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Ports Concessioning, The Best Thing That Has Happened To Nigeria- Mberekpe

OPUTA FRANCISMany have described the Nigerian Maritime Industry as the second most viable source of revenue generation that is next to oil sector. In this interview with our Maritime Correspondent, Blaise Elumezie, Mr. Francis Oputa Mberekpe, the author of Freight Forwarders’ Hand Book, a stakeholder in the Maritime Industry, and a member of The Chartered Institute of Logistics and Transport bares his mind on some nagging issues as it relates to the business of maritime in Nigeria, the failure of railway system in Nigeria, issues on PAR and RAAR, the impact of Cabotage Law and the advantages of concessionaires in Nigerian Ports, amongst others.

Here are the excerpts:

Let me meet you sir?

My name is Francis Oputa Mberekpe, I hail from Oguta LGA of Imo state. I am a Christian, a professional in the transport management. I have been in the industry since 1982 after my youth service, I have worked in many companies, mainly in the freight forwarding companies where I have applied my knowledge in transport management. Now I have retired, I am working for myself in my own company; Ikezi Global Shipping Services Ltd., this is where I am now before I launched my book on Freight Forwarding which The Chartered Institute on Logistics and Transport launched  in November 9, 2012.

As an expert in Freight forwarding how would you compare freight Forwarding Business now and then?

Thank you very much, the freight forwarding business is a dynamic one, it has been changing and changing based on the fact that Nigerian government wants to apply best global practices. The business has resolved and developed into ASSCUDA system of clearing in the Ports. It was introduced by Chief Olusegun Obasango’s administration. That ASSCUDA system has been in place and of course the industry is a dynamic one and it has been changing from time to time.

As a freight forwarder, what would you attribute As reason for the failure of railway system in Nigeria?

The Nigeria railway system that supposed to carry all heavy tonnages traffic both in passengers and freight but unfortunately, the railway system was not developed to carry this tonnages. So, that was the reason why the cargoes that Nigeria has been generating is being carried through road transportation by heavy vehicles, causing damages on Nigerian roads. In fact, it is one of the main reasons why we are experiencing damages on Nigerian roads.

Do you think the railway system would have been better off if Nigerian government had resorted in bringing in fairly used locomotives to take over the outdated ones?

Thank you very much; the railway system in Nigeria is an awkward one. What we call the gauge, that is the right and the left rails of Nigerian Railway system is 2.8 inches, but the international one is 3.6 inches, meaning that the railway system that is used abroad cannot be transferred to Nigeria because our railway gauge can not carry them. So, if the international is 3 feet 6inches and ours is 2 feet 8 inches, there is no way we can transfer their used or new engines to our system.

Now you are the author and publisher of freight forwarders’ handbook that was recently launched in the Nigerian market, what impact do you think this book will make in the freight forwarding business?

Thank you very much, this Freight Forwarder’s Hand Book took me many years to write and it was as a result of researches carried out by me, including my experience in the industry that gave me the impetus to write the book. Now that the book is out and is being sold, it is for the readership of professionals in the industry, for example, people who are shippers or exporters can read this book and they will know their left from right. They will be able to engage their freight forwarders and carry out their import and export businesses.

As a stakeholder in the maritime business would you say that the cabotage law has in any way impacted positively in the maritime industry?

It has not impacted positively yet, the Nigerian Maritime Administration and Safety Agency (NIMASA), which is the driver of this Cabotage Law, the law was enacted by the Federal Government and to be driven by NIMASA, who is the Federal Government agency that was supposed to carry out the task of collecting cabotage fees which is part of the directive from Federal Government that NIMASA is to collect the fund from foreign agencies who may want to participate in the cabotage business. That Cabotage Law is a system in which the local inland water ways is to be covered by indigenous companies, that they alone can carry freights and passengers in the inland water ways. But because of the fact that we don’t have the tonnages, or vessels to carry it, the foreign companies are now in the business. In fact, they have taken over, because they have the tonnages and vessels to do the business. For the fact that fund which was to be made available to NIMASA by the Federal Government to acquire the tonnages and vessels to effectively manage their responsibility, has not been met. I would say that the Cabotage Law has not impacted positively in the industry for now.

What is your view on the fact that foreigners operating in the inland waterways undermine the cabotage law and increase their freight tariff within one month of their operation in the business, as against 3 months stipulated by the law?

I don’t agree with them. They must work in accordance with the confines of the law.

What is your view on the issue of RAR and PAAR?

The international body driving this ASSCUDA system is United Nations Conference for Trade and Development UNCTAD. The ASSCUDA system is developing in the global view, this PAR or RAAR was developed so that private companies will be performing this Risk Assessment or we call them Risk Assessors. But now we have gone to the next level. The RAAR is to be performed by the Nigeria Customs, who are the Federal Government agency collecting this taxes on exported goods. RAAR was introduced so that the Nigeria Customs will take full charge of Risk Assessment, so that the individual companies will step aside.

Do You Support The Idea Of Leaving Nigerian Ports In The Hands Of Concessionaires?

Thank you; that is a good question. The concessionaires are private companies and like they say, government does not have business doing business. It is a global practice and Nigeria wants to be a stimuli, every best practice that is done globally, Nigeria wants to be a part of it.

The concessionaires are private companies, because the UNCTAD like I told you is the driver of international trade, because of that, these concessionaires or private companies are the best in position to run ports. Nigerian Ports have been run by Nigerian Ports Authority, but we ended up failing, because Nigerian government was not getting enough revenue as the Nigerian Ports Authority was operating the ports.

So that gave the impetus to government to bring in concessionaires to run part of the ports, which is the cargo side of the operations, so that they will be paying-in revenue into the government purse. While they are operating the ports in an efficient manner, because like I said, government does not have any business doing business. Government is to provide the enabling environment for the private companies to carry out their business. So, that is the reason why government brought in the concessionaries to run the business, even though the concessionaires are going to be there for a period of 15 years for instance, the contract can be renewed after that 15 years, if government is satisfied with their level of performance. But no matter how you look at it, concessionaires have done well, because  there has been an increase in revenue for government, some of the dilapidated infrastructure at the ports have been resuscitated by these private companies, whom most of them are indigenous and private investors. So the concessionaires have used their money to develop our ports. It is a welcome development and we in the industry support it. We support that private companies continue to run our ports or run this aspect of our ports, which is the cargo aspect.

Some Persons Are of The View That Leaving Ports In The Hands Of Concessionaires Will Not Provide The Enabling Environment to Checkmate Activities at The Ports, What Is Your Take On That Sir?

Well, there is an advantage and disadvantage in everything; the advantages in allowing concessionaires; to run the ports far out- weigh the disadvantages.

But the disadvantage of private companies is on security, but that security part of the ports will be managed by Nigeria government, which is already being handled by the Nigeria Customs because the Nigeria Ports Authority is the owner of the ports. They are in-charge of the channels, they are in charge of harbor operations while the concessionaires are only in-charge of the cargo operations. NPA is in charge of the channels and the harbors.

So the entry of vessels into ports is controlled by NPA, while the cargo aspect is controlled by the concessionaires.

The security of the nation is in the hands of the Customs, because they are the one to open the container or vessels, they do the checks on vessels. They can still control the security at the ports. But the interesting part of it is that the concessionaires have done well. In our ports now, we are witnessing efficiency in the ports, turnaround time of vessels, dwelling time of vessels, clearing time of vessel, the arriving time of the vessel, and the time the vessel is taking off from the port. So there has been a tremendous improvement of operations at the ports.

Do You See The Exit of Some Security Agents at The Ports As One That Will Bring Efficiency In The Port Operations?

Thank you very much; the problem in Nigerian Ports or port operations is that there are duplicating efforts occasioned by drafting of federal agencies into the port operations. At the last count we have more than 15 agencies working at the ports. It does not augur well for quick clearance of cargo at the port or onward delivery abroad. But the thing is that these agencies form a clog in the wheel. Import is what we are talking about, our economy is import-oriented. These agencies are merely duplicating efforts. We Freight Forwarders have been crying, calling on government to streamline efforts on this particular aspect of operations.

When a particular cargo arrives now, you will see the Quarantine, you will see Standard Organization of Nigeria SON, you will see NAFDAC. These three organizations fight over cargo on who will be the final agency to release it. This is why we are saying that government is supposed to remove some of these agencies from ports. What we are saying is, let the government go back to the laws that brought them into the ports and repeal it.

That is the job of National Assembly, because there are some laws that brought them in. Any time they are asked to go, they will come back to say that the law has not been repealed. So, the Federal Government should go back to the National Assembly where the laws are made and amend it.

What is Your View on Different Freight Charges, Say from Lagos to Port Harcourt Ports?

Thank you very much, that is another good question. Freight is a distant oriented phenomenon, because the distance from Lagos to Port Harcourt is enormous. I can not tell you the mileage for now, but I know that any vehicle that leaves Lagos for Port Harcourt must have burnt some diesel and that burnt diesel must be added on freight charges. 

You Have a Different Opinion On This, While Some Stakeholders See It As a Ploy to Disenfranchise The Importers From The South-East and South-South Zones of This Country?

No, I don’t agree with that objectively, because I am an operational man. May be you are looking at it from the political point of view, but I am looking at it from the operational point of view. Even if it is 10 dollars from Lagos to Port Harcourt for instance, is something. I don’t see it as a means of disenfranchising any body. ###

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