.
He highlighted that terminal operators have now requested
that the NPA renew the concession agreement, which has been forwarded to the
ministry by the NPA.
“On examination of this request by the Ministry, it was
observed that 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.
“Their investments in Nigerian ports over the past 15 years
are deemed to be grossly inadequate to boost the port’s productivity, and the
returns rendered to the government were mediocre at best according to The World
Bank report Nigeria – Ports Concession Assessment Framework and the Crown
Agents UK report NPA Concessios and Joint Venture Agreement – Final Report.”
Both reports also scrutinised the absence of a maintenance
regimen aimed at preserving asset value in line with regular depreciation,
resulting in decreased port productivity over time.
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