The Federal Government has ceded 60 per cent equity to investors interested in developing new ports in partnership with it.
The General Manager, Public Affairs of the Nigerian Ports authority (NPA), Captain Iheanacho Ebubeogu, said the arrangement would boost investors’morale and confidence in the sector.
Ebubeogu, who spoke on the ongoing reforms at the seaports, said in building new ports through Public-Private Partnership, the Authority has developed a structure that would ensure commitment to the project.
He said: “We have a structure where the prospective investors come up with 60 per cent of the cost of building the ports and the state where the port is domiciled takes 20 per cent and the Nigerian Ports Authority on behalf of the government, takes the remaining 20 per cent.
“The importance of making the investor come with 60 per cent, is that he must be sure that his outline business case is genuine and not going to turn the project into a white elephant. In most cases, if we leave the government to bring all the money, we may have problem of deciding where it should be located and its location becomes political and that will mean putting down money down the drain.
Ebubeogu learnt over time that a businessman who is profit-oriented must put down his 60 per cent if he is sure that his outline business case should be viable, then we shall join him.
‘’That is one of the advantages of that structure. The second one is that we will have the business component and attitude on how the port will be run we will get efficiency and everything that is expected of the port.”
On infrastructure, Iheanacho said though the NPA was not yet there, it is focused on addressing two key issues. He said the youngest of the ports that the Authority have was built 30 years ago, adding: “We have just celebrated the centenary of Port Harcourt Port.”
He continued: “There is what is called assumed design of the port and that is in response to the size of ships years back, but today ship owners are responding to the economies of scale by bringing bigger ships. So, what we are doing is modernising what we have to cope with the limit of the assumed design of the ports and venturing into building new ports, deep seaports with deeper drafts for vessels.
“It has two advantages, one is we will achieve making Nigeria the hub for West and Central Africa because the type of ships that will come there are those that will carry about 14,000 TEU (20-foot Equivalent Unit), a term used to measure a ship’s cargo-carrying capacity.
‘’Secondly, the cost of maintaining those ports will be reduced because the distance of the channels will be shorter and therefore, dredging cost, marking cost and all other encumbrances that make up the overhead will be drastically reduced.”
On corruption at the ports, he said it cuts across all agencies at the ports. “If you look at the port, it assumes two responsibilities. It has the supply chain component where the ports terminals and shipping companies belong. The port is also an international border post-led Customs and what everybody is doing is to ensure that we make the port to be electronically operated, to be ICT operated. With that we try to reduce to the barest minimum person-to-person contact that gives rise to corruption. If there is no person-to-person contact, corruption is drastically reduced. The NPA also has an anti-corruption committee and Servicom headed by a general manager and I’m sure other agencies such as Customs are doing the same. We try to ensure that we don’t compromise enforcement on the border posts.”
Chairman of Ports Consultative Council, Mr Kunle Folarin, said the government would provide an enabling environment to ensure productivity and reduce the cost of doing business.
“Besides, maritime security is also an arm of government and I think all these are being achieved. What we need to do more is to see that efforts are coordinated and all agencies of government are working to ensure that we arrive at the preferred destination,” he said adding that before the concession, infrastructure, productivity, security and modernisation of the ports are the issues that the NPA had to address.
“But you can see that every aspect of these issues have been tackled. Certainly, the issue of infrastructure is being attacked,” he added.
Information from The Nation was used in this report.