‘We Need Funds For Port Infrastructure’ – NPA Says 32-Year-Old Tariffs Can’t Support Modern Operations

NPA said it has obtained necessary approvals to effect a 15 percent upward review in its tariffs, which is the first in the last 32 years.

Our correspondent learnt that the last time NPA reviewed its tariffs was in 1993. However, the 15 percent review, which cuts across all NPA rates and dues, is premised on the urgent need to address the undesirable reality of aged and weak infrastructure, obsolete equipment and slow port capacity expansion, which has continued to diminish the performance and indeed competitiveness of Nigeria’s seaports.

Globally, port authorities depend on revenue from operations to stay alive to their responsibilities, which include construction and maintenance of port infrastructure, dredging of channels, provision of aids for safe navigation, provision of modern marine craft for efficient harbour services, automation and digitisation of port transactions, port security, energy efficiency and training and retraining of its employees.

Speaking at a stakeholders’ meeting in Lagos on Thursday, Managing Director of NPA, Abubakar Dantsoho, who was represented by Olalekan Badmus, Executive Director of Marine and Operation, said the decision to meet stakeholders was borne out of the desire to carry everyone along.

However, he said the upward review will not affect item rates like throughput and lease fees, rents on NPA landed properties, MOWCA levy, service boat operations and hourly towage and mooring charges.

He added port cost should not be taken for NPA charges as the port cost covers charges by other government agencies operating the port.

Also speaking at the meeting, Joshua Asanga, stakeholder, agreed with the increase, adding that the value of the tariff has since been suppressed by inflation, which is at about 35 per cent.

Asanga listed port management liabilities like wages, fuel and other areas of expenditure as having adjusted upwards without a commensurate rise in NPA charges for over 30 years.

He added that NPA needs funds for improved port infrastructure, robust ICT for the Port Community System, procurement of tug boats and other operational platforms to achieve efficiency.

Another stakeholder, Demian Ukagu, who spoke at the event, talked about applying more NPA funding to outer port facilities and jetties like the Kirikiri Lighter Terminal and the development of other critical port facilities across the country.

He added that NPA rates should be able to cover these costs, guarantee a minimum return on investment, and promote sustainable trade.

At the meeting, stakeholders agreed that existing tariffs were set devoid of capital cost, labour cost, consumables and overhead expenditures needed to run the ports.

They feared that keeping the ports on the old tariff would promote consequences like poor service, inadequate infrastructure, poor remuneration, obsolete critical port facilities, equipment and infrastructure.

However, Our correspondent learnt that the global index of Port rating and competitiveness, which the international trade community relies on for its choice of countries to do business with, derives its data from how well the aforementioned responsibilities are addressed.

Coming at this period of global economic upheaval and scramble for markets, this belated tariff review borne out of necessity constitutes a critical success factor in Nigeria’s quest to win back cargo handling business, and its accompanying benefits, including job opportunities it had lost to its maritime neighbours.

Contrary to the popular but erroneous notion that attributes high Port costs to NPA relative to its peers, verifiable data shows NPA Tariffs are amongst the lowest in the region.

The high incidence of un-receipted costs due to unduly high human interface, bureaucratic bottlenecks, and functional overlaps resulting from the absence of a Port Community System (PCS) and its corollary, the National Single Window (NSW), are responsible for this contrived falsehood.