Containers-at-the-port19032At a time port users are putting pressure on the Federal Government to intervene in the high cost of doing business at the seaports in Nigeria, concessionaires, who took over cargo handling operations after the port concession of 2006, are projecting a further hike in their charges.

The concessionaires, under the aegis of Seaport Terminal Operators Association of Nigeria (STOAN) have told the Nigerian Ports Authority (NPA), landlord of the ports, that terminal handling and storage charges have become too low to sustain meaningful investment at the seaports.

At a meeting with the Executive Director, Marine and Operations of NPA, Engr. David Omonibeke, in Lagos last week, the concessionaires urged the NPA to give them a free hand to adjust their local charges in line with inflation rate in the country.

Representative of STOAN, who is also the managing director of Tin-Can Island Container Terminal (TICT), Yehuda Kotik, said it is only fair that terminal operators are allowed to increase their local charges according to the changes in the cost of their operations.

“Once a year, based on the inflation of last year we have to increase our local charges exactly according to inflation…We don’t need to ask to be allowed to increase our charges. We should be allowed that every year, 1st January, our Terminal Handling Charges and delivery should be identical to the yearly inflation percent,” Kotik was quoted as saying.

He also spoke on the challenges facing concessionaires and identified poor clearing and customs processes as the main reasons for the backlog of containers now causing congestion at the port terminals.

The concessionaires also said that many consignees are using the ports as storage areas due to the low storage charges. The STOAN members lamented that they are facing a lot of hurdles trying to keep to the terms of their lease agreement with the government in the light of the nation’s economic and infrastructural problems.

Other issues brought up at the meeting were insecurity, human influx into the ports, epileptic power supply, among others.

But Omonibeke has promised that the NPA is committed to ameliorating the problems, even as he assured the concessionaires that he will take their complaints to the management.

Addressing journalists after the meeting, Omonibeke said that the NPA was not unaware of the challenges confronting the terminal operators. He said that the meeting was to give the terminal operators opportunity to say directly what the challenges were and deliberate on how to manage them to reduce congestion at the ports especially with the fast approaching yuletide season.

Meanwhile, importers and their clearing agents have severally criticised what they described as government’s failure to reduce cost of import clearance seven years after ports concession, saying that cost has increased by more than 700 per cent.

“Can the Minister of Transport patriotically look at the faces of Nigerian port users and say yes to the actualisation of anticipated advantages and benefits of the port reform proposal presented to the Federal Executive Council (FEC) in 2005, which the government accepted, hence it approved the Landlord port model at the take off of the port reform in Nigeria?,” said National President of National Association of Government Approved Freight Forwarders (NAGAFF), Eugene Nweke, in a statement made available to Daily Independent.

Some of the anticipated benefits presented to FEC, include: reduction of port charges by 20-30 per cent, achievement of quick clearance of cargo at the ports, reduction of cost of doing business at the port by 5-13 per cent yearly without hesitation and to make Nigeria the hub for international freight and trade in West and Central Africa.

Nweke noted that before the port concession in 2006, cost of Clearing a 20 footer container without storage/demurrage charges was N11,715.50 and 40 footer amounted to N18,158.50. Whereas in the post concession era, where private operators took over cargo handling activities, cost of clearing a 20 footer Container without storage/demurrage jumped to N70,000.00 and cost of clearing 40 footer container climbed N120,000.00.

The comparative difference between pre and post concession clearance cost at ports in Lagos stands averagely at N58284.50 for 20 footer, while 40 footer is N101,841.50.

Information from Daily Independent was used in this report.