Sailing in the wrong vessel

Monday, November 16, 2015, was a day seemingly decreed to cause a stir among the operators of sea ports and terminals in Nigeria. On that day, the Executive Director, Directorate of Marines and Operations, Nigerian Ports Authority, (NPA) sent an internal memorandum to some of the top echelons of the maritime behemoth. Tagged “Handling of […]

Monday, November 16, 2015, was a day seemingly decreed to cause a stir among the operators of sea ports and terminals in Nigeria.
On that day, the Executive Director, Directorate of Marines and Operations, Nigerian Ports Authority, (NPA) sent an internal memorandum to some of the top echelons of the maritime behemoth.
Tagged “Handling of Oil and Gas Cargo at Julius Berger Terminal, Warri”, and signed by A.A Goje, the General Manager, Marine and Operations, on behalf of the Executive Director, the memo on its face value seemed a patriotic step to enhance government revenue at the ports. But even without acute intelligence, it is easy to see that the memo is a corrosive epistle to plunge the maritime industry into another major crisis that will draw litigations and have dire economic consequences for the country.
The NPA concluded that, “as an interim measure, the expected vessels to call at Julius Berger should pay $5.82 per tonne to prevent diversion of vessels to neighbouring countries”.
 A cursory look at this internal memo will in, palpable terms expose the hoax hypocrisy and contradiction inherent in every line. To begin with, there is nothing called OIL and GAS CARGO. From the port reform documents of 2006, through the memorandum of agreement binding all the concessionaires, there is nowhere that the phrase or term oil and gas cargo was used. Not only that, there is nowhere in NPA’s Annual Reports from inception that the term oil and gas cargo got a mention. It was not in their lexicon and has never been.
There are only three recognized cargo types and have always been in the print and lingo of NPA. These are Container, Bulk and General Cargo.
Another point in the memo totally inconsistent with NPA’s lexicon is the term “Oil and Gas Terminal.” Stakeholders, professionals and scholars know that there is nothing like oil and gas designated terminal in Nigeria’s maritime industry. It has never existed. What we have is multipurpose terminal, and all the terminals in the eastern zone, in Nigeria, are multi-purpose terminals and, therefore, can and have been handling general cargoes that include pipes and other items that are now dubiously tagged oil and gas cargoes.
The NPA claimed that while a multi-purpose terminal may handle a so-called oil and gas-related cargo and pay $1.21 per tonne, a so-named oil and gas designated terminal would pay $5.82 for the same cargo. This is deceptive. This is simply so because the ports and terminal operators, after the concession exercise, negotiated with the federal government and an agreement was reached to pay $1 per tonne, for the cargo handled, to the government before the terminals were handed over to the owners. Over time, it was increased to $1.21. Of critical importance is the fact that these terminals charge $7.40 per tonne for the discharge and loading of cargo and then remit the agreed $1.21 to the government.
 Also important to note is that the $7.40 charged by terminal operators is for direct discharge, devoid of rent or transfer charges from the ship to the stacking area. The only exception to the port rule, the only organization that cargo owners are compelled by NPA to patronize at far higher costs is INTELS. This is the only terminal that charges $65 per tonne and remits only $5.82 to the federal government’s vault.
The cost of doing business with INTELS, it must be noted, is astronomically higher than those of other terminals for the simple reason that while direct or indirect discharge of cargoes is optional for the cargo owner, INTELS makes indirect discharge compulsory. By this stance, cargo owners are compelled to pay for transfer charges from the ship side to the stacking area. NPA’s memo of November 11, is therefore a legitimization of INTELS charges.
The terms, oil and gas designated terminal and oil and gas cargo therefore seem invented by INTELS in cold complicity with the NPA to justify this staggering charge that cargo owners have consistently bemoaned.
In 2006, when the NPA started diverting to INTELS ports what it dubbed ‘oil and gas cargoes’, the then President, Olusegun Obasanjo intervened swiftly to put an end to what portends an ominous economic prognosis.
A panel set subsequently up by Obasanjo and headed by Dr A.S.P Sekibo submitted its report dated May 16, 2006. In a clear patriotic sense of purpose, Obasanjo expelled INTELS from Nigerian ports. Not only that. The committee in its recommendation, among others, emphasized the need for government to curtail the proximity of INTELS management to the political class. The report also recommended that “importers of oil and gas-related cargo should be free to choose their ports of preference”.
But this was not the end of the ritual of economic sabotage and impunity at the ports. In 2008, under President Umaru Musa Yar’dua, some officials of the Ministry of Transport, NPA and INTELS persuaded the then Minister of State for Transportation, Prince John Emeka, to unilaterally reverse Obasanjo’s directive.
But again, Yar’dua treated the matter dispassionately when he was petitioned by aggrieved port users. The late president, re-affirmed Obasanjo’s government for importers to freely choose the ports that appealed to them. He cautioned the minister, and ordered him to publish his government’s position in a national newspaper.
But successor, former President, Dr. Goodluck Ebele Jonathan succumbed to the audacity of impunity and disingenous elements when on April 27, 2015, the NPA sent a directive to all port terminal operators, shipping companies, etc, to the effect that ‘oil and gas-related cargoes must berth at the designated terminals in Onne, Warri and Calabar. These three ports are controlled exclusively by INTELS. (NPA claimed that this was the directive of former President Goodluck Jonathan in the twilight of his administration)
 Naturally, this directive convulsed the world of the ports operators and they besieged the courts with a flurry of litigations to seek redress. These cases are still pending in the law courts.
NPA’s memo of November 11, 2015, is an endorsement of impunity at the ports. The imposition of fee on terminal operators, jangles with the objective of the port reforms, which is to enhance competition and reduce the cost of doing business at Nigerian ports.
This imposed price regime is certain to drive importers and their cargoes to the ports of neighbouring countries. Needless to add that this will be a bad omen for the terminal operators, NPA and indeed the Nigerian economy at large.
Zik Zulu Okafor, a public affairs analyst, wrote from Lagos.