Nigeria leads way with concessions

The progress made through port privatisation has been undermined by customs delays, writes Steve Cameron

During the last three years. Nigeria undertook one of the biggest concessioning processes in the world, with 26 concessions granted – and the major container terminal concession in Apapa and Lilly Pond ICD going to APM Terminals. Up and down the coast of West Africa the majority of major container terminals have now been concessioned with Bollore (the previous owner of Delmas) and APM Terminals winning, either outright or in consortia, the concessions in Abidjan, Tema, Lagos, Douala and Luanda. DP World managed to enter West Africa by winning the concession in Dakar in early 2007, but at present the majority of the facilities are run by Bollore and APM Terminals, and some observers argue this is too much concentrated into the hands of too few. The concessioning of Nigeria’s terminal operations has been one of the biggest undertakings in global privatisation. The Canada-based CPCS provided advisory services to the Nigerian government to develop the country’s port sector into an efficient and competitive industry. Between 2003-2006, CPCS designed and established a general transport sector regulator, restructured the Nigerian Ports Authority (NPA) and concessioned all 25 terminals in line with the landlord model. The privatisation of all cargo handling services has been one of the most successful in Africa, transforming the port sector and raising over US$3bn in fees and royalties for the government.

APM Terminals won the Apapa container terminal, bidding more than three times that of P&O Ports and others. Since APM Terminals commenced operations at Apapa in 2007, berthing delays have reduced from 30 days to a few days or less. The number of moves per day has increased from an average of 600 in June to 750-850 by August. Gate moves are up from 250 to more than 450 per day. While some exporters and importers have complained that the improvements have not been as significant as expected, it is worth noting that the congestion surcharge of $600/teu has been dropped, together with the terminal emergency surcharge of $100/teu. It is no longer necessary to play the game of "where’s my container", when boxes were block stacked and consequently disappeared for weeks at a time. Clients that have their delivery order and paperwork in order can generally receive their containers within 24 hours, says a source from a major line. At the nearby Tin Can Island Port Complex, the Grimaldi Group has developed a ro-ro and multipurpose terminal on a BOT basis. The project consists of two berths capable of handling large vessels of up to 11 metres draught, with 20ha of stacking area. While other ro-ro operators are calling at Lagos/Apapa, Grimaldi says its facility is the only one specifically dedicated to vehicles, high and heavy equipment, and project cargo. Also at Tin Can Island, smaller concessionaires such as Seafax and Fivestar provide alternative services. CPCS was additionally appointed by a company called Nimek Investments to undertake a US$500,000 feasibility study of a seaport and industrial park on Snake Island, which is expected to take six months to conclude. While customs has extended its working hours, they still represent less than 50% of the 24/7 that was promised at the time of concessioning. Despite the introduction of container scanning equipment, on top of the 30% of containers picked for scanning customs is still inspecting another 30-40% of containers, meaning about 70% of all containers being scanned or upturned. This high volume is hugely disruptive to terminal operations given the additional container handlings. Marine services also still have a long way to go before ships can arrive and sail without delay.

These issues of customs inspections and maritime services are effectively negating the benefits of progress that the terminal concessioning has made. Until they are dealt with by the government they will continue to be a hindrance to further port productivity progress and Nigerian trade efficiency. cs