Blue Economy Proposes $1b For Ports Rehabilitation

The Nigerian Minister of Marine and Blue Economy, Gboyega Oyetola has disclosed that the ministry has proposed a $1 billion investment for the rehabilitation of ports across the country.

The Minister who was represented by the Permanent Secretary, Oloruntola Michael made this known when he appeared before the House of Representatives Committee on Privatisation.

according to him “the dream to achieve a modernised port is paramount and sacrosanct, adding that the concession agreement to be entered into with any Investor or Operator must align with this vision”.

Oyetola noted that government has not achieved the maximum benefits to be derived from the port concession due to inability to improve the port infrastructure to the desired standard for efficient operation, most of which have or are approaching the end of their life span.

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He added that during the course of rehabilitation of the ports, the ministry would ensure the ports are not completely shut down.

The Minister recalled that government embarked on Port reforms in 2005/2006 in order to enhance operational efficiency, improve productivity and revenue accrual to government, attract investment to the port sector and technology transfer, among others.

He noted that the reform resulted in the delineation of the six port complexes in Lagos, Port Harcourt, Calabar, Onne and Warri into 26 terminals and transfer of cargo operations, which was hitherto performed by the Nigerian Ports Authority (NPA) to the Terminal Operators that emerged through competitive bidding process.

The minister also explained that this culminated in the Lease Agreements signed between NPA (Lessor) and Private Terminal Operators (Lessee) with the Bureau of Public Enterprises as the Confirming party for a specified period ranging between 10-25 years.

He said ‘The Landlord Model’ was adopted where the lands for port development and related activities within areas declared as ports are owned and administered by NPA with responsibilities also assigned to the private operators”.

Oyetola noted that the five expired leases were initially granted a ten year concession at Apapa, Tincan Island and Delta Ports.

He said that extensions of five years were however granted to compensate the Terminal Operators in accordance with Section 25 of the Port Act due to budgetary constraints and the NPA’s inability to discharge some of its obligations as stipulated in the lease agreements.

He also pointed out that other challenges included; inability of NPA to meet the advertised depth for vessel reception, changes in government policies, encumbrances of lease property, insecurity on the waterways and collapsed access roads to the ports, among others.

 Oyetola stressed that the extension expired in 2021 and further extended for six month period twice.

The minister noted that the Terminal Operators have now approached NPA to renew the Concession Agreement, adding that this was forwarded to the ministry by NPA.