Minister of Marine and Blue Economy, Gboyega Oyetola said on Thursday, March 14, that in view of the political will shown by President Bola Tinubu to develop the nation’s maritime sector, the government will not sit back and watc the ports to completely collapse
The minister also said that the government required about 1.1 billion dollars reinvestment in the nation’s port before renewing the concession agreement of the ports.
Oyetola, who appeared before the House of Representatives Committee on Privatisation, said at the moment, the concessioningnod the ports was being delayed to allow the government conclude it’s reinvestment plan nd reconstruct the ports to meet to required standard.
Represented by the Permanent Secretary in the Ministry, Oloruntola Micheal, the minister said the present agreement between the government and concessionaires was unacceptable as it falls below the required standard
The minister said: “Under the mordenisation programme of the Port, the Ministry is envisioning a major reinvestment in the port system for it to meet the expected service delivery that is commensurate with the image of Nigeria and the level of international business that Nigeria is with.
“The current situation at the port does not meet the required standard. The investment quatum that is expected to be invested in the port will require a major rethink of the concessioning of the ports.
“As a result of that, the Ministry, in concert with the agency, the NPA in particular has begun a process of reinvestment package for the port. It means that the Ministry must factor into whatever relevant concessions that have to be made into that larger vision or else, we my progress further in error and put that reinvestment plan at risk.
“It must be put on record that what you have as a proposal which has been stalled is yet to be given approval by government and has been considered by the ministry to fall below the expected threshold both in terms of revenue and in terms of investment. The ministry is expectant that it will be able to conclude investment plan and bring on board necessary modalities for the consideration of these concessions”.
Responding to questions, he said: “The extension alluded to expired before May 29, 2023 and that was before the coming of this government. The Ministry of Marine and Blue Economy which was created by this government has taken steps to review what it met on ground and what we have is not acceptable.
“Anybody who wishes our ports systems better will ask for something different. A major reinvestment is necessary and the Ministry does not want to truncate the plan for that major reinvestment on the alter of commitment to this agreement.
“There is nothing in that agreement that says Nigeria must renew. It is not at my level that the decision will be taken. The decision and process of review will be taken, but the larger interest of government, the people of Nigeria, the port system is over riding.
“We are making earnest steps to finish the arrangements to secure funding for this reinvestment. The terms of those funding will be factored into whatever agreement that we must sign because the lenders will lend to us on terms we must agree to and so, we must do one before the other.
“The operators at the port are still running and paying revenue to government on the basis of the agreement that expired. So, the government is not losing any revenue and the operators have not been displaced. If the interest to do what is right is uppermost, then no status quo should be ruffled.
“The stand of the Ministry is that we must finish the arrangement of major reinvestment in the interest of the port and the better interest of the country. As soon as it possible, that is what we have to do. What we may do is to grant short term extension to cover for the time that is required.
“Our focus is on the larger goal which is the reinvestment. Under the previous agreement, NPA has the responsibility to fix the infrastructure at the port. If you want to do port reinvestment, these are long term investment and cannot be based on short term because of the quantum of resources that are required.
“We are on the same page with our agency. Our larger goal remain sacrosanctand is in the better interest ot even those who may operate the ports. What we prefer are investors and concessionaires who meet the required standard. What is on the table is to consider short term renewal while we make plans to conclude the reinvestment arrangements.
“We are not going to seat back and allow the untold to happen. Mr President has deposited the biggest political will in this sector by creating a dedicated ministry for this sector. We must show results and that is what the ministry and it’s agencies have resolved to do.
“We are not resisting renewing this agreement. We are only saying allow the ministry put in place a reinvestment plan for the port in the better interest of Nigeria, the port system and Nigeria at large.
“The Ministry is saying it should be allowed to do what is right and just. The port require a major reinvestment beyond what we have witnessed in the last decade or more. That is more important than what is being taunted”.
Managing Director of the Nigeria Ports Authority (NPA), Mohammed Bello Koko said the proposal for renewal of the concession agreement for the ports was submitted to the Federal Executive Council in February 2023.
He explained that the FEC put the renewal on hold demanding additional information, adding that one of the issues raised by FEC was investment as it relates to existing infrastructure at the ports.
He said “In view of the fact that there was more work to be done, we gave a six months short extension for the terminal operators to continue to operate and so, government was not losing any revenue and they were still paying what they were paying before to the NPA.
“At that time, a physical survey was conducted on the infrastructure at the port and we realised that all the ports, especially the Apapa and TinCan where these five terminal operators are working were about to collapse.
“We observed then, the imminent collpase of the port locations. We realised that there was need for complete rehabilitation of the ports. The plan is to move into the channel by three meters and that completely changed everything.
“Currently, the estimate is about 1.1 billion dollars and discussions have started and about to be concluded so that we get funding from. Those that have shown interest. The loan will be for 15 years with two to three years maritorium during construction.
“That is why we felt that there is need to evaluate what was discussed about six years ago. At the end, then parameters will change and the conditions will no longer be the same. The ports are working, but not fully because part of it has collapsed, but to ensure continuous operation, we felt there is need for reconstruction and within the next few months, the agreement will be signed and construction will begin.
“Right now the port is collapsing. That is why we are saying it has to be reconstructed. In ENL which is one of the terminals, belt 7 has completely collapsed and not in use. If you go to TinCan, belt 4,8,9 and 10 have partially collapsedcollapsed and these are the places we went to renew. That is why we are saying there is need to critically look at what need to be done.”
But the Acting Director General of the Bureau for Public Enterprise, Ignatius Ayewoh believe that the government reinvestment plan should stop the renewal process. Of the concessioning exercise.
He said: “I want to say that BPE was involved completely in this concessions arrangement and till date, monitoring has been taking place and some of the status report as per performance will be provided for record purpose.
“An interagency committee was set up to see to the concessions and some of the renewals made. Some are still ongoing, some have expired. The concession agreement hs provision for renewal as well as retenderetender. In terms of performance, we can say that the state of the port is no longer as derogatory as it used to be.
“If you go to the ports, you will see that a lot of mordenisation has taken place and computer is at ion has taken place in most of the terminals. This concession is an advantage to Nigeria in terms of where we were before and it’s is a better place than we met it.
“We are not against reinvestment and Improvement. I heard the Ministry say finds will be required and that is why we are doing the concessioning. If it is concessioned, the private aspect must invest finds and we must give a post acquisition plan which is what we must expend.
“We recognised that some. Of the assets there must have depreciated. But with a renewal, you will be able to give what you want to do. We cannot leave it and begin to do short term and at the end, nothing is done”.
Chairman of the House Committee on Privatisation and Commercialisation, Ibrahim Hamisu Chidari said the Ministry must put measures in place to ensure that government does not lose any revenue as a result of the delay in renewing the conncession agreement.
He said: “After the expiration of the agreement in 2021, the terminal operators were given a six months extension twice and after that, there has been no extension. We don’t want them to continue to operate illegally because there must be no vacuum.”
The minister however said that a six months extension will be given to the terminal operators to operate legally, adding that all plans by the government should be concluded within the six months period.