The Minister of Transportation, Mu’azu Jaji Sambo, over the weekend, placed the responsibility of approving ports concession agreements renewal on the Nigerian Shippers Council, thereby setting in a distortion that might derail the entire port concession renewal process, writes TOLA ADENUBI.
Since the Port Reform Act came into force in 2006 and handed over the various port operation of Nigerian seaports to private investors, the renewal process has always been between the Nigerian Ports Authority (NPA) and the various terminal operators with the Bureau of Public Enterprise (BPE) and later the Infrastructure Concession Regulatory Commission (ICRC) overseeing the process.
During his maiden tour of the ports as Minister of Transportation in August 2022, Alhaji Mu’azu Jaji Sambo had directed the NPA to complete the various port concession renewal within 45 days.
However, the Minister’s U-turn during a tour of the Nigerian Shippers Council (NSC) at the weekend seems to want to distort the port concession renewal giving that new parties that were never part of the process are being asked to handle the process.
Speaking at the NSC at the weekend, the Minister of Transportation placed the responsibility of approving ports concession agreements renewal on the Nigerian Shippers Council and charged the agency to be meticulous in the screening process and to drop any company that could not satisfy the conditions for renewal of the agreements.
“The renewal of the concessions should be based on the performance of the company that was handling it. Get the ports concession agreements that were signed in 2006, identify all the key performance indicators (KPIs) for each terminal that is due for renewal. Look at their performance in terms of meeting these KPIs including development plans, cargo traffic, revenues and other obligations that were incumbent upon them.
“Where a terminal operator’s concession should not be renewed, you must be bold enough to say it should not be renewed because they have not been able to match the target that were set for them and we will look for other companies that will meet the conditions,” the Minister of Transportation told the NSC management in a statement signed by Henshaw Ogubike, Director (Press and Public Relations) of the Federal Ministry of Transportation.
Concession renewal concluded
Checks by the Nigerian Tribune revealed that during his maiden tour of port facilities in Lagos in August 2022, the Minister had directed the NPA to conclude the various port concession renewal process within 45 days.
Buoyed by this directive, the NPA had gone ahead to review the various port concession agreements and renewed those already expired after being cleared by the Infrastructure Concession Regulatory Commission (ICRC).
Documents made available to the Nigerian Tribune also indicated that the Ministry of Transportation and the ICRC confirmed that the concession renewal process was said to have complied by all the rules and were duly awarded the appropriate certificates by ICRC, which is the constitutionally mandated agency for that purpose.
According to a memo from the ICRC, dated December 30, 2022 and referenced ICRC/HQ/P/S.04/266, the Minister of Transportation had been fully briefed on the conclusion of the concession agreements.
The memo reads in part, “The Minister may wish to note that the Commission had given approval to the Nigerian Ports Authority (NPA) for the renewal of the terminals concession through letters referenced ICRC/DG/50/S.52/118 dated September 24, 2021, subject to obtaining all necessary approvals including the Federal Executive Council for ease of reference, and attached copies of the letters.
“The commission’s approval was given based on the business case submitted to the commission by the NPA and subsequent negotiations held between the government team (NPA, ICRC, the ‘transaction adviser’) and the affected terminal operators.”
Distortion
The Minister’s latest U-turn which placed the port concession renewal in the hands of the NSC might derail the entire port concession process, a source in the nation’s maritime industry warned.
In the words of the source, who spoke on the condition of anonymity, the minister is turning logic upside down by attempting to drag the Shippers’ Council into an agreement that had been concluded by NPA and ICRC.
The source stated that while the process of agreement was at the preliminary stage, the Shippers’ Council was duly represented in the inter-ministerial committee set up by the immediate past Minister of Transportation, Rotimi Amaechi, to follow everything to the end.
“Mind you, the inter-ministerial committee set up by Rotimi Amaechi had submitted a report over a year ago and in that committee, the Shippers’ Council was represented by Chief Agu and Mrs Ifeoma.
“So, for the current minister to turn around now to say that the Shippers’ Council was not carried along does not arise, because, one, they were represented, even though, legally speaking, they are not a party to the agreement and they have no part to play in the concession agreement. Their role in the Act setting up Shippers’ Council does not include the role the minister is giving to them.
“They are not technically equipped to know what NPA or the terminal operators are doing. Their job does not include the role the minister is giving to them. Whatever the minister is doing is totally illegal and has no place in law. It is an overkill.
“Secondly, even if they were, they were a party to the committee that okayed the renewal because they were fully represented by no less a person of Chief Agu and Ifeoma. That means they already confirmed. What does the minister want them to confirm that has not been confirmed?
“The inter-ministerial committee comprises BPE, Federal Ministry of Justice, Ministry of Finance, Budget and National Planning, NPA, ICRC, and Shippers’ Council. The committee, headed by the Permanent Secretary, Ministry of Transportation, Dr Magdalene Ajani, was to check and recommend whether the concessionaire had fulfilled all the terms and conditions,” the source explained to the Nigerian Tribune.
Going down memory lane, the source noted that prior to the ICRC Act, it was the Bureau of Public Enterprises (BPE) that was solely responsible for the port concession renewal process.
“In this particular case, the concession is for five terminals, ENL (two terminals), Port & Cargo Handling Services (one terminal), Josepdam Port (one terminal) and AMS, in Warri port (one terminal).
“Under the concession agreement, the concessionaire is supposed to indicate whether he wants to renew the concession or not three years before the expiration. Then if both parties are willing to continue with the concession they will now start the process of the renewal.
“It is supposed to be renewed at least two years before the expiration of the agreement. If NPA, the landlord, is not renewing the agreement two years to the expiration, the concessionaire will start handing the facility over to NPA.
“Bear in mind that the concessionaire who is still interested in the concession must indicate in writing at least three years before the expiration of the concession.
“In this case, all the companies mentioned earlier indicated their willingness to continue with the concession at the appropriate time. They fulfilled all the terms and conditions but, as it were, the then Minister of Transportation, Rotimi Amaechi, decided not to allow the concession to go through the normal process.
“The National Assembly even had to intervene. It summoned the Ministry of Transportation and all the regulatory agencies – ICRC, BPE, Shippers’ Council – to state why they were not renewing the concession.
“The National Assembly directed them to renew the agreement with a deadline, which eventually was not obeyed. In the course of it, the Ministry of Transportation granted lease of extension, first six months and another six months. But the National Assembly said the extension granted was illegal and then mandated the Ministry of Transportation to renew immediately, which of course was not done.
“Then came a new minister, Engr Sambo. The new minister instructed NPA to ensure that the concession was renewed within 45 days, and as it were, NPA needed to get a compliance certificate from ICRC, which they had since issued. ICRC had issued compliance certificates that the concessionaire complied and okayed the renewal.
“Moreover, the agency that is mandated to confirm everything, the ICRC, has done its report, which was received by the Minister of Transportation. Sincerely, asking the NSC to handle the port concession renewal might derail the entire process,” the source further explained.
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