Download ppt - 1 HEADQUARTERS: 26/28 MARINA, LAGOS, NIGERIA Website: . E-Mail: [email protected] AFRICAN PORTS PRIVATISATION

1HEADQUARTERS: 26/28 MARINA, LAGOS, NIGERIAWebsite: www.nigerianports.org. E-Mail: [email protected]

AFRICAN PORTS PRIVATISATION & CONCESSIONING OF PORT SERVICES

NIGERIAN - EXPERIENCE

BY

ABDUL SALAM MOHAMMEDMANAGING DIRECTOR

NIGERIAN PORTS AUTHORITY

PRESENTED AT

THE 7TH PAN AFRICAN PORTS COOPERATION CONFERENCE (PAPC)

HELD AT DJIBOUTI PALACE KEMPINSKI HOTEL, DJIBOUTI

15TH -18TH December, 2008

NIGERIAN

PORTS

AUTHORITY

http://www.nigerianports.org/


NIGERIAN

PORTS

AUTHORITY

OUTLINE OF PRESENTATION

History

Mandate

Functions

Facilities

Initial Challenges

Response to Challenges

Need for Reform

Renewed Initiatives

Reform Objectives



NIGERIAN

PORTS

AUTHORITY

OUTLINE OF PRESENTATION – Contd…

Reform Process

Pre-reform situation

New Roles

Handover Process

Reform Challenges

Financial Returns

Operational Returns

Projects –Amortized, BOT

Performance Indicators



NIGERIAN

PORTS

AUTHORITY

Port operations and development in Nigeria began in the middle of the 19th century.

Effort towards the provision of facilities for ocean going vessels started in the early 1900.

Plans for capital dredging activities aimed at opening up the Lagos Lagoon commenced in 1906 when orders were placed for dredgers to work at the bar and sanction was given for the construction of the first length of the East Mole.

Port Harcourt Port was opened in 1913 following the discovery of coal in Enugu

HISTORY OF PORT OPERATIONS IN NIGERIA



NIGERIAN

PORTS

AUTHORITY

The first mail-steamer ‘S/S AKOKO’ drawing 5.64 metres entered Lagos harbours in February, 1914

The construction of the first four deep water berths of 548.64 metres long at Apapa began in 1921

Four berths of 1,920 feet long were developed at Port Harcourt in 1927.

An additional 762 metres of berthage were constructed and about 41 hectares to accommodate transit sheds, warehouses and marshalling yards in Lagos in 1948.

HISTORY OF PORT OPERATIONS IN NIGERIA - Contd…



NIGERIAN

PORTS

AUTHORITY

Port operations and management remained under the control of different government departments during this era (pre-1954)

• Cargo handling at the terminals was the prerogative of Nigerian Railways

• While the Marine Department took charge of vessel movement in the channel up to the quays.

• Maintenance of the quay wall was the responsibility of

the Public Works Department.

Nigerian Ports Authority was established in 1954 by an Act of Parliament and commenced operations in April, 1955




NIGERIAN

PORTS

AUTHORITY

Nigerian Ports Authority acquired the ports of old Warri and Burutu in 1972 that were originally owned by United Africa Company (UAC) Maritime arm of Messrs John Holts Transport

Calabar Port which was owned and operated by Messrs Palm Line Agencies, Elder Dempster Agencies and United African Company (UAC) was also acquired in December, 1969




NIGERIAN

PORTS

AUTHORITY

Carry on the business of carrier by land or sea, stevedore, wharfinger, warehouseman or lighterage man.

Construct, develop ports, docks, harbours, piers, wharves, canals, water courses, embankment and jetties.

Invest and deal with the monies of the Authority.

Appoint, license and manage pilots of vessels.

Enter into Agreement with any person for the operation or the provision of any of the port facilities which may be operated or provided by the Authority.

MANDATE OF THE AUTHORITY



NIGERIAN

PORTS

AUTHORITY

FUNCTIONS OF THE AUTHORITY

Provide, maintain and operate ports facilities

Maintain, improve and regulate the use of the port

Ensure the efficient management of port operations

• Optimal allocation and use of resources

• diversification of sources of revenue

• guarantee adequate returns on its investments

Provide safe and navigable channel

Provide towage, pilotage services and appliances

for salvage of life and property/prevention of fire.



NIGERIAN

PORTS

AUTHORITY

Offer cargo handling and storage services

Ensure safety and security

Control pollution within port limits and their

approaches

Provide ancillary services i.e. ship repair, supply of

water to vessel etc

FUNCTIONS OF THE AUTHORITY – Contd…



NIGERIAN

PORTS

AUTHORITY

Lagos Port Complex

Tin Can Island Port Complex

Rivers Port, Port Harcourt

Onne Port Complex

Calabar Port

Delta Ports, Warri

PORT FACILITIES



NIGERIAN

PORTS

AUTHORITY

CHALLENGES

Rapid Economic Growth

Containerization

Changes in vessel sizes & architecture

Globalization

Finance



NIGERIAN

PORTS

AUTHORITY

Increase capacity

• Third wharf extension was completed 1977

• Tin Can Island Port also 1977

• New Warri Port was commissioned 1979

• New Calabar Port, 1979

• Onne in the late 70s to early 1980s

Provide efficient service

Minimal cost

RESPONSE TO CHALLENGES



NIGERIAN

PORTS

AUTHORITY

Technical Committee on Privatization and Commercialization Decree 25 of 1988

Its Observations

• Large organization • Unwieldy operation• Lack of commercial orientation

Its recommendations

• Incorporation for private sector orientation• Zonal structure for decentralized control• Establishment of subsidiary companies - Seaview Nig. Ltd and Continental Shipyard

Inconclusive implementation – Later revised

NEED FOR REFORM



NIGERIAN

PORTS

AUTHORITY

RENEWED REFORM INITIATIVE

2001, World Bank and Federal Government initiative

Diagnostic Study by Royal Haskonning/Dynamar/Challenge International Associate to:

Update existing sector knowledge

Identify key issues

Generate viable options for reform



NIGERIAN

PORTS

AUTHORITY

Recommendation of Royal Haskonning/Dynamar/Challenge International Associate

Landlord model

Three regional authorities

Slim corporate headquarters

Clear role for the FMOT, Corporate Hq, Regional Authorities

Separation of operational from regulatory responsibility

RENEWED REFORMS INITIATIVE – Contd…



NIGERIAN

PORTS

AUTHORITY

REFORM OBJECTIVES

To increase efficiency in port operation

To decrease cost of port services to stakeholders

To decrease cost to the government for the support of viable port sector

To attract private sector participation so as to free public resources for public services



NIGERIAN

PORTS

AUTHORITY

REFORMS PROCESS

Appointment of CPCS Transcom as adviser to Bureau of Public Enterprise with responsibilities to:

• Reform, Restructure and Concession

National Council on Privatization

Presidential Committee on Port Reform

• Guide the process

• Dialogue with stakeholders

• Ensure success



NIGERIAN

PORTS

AUTHORITY

Expression of Interest Dec 2003

110 Applications received

94 Pre qualified and issued bid documents

24 Concession transactions concluded, two (2) outstanding

First Hand-over – APM Terminals, 20th March, 2006

REFORMS PROCESS – Contd…



NIGERIAN

PORTS

AUTHORITY

Delineate the ports into terminals and concession them to large independent Terminal Operators for 10 – 25 years.

Operators selected through transparent internationally competitive tenders

S/NO Port No. of Concessions

1. Lagos Port 6 + 1 ICD

2. Tin Can Island & Lilypond 4 + 1 BOT

3. Port Harcourt Port 2

4. Calabar Port 3

5. Warri/Koko Ports 5

6. Onne Port 3

TOTAL 24+1 BOT

* Two outstanding Terminals yet to be concluded

REFORMS PROCESS – Contd…



NIGERIAN

PORTS

AUTHORITY

Ageing Port infrastructure

Port design favoured the handling of loose shed cargo as against containers

Inadequate investment in equipment. Only two (2) Ship-to-Shore cranes were bought since 1978 in Lagos Port

Cumbersome and bureaucratic Cargo clearance

Excessive political pressure affecting operations

Skewed distribution of traffic resulting to over-use of infrastructure in Western Ports and under use of some facility leading to premature obsolescence in Eastern Ports

PRE-REFORM SITUATION



NIGERIAN

PORTS

AUTHORITY

NEW ROLES OF PRIVATE AND PUBLIC SECTORS

Private Sector (Terminal Operators) • Cargo Operations• Port Labour• Investment in equipment• Investment in terminal maintenance• Insurance of concession assets

Public Sector (NPA) • Port Planning, Licensing and Control• Port Development• Technical Regulations• Marine Services• Channel Management



NIGERIAN

PORTS

AUTHORITY

Conduct joint surveys of fixed assets.

Get inventory of cargo being handed to operators along with terminals

Settle employment and accommodation issues

Termination of existing contracts and agreements

Freeing the terminals of all other moveable assets not to be handed to operators

Address insurance requirements

Sale/transfer of spare parts consumables and moveable assets

HANDOVER PROCESS



NIGERIAN

PORTS

AUTHORITY

• Downsizing port workers by 75% (about 9,000 redundancies)

• Dismantling casual docklabour system and Pay-off of 13,000 Dockworkers

• Financing severance packages (about US$400 million)

• Programme of re-orientation and attitudinal changes

REFORM CHALLENGES



NIGERIAN

PORTS

AUTHORITY

Preparing redundant workforce for absorption by the market place

Need for capacity building (training and retraining) particularly port employees and dockworkers

Shift from operator to regulator/landlord Regulating the private operator

REFORM CHALLENGES – Contd…



NIGERIAN

PORTS

AUTHORITY

FINANCIAL RETURNS

• Estimated investment - Over US$1.0 Billion • Estimated income over a concession duration of between 10- 25years:

- Commencement fees - US$44,200,000 - Equipment sales - US$53,145,100 - Lease fees - US$4,852,033,342 Sub Total = US$4,949,378,442 • Projected Throughput fees – US$1,586,490,196.91 Total Estimated Income = US$6,535,868,638.91



NIGERIAN

PORTS

AUTHORITY

• Reduced vessel waiting time

• Reduced cargo dwell time

• Increased cargo throughput

• Improved berth occupancy

• Improved security

OPERATIONAL RETURNS



NIGERIAN

PORTS

AUTHORITY

25 no. amortized projects are presently at various stages of completion.

Total value of the projects is US$496,106,014.87

Areas covered by the projects are:

• Road construction

• Berthing facilities

• Dredging of Channels

• Storage facilities

AMORTIZED PROJECTS



NIGERIAN

PORTS

AUTHORITY

Port and Terminal Multiservices Ltd (PTML) Terminal – a Greenfield Development of RORO Berths 11/12 on 25yrs BOT arrangement.

• 1st Phase: US$62,400,000.00 – Main Project

• 2nd Phase: US$25,000,000.00 – Additional work (Berth 12, dredging and land reclamation)

Total investments: US$87,400,000.00

MEL-SEAMENT Ltd – a berthing facility made of a trestle, 2no. Breasting and a mooring dolphins under construction, capable of receiving post-panamax vessel.

Project cost = US$45,771,508.00

BUILD OPERATE AND TRANSFER (BOT) PROJECTS



NIGERIAN

PORTS

AUTHORITY

YEARIMPORT (MT) EXPORT (MT)

THROUGHPUT (MT)

1999 15,751,331 6,481,605 22,232,936

2000 19,230,496 9,702,384 28,932,880

2001 24,668,791 11,271,901 35,940,692

2002 25,206,380 11,780,861 36,987,241

2003 27,839,293 11,926,652 39,765,945

2004 26,907,075 13,909,872 40,816,947

2005 29,254,761 15,697,312 44,952,073

2006 31,937,804 17,235,520 49,173,324

2007 33,722,488 20,918,560 54,641,048

2008 Jan-Sept

30,803,353 18,720,889 49,524,242

PERFORMANCE INDICATORS

CARGO THROUGHPUT - PRE AND POST CONCESSION



NIGERIAN

PORTS

AUTHORITY

YEARNO. OF VESSELS TOTAL GRT

1999 3,123 32,911,941

2000 3,333 44,432,370

2001 3,745 56,106,345

2002 3,500 53,267,921

2003 3,661 60,622,666

2004 3,606 61,384,221

2005 3,692 60,541,810

2006 3,689 63,267,047

2007 4,646 83,197,856

2008 (Jan-Sept) 3,399 67,095,080

PERFORMANCE INDICATORS - Contd…

VESSEL TRAFFIC - PRE AND POST CONCESSIONOCEAN-GOING ONLY– EXCLUDE CRUDE OIL TERMINALS



NIGERIAN

PORTS

AUTHORITY

PERFORMANCE INDICATORS - Contd… - CRUDE AND LNG

YEAR

CRUDE OIL LIQUEFIED NATURAL GAS

NO. OF TANKERS

GRT OF CRUDE

TANKERS

CRUDE LIFTED (MT)

NO. OF TANKERS

GRT OF LNG TANKERS

LNG LIFTED (MT)

1999 656 62,691,842 92,463,264 46 650,269 1,503,398

2000 757 80,627,950 102,930,079 130 2,887,141 5,953,567

2001 731 60,550,031 100,732,875 149 10,458,086 7,154,965

2002 634 64,302,640 86,284,036 133 9,745,230 8,084,749

2003 657 73,216,175 85,797,681 173 14,690,798 9,292,832

2004 924 100,564,659 117,055,427 220 17,569,209 11,529,827

2005 902 94,984,566 112,872,821 215 17,072,976 11,264,515

2006 840 70,093,870 106,403,640 243 20,628,015 13,284,612

2007 817 90,222,365 105,986,381 344 29,562,631 19,076,748

2008(JAN-SEPT)*

578 63,825,200 73,750,000 292 22,214,870 21,820,809


NIGERIAN

PORTS

AUTHORITY

PERFORMANCE INDICATORS - CONT… CONTAINER THROUGHPUT (TEU)

-

20,000

40,000

60,000

80,000

100,000

120,000

TEU

JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC

2006 2007 2008

YR JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

2006 61,869

45,844

59,693

41,928

50,412

36,605

63,073

67,732

44,868

70,030

51,999

62,162

656,215

2007 41,873

58,630

52,032

56,815

76,368

39,001

75,535

76,485

67,578

57,265

62,672

71,286

735,540

2008 80,628

67,025

84,600

97,633

74,072

74,261

73,791

89,599

101,500

743,109


NIGERIAN

PORTS

AUTHORITY

PERFORMANCE INDICATORS - Contd… VEHICLE THROUGHPUT

MONTH 2006 2007 2008

JAN 7,958 12,166 11,485

FEB 5,859 16,469 9,425

MAR 7,076 9,194 11,130

APR 8,321 14,205 13,826

MAY 11,898 15,950 10,442

JUN 6,413 15,859 13,059

JUL 9,100 6,347 17,135

AUG 13,851 13,084 13,623

SEPT 10,483 15,595 19,208

OCT 9,571 10,896

NOV 10,154 13,084

DEC 11,497 24,319

TOTAL 112,181 167,168 119,333


NIGERIAN

PORTS

AUTHORITY

YEAR WAITING TIMETURN AROUND

TIMEBERTH OCCUP.

(%)

1995 0.47 6.17 27.76

1996 0.46 6.34 36.68

1997 0.47 6.71 36.73

1998 0.39 7.31 41.39

1999 0.36 6.31 47.09

2000 0.34 7.01 44.76

2001 1.27 7.91 51.78

2002 3.99 11.34 56.58

2003 2.17 7.89 52.75

2004 1.44 6.44 50.93

2005 2.60 7.40 49.70

2006 2.00 6.10 46.93

2007 1.00 4.70 47.43

Jan-Sept ‘08 3.72 40.24

PERFORMANCE INDICATORS - Contd…WAITING, TURN AROUND AND BERTH OCCUPANCY


NIGERIAN

PORTS

AUTHORITY

PERFORMANCE INDICATORS - Contd… APMT - AVERAGE TIME AT THE ANCHORAGE

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

2006 18 18.9 24.2 6.4 2.4 1.3 0.6 0.1 0.9

2007 0.3 0.5 0.5 0.4 1 0.4 1.7 1.7 3 2.7 5.5 1.5

2008 1.1 0.6 2.0 1.0 1.3 4.2

0

5

10

15

20

25

30


AV

G.

WA

ITIN

G T

IME

(D

AY

S)

2006 2007 2008


NIGERIAN

PORTS

AUTHORITY

PERFORMANCE INDICATORS - Contd…APMT - BERTH PRODUCTIVITY (MOVES/HOUR)

0

2

4

6

8

10

12

14

16

18

20


MONTH

AVG

BER

TH M

OVE

S/H

OU

R

2006 2007 2008


2006 6.45 5.02 5.9 9.6 9.3 10.8 14.4 15.8 15.8

2007 16.3 14.5 13.8 14 12.6 14.9 14.4 14.2 14 11.3 10.6 15.9

2008 18.2 15.2 14.6 14.7 15.6 14.5 15.6 14.2 14.2


NIGERIAN

PORTS

AUTHORITY

PERFORMANCE INDICATORS - Contd… APMT - CONTAINER THROUGHPUT (TEU)

0

10000

20000

30000

40000

50000

60000


MONTHS

TEU

2006 2007 2008


2006 18,723 22,069 22,720 38,455 34,959 34,034 43,221 31,649 38,283

2007 37,052 37,011 32,925 28,041 39,930 27,086 41,520 42,195 39,721 36,745 38,105 45,719

2008 44,783 34,233

48,077

48,318

49,273

37,361 40,247

49,739 51,740


NIGERIAN

PORTS

AUTHORITY

PERFORMANCE INDICATORS – Contd... APMT - CONTAINER THROUGHPUT (TEU)

-

100,000

200,000

300,000

400,000

500,000

2006 2007 JAN-SEPT. 2008

TEUYEAR TEU

2006 284,113

2007 446,050

JAN-SEPT. 2008

403,771


NIGERIAN

PORTS

AUTHORITY

PERFORMANCE INDICATORS – Contd...

The emerging improvement shown by the performance indicators would lead to efficiency and ultimately lower cost to our customers and more revenue to the Nation.

President, Federal Republic of NigeriaUmaru Musa Yar’Adua GCFR


NIGERIAN

PORTS

AUTHORITY

SUMMARY

CAPITAL INFUSION

ENHANCED FACILITIES AND EQUIPMENT + TRAINING AND REORIENTATION

ENHANCED EFFICIENCY

PO

RT C

OM

MU

NIT

IES

OTH

ER

STA

KEH

OLD

ER

S

More revenueBetter service at least cost

Preferred ports Generates more investment

Promotes Trade


NIGERIAN

PORTS

AUTHORITY

THANK YOU