A Rousing Presidential Endorsement of Nigeria’s Amazon Driving Bold Port Reforms

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Managing Director, Nigerian Port Authority (NPA), Hadiza Bala-Usman

HADIZA BALA-USMAN

The call on the Nigerian government to demonstrate policy clarity, adhere to the rule of law, enforce contracts, remove bottlenecks around project execution and retain foreign direct investment, had fallen on deaf ears until the appointment of Hadiza Bala-Usman as the managing director of the Nigerian Ports Authority. Since she assumed office, Bala-Usman has embarked on bold reforms. Her recent re-appointment for another five years means Nigeria’s desire to be the hub in West Africa will be achieved, writes Eromosele Abiodun

Recently, PresidentMuhammadu Buhari re-appointed Hadiza Bala-Usman as the Managing Director of the Nigerian Ports Authority (NPA) for another tenure of five years. A statement by Buhari’s media aide, Mr. Femi Adesina, said the president also approved the reconstitution of the non-executive board of the NPA, with Mr. Emmanuel Adesoye (from South-west) as chairman. Other members of the board are Prince Ekenyem Nwafor-Orizu (South-east), Mr. Akinwunmi Ricketts (South-south), Mr. Ghazali Mijinyawa (North-east), Mr. Mustapha Dutse (North-west), and Mr. Abdulwahab Adesina (North-central).

There is no gainsaying that Bala-Usman’s re-appointment is a presidential endorsement of her reforms and a bold testament of her laudable achievements. When she was first appointed, many in the industry wondered if she had what it takes to run an institution like the NPA. But a few months into her appointment, she beat the odds in unique ways. She became a terror to the “untouchables” who took advantage of past weak management of NPA to rip Nigeria off with dubious contracts that were never executed.

Before Bala-Usman assumed office, Southeastern ports were as good as dead: drafts were shallow and monies approved for dredging ended up in the pockets of politicians. A few months into her appointment, Bala-Usman instituted a monthly stakeholders’ meeting in the region, visiting the ports on a monthly basis. Customs agents plying their trade on that axis described Onne port in Rivers State as the best in cargo handling in the country. Warri port, has been dredged and vessels are calling at the port, it is the same with Port Harcourt and Calabar ports. In Lagos, terminal operators described as untouchable and failed to invest in cargo handling equipment saw the handwriting on the wall and invested massively.

Landmark achievements of Bala-Usman include the cancellation of INTELS’ monopoly on oil and gas cargo, ensured that INTELS is fully compliant to Treasury Single Account (TSA) on Service Boat revenue collection, terminating the JV with Calabar Channel Management and Niger Global Limited for non-compliance to due process and requesting a refund of $15 million payment made to the company for lack of evidence of dredging claimed to have been done. Others are a confrontation with DAPMA over insisting that payment on harbour dues for vessels importing PMS are made in line with the guideline for rates of products sourced from the West African coast and those from outside the coast, a revenue of N13 billion was made in 2019 following the directive of full compliance, taking over management and board control of Agura Hotel through restoring of NPA’s majority shareholding.

There was the termination of BUA Terminal over non-adherence to development plan on reconstructing quays which were to have been done 90 days following the concession in 2006 but were not done nine years later in 2016 at which point the concession was cancelled, cancelation of the Secure Anchorage Area. An anchorage managed by private company-providing security at a cost to vessels calling at the Lagos ports.

Beating the Odds
Last year was one of the most challenging for humankind in living memory. It is a year everything that could go wrong went wrong as the COVID-19 pandemic shut down the world: businesses, governments, and large corporations reeled in pains revenue losses, and human lives. Despite the challenges, the NPA stood out among other government agencies. From the beginning of the year until the end, the agency on a monthly basis recorded outstanding performances that baffled industry stakeholders. Prominent among its achievements were the berthing of one of the biggest gearless Maerskline vessels at Federal Ocean Terminal (FOT), Onne in Rivers State, N1 trillion revenue, partnership with a private firm to deploy N7 billion electronic call-up system to end Apapa traffic and suspension of all applicable terminal storage fees on consignments, also known as demurrage, for an initial period of 21 days during the COVID-19 lockdown.

The achievements did not happen by accident. In her maiden press briefing on the assumption of office in July 2016, Bala-Usman promised that the new management would strive for enhanced operational efficiency for improved revenue generation and inflows into the national treasury. “We will listen to our customers, importers and exporters and other agencies working in the ports to improve on our service delivery to the nation. Anything less than the world class services is simply not acceptable. “Attaining such height is the mission to which can all subscribe to. As a team leader, I have come to add my best efforts to yours so that we can collectively achieve results for our industry,” she had said.

The new management, she revealed, would prioritise investments in primary equipment and infrastructure and services with a commitment to fulfilling NPA’s concession agreement to hasten clearance of imports and exports from the ports. Collectively, Bala-Usman had assured, the hard work of the agency’s staff could position NPA as a modern organisation, to function as a regulator. She added, “Everyone at the NPA has a role in promoting best practices in upholding good governance, standards and delivering quality services. We would jointly work hard with integrity and zero-tolerance for corruption. As the new management settles, we would be listening to your concerns and suggestions as we navigate the best options for discharging the NPA’s mandate

Gearless Vessel Berthing
The NPA in the first quarter of 2020 announced the successful berthing of one of the biggest gearless Maerskline vessels, calling at Federal Ocean Terminal (FOT), Onne in Rivers State, Nigeria. The Maerskline Stardelhorn vessel with a length of 300 metres, the width of 48 metres is the biggest ever container vessel to arrive at any Nigerian ports. It was received at the Onne. The vessel, which has a capacity of 9,971 (TEUs) is a flagship from Singapore. It was a testament to Bala-Usman’s determination to ensure that eastern ports remain attractive to shippers. The Port Manager, Alhasssan Ismaila Abubakar, “I give kudos to the NPA’s MD. She made this achievement possible. This is the first time such a gigantic container vessel is calling at any Nigerian ports.”

Demurrage Suspension
Following an appeal by stakeholders in the maritime industry and in line with global best practice, the NPA directed all terminal operators to suspend demurrage for an initial period of 21 days. The NPA noted that the gesture was in recognition of the pressure that the COVID-19 pandemic imposes on businesses and the responsibility imposed on the authority to relieve this burden on its customers. The NPA in a statement issued by its General Manager, Corporate and Strategic Communications, Adams Jatto, added that the measure was part of its bid to attain the objective of the federal government’s Ease of Doing Business Policy. This is just as the agency donated Agura Hotels, Abuja, as an isolation centre for COVID-19. “This is a social responsibility initiative aimed at supporting efforts of the federal government to contain the spread of the virus in Nigeria. The authority encourages all Nigerians to follow all advisories issued by the National Centre for Disease Control and be confident that Nigeria shall overcome,” it said.

Improved Revenue Generation
The NPA also improved its revenue generation despite COVID-19, towards the end of the third quarter of 20202, generating revenue of N1.02 trillion in the space of three years. An analysis of the results showed that in 2016, the NPA’s revenue went up to N182.42 billion against the N173.447 billion generated in 2015. The revenue surge continued in 2017 when the authority generated a total of N259.99 billion, marking about a 42 percent increase compared to 2016. In 2018, the revenue hit N282.42 billion while 2019’s peaked at around N300 billion, making it the highest in the organisation’s history, thus increasing its contribution to the Consolidated Revenue Fund Account since the Amazon took over in 2016. In 2014, the NPA contributed N18.5 billion to the CRF, compared to 2013 when it contributed N13.1 billion; it was N23.8 billion in 2016, compared to N18 billion in 2015. In 2017, NPA declared a total revenue of N299.56 billion.

The 2017 revenue, which exceeded the previous year’s by 84.65 percent, was the highest generated by the agency in five years. The figure was made up of revenues from traffic, harbours, administration, and other sources amounting to N136.04 billion, N66.80 billion, N86.06 billion, and N10.75 billion, respectively. In 2020, NPA announced revenue of N67.19 billion for the three months ended March 31, 2019, representing 24.8 percent of the N270.56 billion earned in 12 months ending December 31, 2018. The agency’s financial profile (unaudited) showing revenue and remittances to the CRF obtained by THISDAY revealed that the NPA raked in the amount via operating revenue while other revenue and investment income, which forms a bulk of its revenue have yet to be available for the period under review. Also, analysis of the agency’s six years’ revenue and remittances to CRF between 2013 and 2018 showed quantum leap in revenue and remittances despite the downturn in ship and cargo traffic as a result of certain federal government’s policies discouraging importation

Early Days
On assumption of office, Bala-Usman discovered that dredging of waterways to ensure smooth flow of shipping traffic through various water channels into Nigerian seaports became a drain pipe but lucrative business for a few corrupt officials in the agency and contractors. A case in point involved the dredging of three water channels for which the NPA spent $3 billion (N1.09 trillion) between 2006 and 2011, for questionable jobs allegedly done and invoiced. Following the revelation, courts in Switzerland convicted a Swiss company over a $20 million dredging bribery scam, which named three top former officials of the NPA as being involved in the deal. In addition, there was the payment of $13 million for the dredging of the Calabar channel, which some petitioners alleged was questionable.

The contract for the maintenance of the Calabar channel was eventually terminated by the NPA, following rifts over the questionable $13 million invoice and another $21 million invoice, which the Calabar Channels Management (CCM) had lodged for further payment. The scandal also involved a former senator, now a governor, from the South-East, who chaired one of the senate committees. In the Swiss court, the Swiss company was sentenced to a fine of one million Swiss Francs and asked to refund 36 million Swiss Francs being illegal profit after it was indicted for making illicit payments to a former NPA managing director; former acting MD and an ex-executive director as well as a former executive assistant to then-President Goodluck Jonathan’s special adviser on Technical Matters.

According to reports, former top officials of NPA, between 2006 and 2011 allegedly received $2.6 million in kickbacks. A status document on the contract presented by Bala-Usman showed that after failing to dredge the channel, Global Engineering was seeking payment of about $22 million as a balance for the contract. The contract about N26 billion. The NPA said the joint venture agreement with Global Engineering on the dredging of the Calabar channel was wrong, adding that the consultant clearly advised against the establishment of a channel management company for the Calabar Navigation Channel at that time. This was because the volume of ship traffic was low and did not justify a joint venture agreement, which is normally funded from ship dues. The documents further revealed that NPA had advertised the dredging for bidding, but the process was abandoned, while the contract worth over N26 billion was awarded to Niger Global Engineering Company through the joint venture agreement.

Early last year, the NPA notified the Nigerian Navy of its decision to dismantle the Secure Anchorage Area, operated on behalf of the navy by a private company, OMSL Limited, citing concerns of threat to national security and the cost of doing business at the country’s seaport. NPA insisted that the security of the country’s waterways was the statutory responsibility of the Nigerian Maritime Administration and Safety Agency (NIMASA), Marine Police, and the navy. A Secure Anchorage Area is an area outside the Lagos port that the navy, with a private company, defined as a secure place where vessels can anchor safely from the threat of pirate attack.

End of Monopoly
If there is any company that stakeholders believe was untouchable, it was INTELS Nigeria Limited. INTELS is a leading integrated logistics and facilities services provider in the maritime and oil and gas logistics sectors of the economy. All that changed when the reform-minded Bala- Usman came on board. The company did not go down without a fight. It took Bala-Usman considerable time to get INTELS to comply with TSA due to litigation. However, after about two years of bickering, the controversial boats pilotage monitoring and supervision agreement with INTELS Nigeria Limited expired last year June.

The NPA had in a letter dated March 29, 2019, addressed to the INTELS’ managing director, revoked the contract, citing Article 8 (C) of its agreement with INTELS, dated February 11, 2011. “We refer to the agreement dated 11th February, 2011 and 24th August, 2018 between the NPA and INTELS Nigeria Limited for the monitoring and supervision of oil industry-related activities in the compulsory pilotage districts of the authority (service boat operator). “The NPA (the principal) hereby serves on you INTELS Nigeria Limited, (the Managing agent) notice of termination in line with article 8 (C) of its agreement with INTELS, dated 11th February, 2011, which said notice shall expire three months from the date of this notice of termination,” the letter had stated.

In a letter dated March 27, 2019, addressed to Bala-Usman, NPA’s Executive Director, Finance and Administration, Mohammed Bello-Koko, had accused INTELS of non-compliance with the presidential directive and circular on implementation of Treasury Single Account (TSA) and Article 4.1 of the executed supplemental agreement by refusing to remit the sum of $145,849,309.33 being outstanding service boat revenue generated from November 1, 2017 to October 31, 2018.

Ending Apapa Gridlock

If there is any achievement that will go down in history for Bala-Usman, it will be finding solution to the intractable Apapa gridlock. All things being equal, the Apapa nightmare will soon be a thing of the past. After several months of meticulous planning, the NPA will next month deploy electronic call-up system aimed to put an end to the protracted Apapa traffic gridlock.

Sources at the NPA told THISDAY that when fully operational, the electronic call-up system will save Nigeria a whooping N140 billion weekly economic loss and another $10 billion annual loss of agro products.

“The system will save the country N140 billion weekly economic loss, 40 per cent of businesses that have left Apapa, will return, there will be an end to 7-14 days cargo reception delay; consequent damage to perishable export products and reverse the $10 billion annual loss of agro products.

“That is not all, this effort will also save our bridges around Lagos mainland, which are old and fragile and can no longer support abuse by trucks. This will also put an end to unavailability of public funding for shared common infrastructure.”

The Managing Director of Trucks Transit Parks Limited, The company providing the technology, Jama Onwubuariri told THISDAY that the effort will transform Apapa and make the port city thriving again.

According to him, “Our Company, Trucks Transit Parks Limietd (TTP) our technology provide solutions to the truck traffic challenges in Nigeria. TTP aims to decongest Apapa, improve traffic flow and ultimately facilitate the efficiency and productivity of the ports. TTP will do this through the use of technology.

“Our operation is based on an electronic call up system called Ètò , through which trucks movements will be scheduled from the originating points of the trucks to a park, then to a holding bay/pre-gate and then programmed in batches (on a first-come-first-served basis) to access the ports. Thus, all trucks are expected to remain within approved parks until they are scheduled to access the ports or are moving from one park to another. The idea is to prohibit illegal or indiscriminate parking of trucks along the roads.

“Therefore, law enforcement agents have been set up to enforce compliance and tow or fine offending trucks/truckers. Hence, an electronic call-up system that will drive the check in and checkout of trucks from each location has been put in place to achieve this. In addition to batching and scheduling of trucks movement, TTP would also offer add-on or ancillary services such as truck wash, tyre change, truck service, accommodation etc at designated parks.”

He added that the main objectives of the company’s operations is toimprove ports efficiency, decongesting traffic gridlock, improving traffic flow within Apapa logistics ring, improve accountability and eliminate extortion and improve ease of doing business.

On how it intends to achieve it, he said, “We will deploy electronic truck scheduling, park, truck and traffic management platform called Ètò, provide modern truck parks and holding bay facilities with hub amenities, use of ICT hardware such as access control, law enforcement/traffic agents to enforce complianceand registration of all ports bound trucks and drivers on Ètò.”

Stakeholders Endorse Reappointment
Meanwhile, stakeholders have welcomed Bala-Usman’s re-appointment and urged her to continue the reforms. While commending Buhari for throwing his weight behind her, they called on the NPA boss to build port infrastructure and make the ports more responsive and competitive. In an interview with THISDAY, the President of Ship Owners’ Forum, Mrs. Margaret Orakwusi, said, “She has set a huge standard in the industry and one other thing is that she is ready to learn as well as share her time. What is important is to groom and mentor the younger one and people that will take over from her when she lives. “Also, she should ensure in this new term, she opened the eastern portal end congestion in the seaport as well as the traffic gridlock, which has been another challenge in the last few years. She should ensure she achieves the call-up system because that is long overdue.

The jetties and quay apron needed to be rehabilitated because they are collapsing.” On his part, President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), the umbrella body of customs agents in Nigeria, Mr. Lucky Amiwero, applauding Bala-Usman’s re-appointment said, “She has done well and deserves commendation. But we have a lot of problems that are militating against the port industry. The African Continental Free Trade Agreement (AfCFTA) has commenced.

How are our ports going to fare? We want her to do more to make the port active and responsive because what we have now is too expensive. “For now, the NPA does not have a defined role because when you look at the three components of the port, regulations, port operations, and landlord, they are supposed to be technical operators. They should focus on building the port in her new tenure. We are losing our cargo. The port’s access roads are not in good shape. “She must focus on trying to build a new port system and focus on the technical aspect like dredging.

They (NPA) are providers of services so they should focus on providing the services to make the port better.” Also commenting on the re-appointment and latest developments in the industry, President of Importers Association of Lagos, Jonathan Nichol, noted, “She has served well and deserved a tenure extension. We congratulate and wish her a successful tenure. Her position carries enormous responsibility especially at this time that the Nigerian ports need a face-lift in terms of collapsed infrastructures; the reduction of port charges; reverting to the original status as terminal operators since the Port and Harbour Bill failed.”