Hon. Ifeanyi Ugwuanyi, Chairman, House Committee on Maritime
The transport sector as a whole, beginning from road, rail to sea, has no regulator, a development that has placed the fate of the consumers of the various services of the sector on the service providers. But a bill on the establishment of a National Transport Commission (NTC), pending before the National Assembly appears to be the only hope for consumers of transport services, reports Francis Ugwoke
The nation’s transport sector has not been lucky. The present state of the industry, including road, rail and the seaports show that it is one area where stakeholders have had to contend with so many issues. And this is because the sector has no economic regulator, a development that poses a big challenge to the nation’s transport ministry. The problem has always been there, and as one observer would put it, Nigerians are used to any bad situation. Operators of commercial transport have been lords to themselves. And for the rail services, one can understand as the services have been off and on, and never reliable.
But if the seaports had no regulator prior to concessioning of the ports, the argument is that the situation cannot be allowed to continue after the ports were leased to private operators. And this is for obvious reasons. The current situation in the sector is that shipping companies and terminal operators have been having a field day with high tariff regime that has impacted heavily on shippers in the country. It is even worse on the road transportation area. In all, the result has been high cost of goods and services transferred to the final consumers and indeed commuters. The expectation before the reform programme in 2006 was that the ports industry would be sanitised with cost of doing business better than what was the case before , but this has not been so.
The worry of industry stakeholders is that the Federal Government has not helped matters with the conflict between the National Assembly and the Transport Ministry on the Ports and Harbour Bill. While the Bill has gone through the first reading in the Senate and the House of Representatives, the Ministry of Transport is still working on a Draft of the Bill which it said will first go through the Federal Executive Council (FEC) before being sent to the National Assembly. To industry stakeholders, this will indeed delay the whole process of giving birth to the much desired regulator in the transport industry as a whole. Except of course, if the National Assembly ignores the executive bureaucracy and goes ahead with what is already before it.
Types of Transport Regulation
Experts hold the view that in the transport sector, there are four areas that require regulation. These include economic, technical, environmental and administrative. What is currently being sought at the National Assembly for the ports industry is economic regulator or commercial regulator. What is not clear is whether there will be one regulator for the whole transport industry. But the regulator as it affects the ports is expected to intervene in all areas of operation, in terms of setting or controlling tariffs, revenues or profits, controlling market entries or exits.
In the shipping sector, the Nigerian Ports Authority (NPA), terminal operators , shipping companies and freight forwarders, truck owners all have tariffs and charges. But the worrisome thing is that there is no agency that checks them to ensure that their charges and tariffs are competitive.
Road, Rail Sector
In the rail sector, a similar thing happens as the Nigerian Railway Corporation sets its own tariff without any agency regulating it. In the road sector, it is the same as there is no regulator.
The truck owners can fix any transport rate and the importers must comply or their goods will remain in the ports. And outside the ports, commuters have had to suffer in the hands of transport operators who can at any point in time decide to collect any rate they desire.
Quality of Services
Whether in the shipping sector, rail or road sector, the common issue is the unreliability of services offered. And the matter is worsened each day as there is no agency to check the services providers as they decide what quality of services to provide. This explains why importers will still be forced to pay for demurrage at the ports even in cases where the fault was either the shipping companies or terminal operators whose poor services may have been responsible for the delay of goods delivery, like in the case of positioning containers for examination. Lack of enough cargo handling equipment has led to many importers spending more time in the ports in which they are charged demurrage in most cases.
Checking Market Entries and Exits
In the shipping industry, stakeholders complain that each agency sets its own standards for entry into and exit out of the sector. Incidentally, there is not one agency that plays the role of checking these agencies and their customers, a shipping expert who pleaded anonymity told THISDAY.
Way Forward by Experts
Noting that there is regulatory vacuum in the transport industry, stakeholders said that it is time to fill this vacuum for the benefit of the national economy and the sector. Calling for the establishment of a National Transport Commission (NTC) to fill the vacuum, a maritime economist, Chief John Adekoya said that the Federal Government has two options. Adekoya said government can either build a new commission from the scratch or it can transform one of its existing agencies to perform the function of the commission.
He argued, “a cursory look at existing federal government agencies would show that the Nigerian Shippers Council is best suited to perform the much needed economic regulatory functions in the transport sector due to its experience in the area of regulation of local shipping charges”.
He however argued that the “option of setting up an economic regulator from the scratch would amount to a duplication of functions of the NSC and constitute an unnecessary cost burden on the government”. On how to transform NSC into a regulator, Adekoya said there were two ways, adding that it could be through the National Transport Commission Bill before the National Assembly or pursue the amendment of the extant Shippers Council Act to give the Council express economic regulator functions.
On how the interest of Nigerian shippers will be protected if the Council is transformed, Adekoya said that the agency will be expected to create a more level playing field for suppliers and users of transport services for the advantage of shippers.
He also said that under this arrangement, there ought to be adequate consumer protection activities within the functions of an economic regulator.
He equally added that the economic regulator will empower shippers through the encouragement of active private sector participation of trade groups and other organised private sector organisations. He observed that already, the Council has created Shippers Associations which contribute in solving part of shippers problems with the introduction of Cargo Defense Fund.