Encourage operators to deep-dredge existing seaports than building more, Ubogu tells FG
Managing director of Micura Services Limited, Chief Michael Ubogu has asked the federal government to consider encouraging current port concessionaires’ to embark on joint deep-dredging of existing six seaports as a way of converting them to deep seaports than the ongoing politics of new deep seaports which may or may not fly after all.
Micura group majors in stevedores and outsourcing operations. It recently marked its 10th anniversary in maritime business in Lagos.
Since last year, some states have embarked on a campaign of building new deep seaport in their states, whereas the capacities of existing ones can be upgraded for same purpose and a at a cheaper funding and efficiency.
For specifics, Lagos and Akwa Ibom had been in the crusade which the new leadership at Nigerian Ports Authority (NPA) has said it is still studying their viabilities in the face of prevailing poor utilization of existing ports.
Ubogu who viewed the craze for new deep seaports as white goose chase in an interview, said “If you look at the cost of establishing a deep seaport, it is very expensive”.
“But if you look at the cost of developing existing ones, I think it is cheaper. If I am in government, I would have advised the government to give some concession in terms of tax credit especially to people who through the Bureau of Public Enterprise (BPE) acquired some of the ports for 15 to 20 years; give them new terms and reduce the dollarization of payment to NPA. That way they will be able to invest more.
Continuing, he said “If government asks the concessionaires do the dredging themselves and give them tax credit, it will encourage them to do those dredging themselves because it is far cheaper to upgrade the ones we have now than to build new ones”.
“A lot of billions of dollars will be required to do that but it is cheaper and more realistic to upgrade the existing ones rather than build new ones. I am not a pessimist but if you look at some of these new ports they want to establish, some of them have signed contracts more than a year ago, while for some, the counterpart funding from the Public Private Partnership (PPP) arrangement have not even brought their own money and the government cannot fund it because the government does not have the money.
“If you want to develop a deep seaport, you will be looking at $20 billion dollars and that cannot be concluded even in five years but with the existing ports we have, it cannot take more than six month to dredge to create more draught and it is going to be a continuous thing.
Micura Services boss argued further that “What is lacking is because it is not continuous, if it is a continuous exercise, we won’t be having this kind of problem of shallow waters today”.
“The concession agreement do not include the dredging of the channels, it only includes the land areas so if the government can tell the terminal operators that a particular nautical mile is your responsibility to drill, and ensure that large vessels that have about 20 metres drafts can berth there, it won’t even get up to six months before they will do it because they will do the funding. “It is just for the government to say for every $1million dollars you spend, we are going to give you a tax credit at the end of the day. If the government was able to concession the port today to private owners, it can also concession the dredging of the channels.
“I know how long NPA gave out the contract to dredge the Calabar port but here we are after how many years”.
Harping more on the assessment of port concession 10 years on, Ubogu said “The best thing that has ever happened to the port environment today was the concession because you cannot compare how the port was now and in the days of NPA”.
According to him, “The kind of money that the terminal operators have invested in the port today in terms of facilities cannot be compared to the pre-concession era. A lot has improved in terms of infrastructures employment, and turnaround time of vessels. If you seek the opinion of people whether to transfer the terminals back to NPA, 99 per cent will say no”.
“With that it is very clear that government has no business being in business, theirs is to regulate and allow the private people who have the initiative and the experience to deal with the business. So the only way to encourage the terminal operators is to give them tax credit,” Micura Group noted.
