© 2019 - International Centre for Investigative Reporting
Rots, secrecy cloud concession of $100.78m Warri port terminal
FROM the entrance, the Delta Ports, mostly known as Warri Port of the Nigerian Ports Authority (NPA) appears functional. It has a developed land area of 216.19 hectares with a container handling capacity of 333, 000 teu.
At the gate are security operatives who appear to be alert, a white security Hilux van is also strategically positioned at the centre of the gates to project security prowess of the security officers, but people walk into the port without checks.
Infrastructure decay at Warri Port
Entering the seaport, The ICIR discovers it is almost derelict. Old abandoned structures dot the seaport. Starting from the decaying 4-storey building used as an administrative office, located adjacent the traffic department, to the marketing department and by extension, terminal A of the old port, they are all representation of neglects except the Julius Berger (JB) terminal which is fully operational.
The condition of the port contradicts the claim of the Bureau of Public Enterprise (BPE), a government agency responsible for implementing the Nigerian policy on privatisation and commercialisation. BPE has claimed that it has provided key infrastructure to ensure successful transfer of Terminal ‘B’ of the old port. But this is far from the truth. The port, in fact, is a representation of the popular saying that – not all that glitters is gold.
Paintings of the administrative office are faded, with rusty railings across the stairway.
Just by the newly commercialised Terminal B is a derelict warehouse covered with bush. A rickety old truck was parked nearby. The roof of the warehouse is partially blown-off at the time of the visit. A distant away is what looks like an abandoned tank-farm. Sources within the port told this reporter that JB has commenced plans to acquire the old facility. The Terminal ‘B’, which is supposed to have been renovated, as claimed by BPE, is bereft of infrastructure, except for the berth and piece of land.
BPE claimed to have dredged the channel, but port workers said the government officials only cleared the sea plants that clogged the waterway.
Though, it is the responsibility of the government to provide every infrastructural facility, more like a landlord-tenant business model established in 2005/2006 before the process of port concession takes place and final handling over, that is not entirely the case.
Power, hangers should have been provided senior official of the Sifax group – major shareholder of Ocean and Cargo Terminal Services Limited said anonymously. “The key apron and dredging have only been done. There are no other facilities.”
“There ought to be other equipment like hangers, Rubber Tyred Gantry (RTGs) cranes, equipment and other heavy-duty equipment…because it’s a normal landlord-tenant arrangement – your landlord provides power.”
Surprisingly, findings revealed that the situation has been the same for years, prior to the new landlord operation model. The reporter only saw debris on site. In fact, it was learnt that the old berth caved in, due to neglect, after some Chinese operators allegedly used the terminal.
“This is the Terminal ‘B’ Old Warri Port you have been hearing on the radio,” says a security officer assigned to guard the old terminal, with a clear expression of displeasure. After several arguments, he insisted on the same location which was clearly a bare ground. It was not only confusing to the reporter but a commercial motorcyclist who earlier argued the terminal never existed.
But the terminal is located almost opposite JB terminal (Cana berth) just by the Old Terminal ‘A’, operated by Intels Nigeria Limited.
“I have nothing else to tell you. This is the place. All I know is it was operated by the Chinese before they left.”
Adjacent the open space is an entrance to the Terminal ‘A’ port, with a rusty signboard, also appeared inactive.
Secrecy clouds concession of $100.78m Terminal ‘B’ Old Warri port
The ICIR, therefore, requested through a Freedom of Information (FOI), the list of all bidders and all bids submitted by each bidder for the concession. Also requested were the Warri port concession agreement and announcement, the invitation sent to bidders and guidelines for the selection.
The request was not granted initially.
Later, a part of the information was made available after a Federal High Court motion was filed and sent to the BPE for denying the FOI requests. But, the list of bidders and bids submitted by the qualified bidders was excluded in the document made available to The ICIR.
It was gathered that Ecomarine Consortium, despite its score of 87.84 per cent, was disqualified for wrong bid submission while Sifax Group’s Ocean and Cargo Terminal Services Limited with 82.70 percent was considered the preferred bidder.
While the preferred bidder offered $25,510,000.64 as announced by the BPE, Ecomarine’s bid price was not made public.
“Ecomarine had scored 87.84 per cent and Ocean and Cargo Terminal Services Limited, 82.70 per cent in the evaluation of the technical proposals of the prospective bidders,” Amina Tukur, BPE’s Head of Public Communications stated in a statement.
“Consequently, Ecomarine’s bid price was not announced. However, Ocean and Cargo Terminal Services Limited emergence is subject to the approval of the National Council on Privatisation (NCP).”
This inconsistency raised questions on the transparency of the bidding process, especially as the BPE provided relevant information about the concession, except for bids submitted by respective bidders and a list of all bidders.
The ICIR, as a result of the deliberate frustrations, did a report on the illegality of the agencies involved – BPE, Nigerian Ports Authority (NPA) and the Infrastructure Concession Regulatory Commission (ICRC).
ICRC had earlier denied receipt of the latest concession as it could not say categorically if the process was transparent or otherwise. Usually, it has a database of all concessions in the country.
On 18th December, this reporter went through the Public-Private Partnership (PPP) disclosure portal on the official website of the ICRC but the document on the new concession is still missing.
Meanwhile, the controversial $100.78 terminal b Warri port concession would last for 25 years.
Stakeholders react to persistent concession of government facilities
Aside from rots in the maritime sector, stakeholders in the private sector and government authorities have reacted to the development. While some claimed it is good for the economy, maritime workers and civil society organisations are of a contrary opinion.
“This is not the first concession and this will not be the last. We are looking forward if this terminal b will be better if the government is only interested in collecting money and not enforcing the laws because I know there must be an agreement,” Sir Chidi Njoku, Leader NPA Daily Berthing Committee, Delta Port queried.
“These are the questions we ask ourselves. The previous concession in Delta port, how has it fared as par agreement reached with the government….we have not seen any dividend from the previous concession.”
For almost six months, specifically from February, the Old Warri Port Terminal ‘B’ concession agreement was kept secret by government authorities until 3rd July. Yet, as at date, other requested information such as the list of bidders and copies of their bids were never made available.
Among those documents provided, The ICIR found that one of the three-part concession agreement was prepared by the NPA, through its Legal Division with registration number 024/2019. The NPA, in the document served as the ‘guarantor’, BPE as the ‘confirming party’ while Ocean and Cargo Terminal Services Limited was referred to as the ‘concessionaire’.
The second agreement titled ‘Information Memorandum’ was also prepared for the BPE by the same NPA while the ‘Request for Proposal’ document was prepared by the National Council on Privatisation through the BPE.
Dr Otive Igbuzor, Ex-Country Director of ActionAid Nigeria, prior to his new appointment also frowned at privatisations of any kind with notions that the business model does not benefit government, the public but only private companies.
Rev. Nnimmo Bassey, the Executive Director, Health of Mother Earth Foundation (HOMEF), shared the same argument. He described the business model as inappropriate arguing that concession makes government care less about the people. The public suffers and mostly to enrich private hands.
“Government can be efficient. The government can provide services; they don’t have to run away from doing what government should do,” says Bassey. “…we need a government that plans into the future, we need long term plans so that we have a direction for real development.”
Meanwhile, Members of the Daily Berthing Committee, Warri were seated at the port when The ICIR visited. It appeared they just concluded a meeting. Mr S. E Ewuji, an executive member of the berthing committee categorically showed his displeasure on the concession.
“The previous concessions at the Warri port were ineffective.”
To him, there ought to be huge competition among the concessionaires, thus leading to reductions in the cost of shipping, upgrade of port facilities and ensuring transparency in tariff administration but that has not been the case.
This was the essence of concession as affirmed by the BPE Director-General, Alex Okoh. “The objective of the government in the port concession is to increase efficiency in our ports, improve service delivery, upgrade and modernise facilities in the ports, reduce the cost of shipping and clearing of goods at the ports and relieve the government of the burden of financing the sector.”
Findings, however, showed that as of June 2018, the federal government has privatised or concessioned 142 public enterprises, with some either terminated or crippled with legal battles.
SIFAX – we care less about the rots
In his reaction, Muyiwa Akande, Sifax Group Corporate Manager, told The ICIR they were aware of the shortcomings including the infrastructure deficit, but the company appeared determined to clinch the deal despite the obvious.
“We didn’t just have the first contact when we took over. There was a pre-concession visit so we understand perfectly what the situation of things was,” says Akande. “We know what we are going to do and our agenda is to resuscitate activities there, put in the infrastructure and track shipping lines to the port. We know the true state of things before we bid.”
He denied claims that the Sifax group was favoured to emerge the preferred bidder despite the ICRC failure to make the process open. “We did what we needed to do to win fairly…like I said all the processes were done completely including all the regulatory agencies.”
Landlord Model: 14 years of weak regulations of port concessionaires
Since the NPA adopted the new operational model in 2005/2006, The ICIR found out that weak regulatory functions have remained a major setback. Maritime workers alleged concessionaire rip-off the government, and enjoy so much liberty. Thus, the regulatory function has been mostly ineffective.
“Because of the inability of the regulator, either the NPA or BPE, the concessionaires have not made their tariffs affordable to port users and that’s why those berths are lying fallow, not giving room for competition,” says Mr S. E Ewuji.
Ironically, the maritime workers were not entirely against port concession but government’s ability to manage the concessionaire, check their excesses, failings and ensure they deliver on their promises.
The NPA, custodian of all ports nationwide denied its regulatory function. The authority could not give clear feedback on agency of government that regulates the private entities.
“We are neither here nor there. But the role we play is a landlord model and the regulatory aspect of it is one thing that is still…….I mean we still don’t have a body in place to regulate,” says Engr Adams Jatto, NPA General Manager in charge of Corporate Communications.
“That’s why we are expecting the national transportation commission. We are hoping it will be their responsibility but unfortunately, the bill has not been passed. But we only collect our dues…..”
But this claim is not only false, it negates primary mandates of the authority. The NPA is particularly responsible for, “enacting port regulations and bye-laws as well as monitor and enforce them, and to ensure, day to day monitoring of operations and enforcement of relevant sections of respective agreements.”
Asked to comment on situations where concessionaires flout the deals, “you look at where they have flouted the agreement, if it has to do with the NPA, there are sanctions. If it is the shipper’s council or customs, there would be sanctions.”
But for the Warri port concession, “There are different modes of concession,” says Jatto but refused to divulge the exact one entered into with the Sifax group. “I can’t tell you that out-rightly.”
Meanwhile, Part III, Section 20(A), (B) of the ICRC Act, (2005), showed that the ICRC also has the mandate to ensure compliance with concession agreements but denied being in custody of the concession agreement.
At the NPA Headquarters, Lagos, where The ICIR met Jatto, he attributed the entire process to the BPE. He excluded the NPA, saying the NPA has no jurisdiction.
“The concession was not done by the NPA but BPE. We are just part of the concession process but the major organisation is BPE. The driver of the process is the BPE, so it is not something we initiate,” says Jatto when he was reminded of the role NPA played in the concession process.
On claims that the FG has completed the rehabilitation of the terminal ‘B’ where The ICIR met nothing physical on ground, Jatto said the land is the terminal and as such there was nothing left for the government to do.
“Of course, that is the essence of concession. If the land is not there, what will the concessionaire do? the land alone is an asset. They should put it in place for ships to berth. They (the concessionaire) will also put up a structure as it will soothe their operation. They may not necessarily need a warehouse but to strengthen the key, i.e the land (berth) adjoining the sea (channel)…”
Experts blame NPA on poor regulation
Elder George Njoku, Secretary to the Chartered Institute of Transport and Logistics (CITL) is an expert with over 30 years of experience in the sector. He said the responsibility still lies with NPA to regulate the concessionaires, but he BPE is at liberty to determine the preferred bidder. He also questioned the timing at which the company was registered.
“Aside from experience, it is not entirely right for new a company to be registered solely for the benefit of a concession,” says Njoku.
Like other maritime workers, he expressed worry on poor regulations, emphasising the need for serious government actions.
“In most cases, even though they have the qualified manpower, those who say business doesn’t do well in government are the very people who come out, as a private individual to run some businesses and they do well.”
“Concession is not that government has nothing to do, the government is there to put regulations, monitor in such a way that concessionaire abides by the rules and regulation….”
Mr Obioma Ochulor, General Secretary, Shipping Trade Group (STG), Warri Port, however, saw nothing wrong about concession but urged the government to live up to its responsibilities by effectively regulating the private operators.
However, it appears the cloud of doubt on the concession would linger for as long as the federal government remains complacent with its regulatory duties and skewed procurement processes.
It is notable that to date, the terminal B Warri port concession is still missing from the ICRC database.