Tuesday, May 28Nigeria's Authoritative Maritime News Magazine

Mad rush for deep seaports: Where are the cargoes?

In March 2006, the nation’s seaports were concessioned to private Terminal Operators after a bidding process that saw the Nigerian Ports Authority (NPA) letting go of its traditional cargo handling functions to become the port landlord. In the last 12 years, the privatisation programme in the ports sector has been credited with taking our yearly cargo throughput from 35 million TEUs to about 80 million, leading to unprecedented challenges at the Apapa and Tin Can Island ports. In the intervening years, there has been a gradual shift by governments and investors to invest in deep seaports in the country. This is to further broaden the shipping horizon so that bigger vessels can call at our ports with economies of scale.

By definition, a deep seaport is one that has the capability to accommodate a fully- laden Panamax ship such as the WAFMAX that was brought in by MAERSK Line some years ago. Since the last administration of Goodluck Jonathan, we saw a flurry of deep seaports being built such as the Lekki and Badagry in Lagos State, Ibom in Akwa Ibom State, Olokola in Ogun/Ondo State, Age in Bayelsa and now Gelegele in Edo State. I think Professor Ben Ayade is also planning one for Cross River State.

Deep seaport developments in the country are being carried out using the PPP equity policy of 60:20:20. This leaves the federal government with 20 per cent equity while the host state has 20 per cent. The private investor takes 60 percent because they are required to fund breakwater construction which ordinarily, some experts argue, should be the preserve of the federal government.

According to these experts, the construction of breakwater takes about 50 percent of the total cost of building a deep seaport and private investors/individuals are unlikely to find it attractive. This explains why most of the deep seaports in the country have not been able to take off the ground. They have become like white elephant projects that politicians use to hoodwink the people before elections. This explains why Akwa Ibom State is still shopping for investors in 2018, three full years after the Mfon Usoro committee was set up by Governor Udom Emmanuel!

Apart from the challenges of building and funding the development of deep seaports, there is the issue of cargoes. Where will the traffic come from for such deep seaports? For many of the States, economic activities are at a low ebb. For a states like Lagos and Ogun, the industries there can guarantee cargoes. We cannot say do for the others. For Akwa Ibom, the Ibom deep seaport holds a lot of promise if the promoters can get it right. Unfortunately, the Aluminum Smelter Plant at Ikot Abasi has fallen into bad times but we expect patronage from the high importers of Anambra and other Southeast states.

Since the port industry was deregulated in 2006, not much has been heard about green field development. Our ports have been stretched their limits and port access roads have become a nightmare especially in Lagos. The right policy framework will attract the right kind of investors as long as we are consistent and predictable.

The Ibom deep seaport is supposed to be an integral part of Ibom Industrial City (IIC) which will accommodate a fertilizer plant, tank farms, and a myriad of industries that will feed the port. It will have to be linked by rail, up North and South to reduce the problem associated with moving goods by road which is the bane of the current Port structure.

As Nigeria strives to become a maritime hub in the Gulf of Guinea, the regulatory authority like the NPA should ensure that these deep seaports do not become “political ports”; they must be effectively pursued and completed because of the centrality of transport to national development.