Bello-Koko: Focus on Port Efficiency Has Increased Revenue, Remittance to FG

Interview

Taking charge of affairs as the substantive Managing Director of the Nigeria Ports Authority, over a year ago, Mohammed Bello-Koko, had his sight on increasing the revenue base of the authority by over 30 per cent next year. Sharing more about his leadership in this interview with THISDAY, he spoke of efforts currently being made by the NPA to shore up Nigeria’s Agric exports as a way of helping to diversify the nation’s economy away from hydrocarbon resources. He also spoke about how he has been able to implement his plans to increase contributions into the Consolidated Revenue Fund and, of course, the Lekki Deep Sea Port’s ability to wrest cargoes from Nigeria’s closest neighbours as the country awaits her first commercial vessel to berth at the nation’s deepest sea port on April 1, 2023. Excerpts:

When you marked 100 days in office, following the confirmation of your appointment, you unveiled your plans and roadmap to Nigerians then. How far have you gone with the implementation of those plans?

What I did then was to give you our plans, both short term, middle and long term and to a large extent, I can say we have achieved this. The first thing we needed to do then was to improve port efficiency and for us, if we improve port efficiency, it means we would become more competitive and to do that, we either introduce automation or ensure that the necessary marine equipment and other tools necessary for offering and providing services are provided and we have done that.

I also said that we would ensure that we increase our revenue. We have increased our revenue from probably about N317 billion to over N360 billion in 2022. We transferred about N80 billion to the Consolidated Revenue Fund (CRF) in 2020 and over N91 billion in 2022. We have also improved on staff welfare whether it is in terms of their offices, their salaries and allowances, provision of buses, working tools, uniforms where necessary and for the physical port infrastructure, that is a bit of a long term project, but we have gone very far.

We are looking for funding and necessary government approvals to ensure that we start rehabilitating all the ports, which include Tincan Island, Apapa and the broken down and collapsed Escravos Break Water. There are also jetties and berths at Port Harcourt Port, Onne and Warri and Calabar, so these are the plans we put it place, so for each of them, we have done quite well.

Within this same period, the Lekki Deep Seaport was inaugurated by President Buhari. It was said then that the port would be the game changer. What’s the situation report and have the ships started coming to berth and as well transport their cargoes?

Well,  as you know, the Lekki Deep Seaport is the first deep seaport in Nigeria with a draft of about 16.5 metres. It has been commissioned by the President and that that was a very, very good thing for us and you know for the government itself. This is the first government that I can say started construction of a port, finished and commissioned it before it left office.

The Lekki Deep Seaport has been in the brain box for over 10 years, it was this administration that came in and gave all the necessary support through the Ministry of Transportation and the Nigeria Ports Authority (NPA).

They have done the test run on all the necessary equipment, they have done their recruitments, people have been training and the vessels have started coming in, at least, we had a vessel that came in to take out empty containers and by April, we expect that the first commercial vessel will start coming.

So business has started actually in Lekki Deep Sea Port. So, everything is ready and it is going to be automated as we said and all the gaps we observed either in Tincan Island Port or Apapa, whether in terms of scanners, equipment and others, you will find all of them in Lekki.

How much of a game changer really is the Lekki Deep Sea port?

It changes everything. For instance, you are an importer, and you know that going to Apapa, sending in your cargo or importing your cargo through Apapa will take you two weeks, whether because the road is bad, whether because the Customs scanning system is limited, or probably the automation is not complete and so on and so forth, it will take you two weeks. Buy if you take it through Lekki, probably in two days you are out.

So, everybody is going to look at what will reduce cost, whether you as an importer or even as a shipping company. Now, also it serves as a role model for feature tech development, we already have Badagry that has been approved and then we are providing technical guidance and assistance to ports that are coming like Benin and Ondo and other ports. And even the Badagry itself. So it looks like now Lekki will be the major port that everybody will like to coming. So it changes everything.

The Second thing is that we are already working on that for trans-shipment of cargo. That is something that the neighbouring countries have, neighbouring countries have, cargo transshipment. So you find that the bigger vessels go to Lome and then they use smaller vessels to bring the cargo into Nigeria. But that is what Lekki wants to start doing and they already have a market for it, it is just to have the necessary corporation by relevant government agencies, so that, that happens.

So you find that, that brings in more revenue to Nigerian Port Authority, more activity into Nigeria also. So it changes that perspective. We are no more going to have situations where cargo cannot come into Nigeria because of lack of port infrastructure. And the interconnectivity from Lekki to other locations, you know what is going on, there is a survey for a train to be linked there. So it changes everything. It also creates competition; it means that the existing terminal operators need to sit up so as not to lose business to Lekki.

The real concerns are on the impact of this on infrastructure. The last time, you said trucks wouldn’t need to come through to this axis to load, but would have to go through outside the town. Are there plans to upgrade those infrastructure so that people do not suffer the same experience as it is in Apapa?

The problem first of all with the Tin Can and Apapa ports is the total land size, the landmass, those ports are not going to increase in sizes and they are currently operating far beyond the installed capacity. So, that already is a problem on its own. The stocking area in these two ports is not large enough to contain the cargo that is coming in and ensure smooth and quick sharing of the cargo.

Now, the road to Tincan Island Port, the one right in front of the port is currently being worked on and expanded by Dangote and Hitech and what the Lagos State government has done is, from the junction to Epe down to the boundary with the neighboring states, they are working on it and then the other State will also continue that construction which we all know is taking place.

What this means is that we are going to have good roads moving cargo from Lekki all the way to outside Lagos and for the trucks coming into Lagos, probably factories within Lagos. We can see that the road is being worked on, but what Lekki deep sea ports has done also was to enter into agreements with barge operators. So, they are working on using barges to also move cargo from Lekki Deep Sea Port to off dock locations within Lagos and what it simply means is that they are also going to have less traffic, less trucks, fewer trucks on the road.

Another thing is that we are already working to deploy electronic truck call-up system, which is what we introduced in Tin Can and Apapa that has brought a bit of sanity. So, abinitio, there was a plan also for truck parks, the port itself is providing a lot of parking space for trucks so it is more like a holding bay within the port itself unlike Tin Can and Apapa where the original locations for parking of trucks have been given to concessionaires who have turned some part of it to warehouses, operational areas and stocking area.

So, there is a plan already and they know the problems. We know the problems in TinCan and Apapa and we are doing everything we can to ensure that it does not repeat itself and finally, there are few tank farms close to the port itself. Now, of course, you can say with Dangote refinery what is going to happen, but Dangote is going to be transporting most of liquid products via pipelines. In Apapa and Tincan, you have tank farms just beside the ports themselves, so the traffic in Tincan and Apapa is not just the traffic for cargoes, but we also have tankers who have added pressures on the roads.

How much regulatory control do you have over the deep sea port like the one Pinnacle Oil, has which is about 11km into the sea – big mother vessels will come, discharge through pipes to the land depot terminal. How much regulatory control do you have over that?

We do and they call it an SPS. It is a Single Port Model that is mostly used for liquid cargoes, whereby the vessels do not need to come on shore to either load or offload. We give approvals for locations of those things, we also do coordinate, we also know when their vessels are coming in, we need to regulate their in and out, they are also using our channels.

So whether you have an SPM, it is the NPA’s channels that those vessels would come through and the regulatory functions are as it relates to their marine activities, but as for the evacuation and loading, that is between them and Nigeria National Petroleum Corporation (NNPC) Limited and whoever the importers are.

How much  is your involvement with the Lekki Port? How much stake do you have?

Well, initially, the idea was for NPA to have about 20 to 25 per cent, but we felt, there was need for us to reduce government involvement in private ports and reduce our equity to about 5 per cent. But however, irrespective of the equity that NPA owns in that port, we still remain the regulator. We are the port regulator, we regulate the port activities and there will be revenue coming from there and of course, we know the issue of the land, there is contention as to who owns the land from a certain distance between the ocean and the land.

It is owned by the government or NPA, but that was sorted out between Lagos State and the Lekki Deep Sea Port. so that equity that we gave actually introduced statutory cover to the fact that you cannot have a private port in Nigeria and government does not have equity in it, so that is the essence of that equity.

With the success and completion of the deep seaport, how much has it inspired other business owners to want to replicate what is happening there in other parts of the country?

Without mincing words, actually we saw that all of a sudden, proponents of various sea port are struggling to ensure that they have their own  approved. Badagry Deep Sea Port has seen the need for them to also sit up. We immediately got the necessary approvals, which we have secured from the Federal Ministry of Transportation.

And we have had proponents that have been coming with their ideas. I can tell you, we have like three or four now that are really, really serious about investing in other Deep Sea Port. So they have seen the possibility, it can be done. They understand that somebody has set the pace and they see that it is going to be profitable based on the projections.

What are the new challenges that you have encountered and those ones you envisage as you move on?

In terms of a new collaboration with other government agencies that has really improved, I can ascribe that to probably to PEBEC. It has been done in such a way that we are made to sit down and work together to achieve those presidential directives. So whether it is the Nigeria Customs Service (NCS), Nigerian Immigration Service (NIS), we work together. We need to have improved collaboration between government agencies that is really important and it has improved, but it is still there.

We have issues to do with infrastructure, the ports are decaying and we need to rehabilitate them. What we have done is to take drastic, concrete and deliberate actions that will lead to the reconstruction of the physical infrastructure at the ports. Other issues could be probably funding, and because we are providing services and if we do not provide that service, the revenue does not come in.

So, we are requesting government to give us a bit more laxity to be able to spend to buy the necessary marine equipment, reconstruct the ports, provide service, because you cannot provide service if you do not have the necessary working tools, so that is a challenge on its own, but we are seeing some improvements on that, the government is listening to us and we are speaking to relevant ministries and agencies of government that will determine how much you can spend from the revenue that we have generated.

Are there plans to improve on the revenues you have generated so far and how do you intend to achieve that?

So, let us assume that we are losing 30 per cent of cargoes meant for Nigeria to neighbouring countries and by the time we improve our services and efficiencies to get in the trans-shipment cargo which we have never had in Nigeria, through Lekki deep sea port, that will be another source of revenue which is also huge and now by the time you also have improved scanning and inspection system by the Nigerian customs, that will also bring in more revenue.

We are automating our system currently and we already have the revenues mechanism, which we are using to generate revenue to raise bills and so on and so forth, but we have been working with the International Maritime Organisation (IMO) to deploy what we call a Port Community System. The Port Community System is a platform whereby all the stakeholders will come in to share information and documentation and automate their activities whether it is for importers or exporters and by the time we do that, it reduces the number of days it takes or hours for you to clear your goods.

It means that you will be able to clear goods faster and you will be able to bring back your cargoes into the country while also generating revenues. So, we are working with IMO to ensure that we do that. There are also new business lines – we are giving licenses to so many jetties to ensure that cargo is moved from the ports to other locations through the inland waterways and even the barge operations also is another new business for us. So, we see prospects, there are opportunities, it is just to tap into them and provide the enabling environment for them to thrive.

Do you have a projection in terms of what should come in?

I can say that easily we should be able to increase our revenue by between 20 to 30 per cent in the next year. Now, don’t forget that NPA has not increase its tariff since 1993 and every time you hear the cost of doing business at the port, people ascribe it to NPA, but it is not. If the Nigerian Customs increases its tariffs, it increases the cost of doing business at the port, if immigration or the Standards Organisation of Nigeria (SON) increases their tariff, or of NIMASA increases, the cost of doing business at the ports increases.

When vessels call at the port and spend longer days before it offloads its cargo, that is also cargo waiting time incurring demurrage. We are working to ensure that we reduce ship waiting time and the cargo dwell time, but even though we have not increased our tariff for how many decades, we are actually able to increase our revenue and we are looking at the possibilities of reviewing some of our tariff, because there are some tariffs that haven’t changed even when the naira to the dollar exchange rate has changed several times. As we speak, International Oil Companies (IOCs) are paying N1000 to use our channels, so those are things we are working on.

Can you shed more light on the barge operations?

So, for the barge operations what we did first of all, is that we realised that for us to get multi modal means of transportation, you need to provide multiple ways of transportation apart from the road, which is the normal one. We are looking at rail, sea,  and we have encouraged barge operations. We spoke with the terminal operators and a few individuals that had a few barges to say, ‘let us give you few license to start moving cargoes via barges.’

But of course, we gave them Standard Operating Procedures (SOPs) and conditions and they have been doing that over a year without the authority charging them anything and we realised that the total percentage in terms of cargo being moved by barges increased astronomically from 10 per cent, it doubled over. So we now have situations whereby containers and other cargo are being moved from the ports to off dock locations and other jetties and it is really encouraging and that has reduced the number of trucks that are on the road.

Some of the barges take 30 to 40 containers per movement, so that is 30 to over 40 trucks we are taking off the road, so imagine moving cargo from Tin Can and Apapa to Ikorodu or to Ijora, what you have done is that you have reduced the traffic that would have come to the ports. We have also realized that there are a lot of substandard barges, some of the pilots do not have the relevant and required pilot licenses, some of the badges don’t have communication equipment also and we came up with an SOP to ensure that all those are in place.

Before we came up with the minimum safety standard for truck. We also came with minimum safety standard for barges, we also gave them the SOP on the times that they are allowed to move, the routes that they should take, the communication that should take place between them and our control towers and we also encourage them to use self propelled barges, because most of them have a tug pushing the barge, which is not very efficient and it is very expensive, but we also tried to regulate the cost so that we get more importers or exporters to use the barges.

What have you done to improve infrastructure in Warri, Calabar and Port Harcourt Ports?

What we observed is that first of all, the ports in the East have the longest channels – for instance Calabar has over 110 km from the fairway buoy to the Port itself, then Warri has over 100 kilometres from the fairway buoy to the Port  and of course, the multiple issues of security discourage the pilots themselves and the ships from coming into port at a certain time. After 4 o’clock, nobody actually comes in there and then the infrastructure was bad, so the first thing we did was to say, okay, you know what, let us improve security patrol within those channels and so we had a discussion with the Nigerian Navy and I will like to appreciate the Chief of Naval Staff for his cooperation.

So, we have more security patrol along the channel and then we bought more marine equipment and we have given tariff relief especially in Calabar for importers, so, that way, they can use flat bottom vessels to come in there. We are currently working on the rehabilitation of the collapsed breakwater in Warri. A breakwater is a physical engineering infrastructure in the middle of the sea that is meant to reduce siltation and migration of silt into the channel where it collapsed over 10 years ago.

But we have been able to conclude and finish the surveys as it relates to the breakwater. The essence here, is to reconstruct it and it is going to cost a lot of money over a hundred million dollars to construct a new one. So, by the time you do that, you reduce the siltation into the channel.  But what we have been doing is remedial dredging up to the fairway buoy and that way, you will have more vessels coming in, because two to three years ago, the instances of vessels going aground was quite frequent and we have been able to resolve that.

We encouraged the port managers in those locations to also go out and find importers and businesses around their locations and neighboring states who are importing through Lagos and encourage them and let them understand the ports are viable, they are available, asking them if they can  bring in some of their cargoes through these ports and you see even in Calabar now you have more vessels coming into Calabar and we are ensuring that all the necessary cargo handling equipment are been provided by the terminal operators. We are monitoring the terminal operators to ensure that the agreement we have with them in terms of provision of cargo and equipment are in place. We are taking our responsibilities very seriously in those terminals and ports.

What’s the update on the export processing terminal and how it has boosted exports?

So under the Presidential directive in terms of ease of doing business, what we are mandated to do was to set up export warehouses and terminals within the ports, but of course you know that the size of these ports will not warrant that we create those export processing terminals within the ports, so we had to think outside the box and that is why we now advertise and ask for interested investors to show interest in developing those export processing terminals.

The essence of the export processing terminals is to have locations where an exporter will bring in his cargo, the cargo will be sorted out there, it will be tested, it will be certified, it will be repackaged, it will be containerised and then sealed and sent directly to the vessels. We are concentrating now more on agro produce and exports and that is to diversify the economy.

Before that, we used to have a lot of cases of perishable items getting spoilt at the ports before they are even exported and that is due to so many reasons either because of the NXP forms that have not been filled up or delay in loading or vessels that we’re leaving behind export cargo because they had more interest in taking out empty containers because of probably demand for high demand for empty containers in Asia. So the export processing terminals are meant to reduce that gap and also reduce cost of export.

We gave out 10 licenses distributed around Lagos and neighboring States and we have given them our conditions. The conditions are of course, we must have a weigh bridge, internet, you must have accommodation for customs and so on and so forth and you must have laboratories for testing and certification these agric products and out of the 10 about four we are very sure are ready to start business out of which two are more serious and then we had sat down with the shipping lines to also streamline charges and costs to ensure that whatever tariff is charged at the export processing terminal, there is no charge by the terminal operator so that there won’t be double charges, and we have also gave those provisional licenses and also gave them the data that at a certain date, we will terminate any license held by any company that has not met our requirements.

Currently, what we have done is to encourage local investors to be engaged and to be involved in the setting up of this export processing terminals and we keep encouraging Nigerians to invest in it. We will keep doing that until we find Nigerians that can do it, but I don’t think there is any business Nigerians will not be able to handle, it is just to have the right and enabling environment.

So, that has really helped and we have less complaints although, it is difficult to say all exports must go through the export processing terminals, because there are some Domestic Export Warehouses (DEW) which are being managed by Nigeria Export Promotion Council (NEPC) and are working with them to ensure that as they are coming in, they have smooth and quick entry into the ports using the ATO app. So this is just to encourage even small exporters, manufacturers, agric producers to be able to export agric produce when that time comes.

The traffic situation in the Apapa axis appears to have improved commendably, but there is huge traffic from Mile 2 into Berger along Apapa-Oshodi Expressway. Why is that?

Well, I don’t think that there is a port in Mile 2. Our own responsibility is the port corridor, but what we have done is working with the Lagos State Government to improve enforcements. You could have SOPs, you could have rules and regulations to advise people on where to park their vehicles, if there is no enforcement, we won’t be able to achieve that. I want to commend the Lagos State Government for working with us to do that.

The Lagos State government has set up a team that has LASTMA, LASTWA, NPA, FRSC, the police and some other government agencies that go round to ensure that we don’t have those issues of checkpoints. But what is happening towards Mile 2 is the road actually, the road is still being worked on and until the road gets better, all we can do is to be providing palliative patch up of roads here and there and I know the police go on regular patrol to ensure that the miscreants do not disrupt activities.

I am sure you know before this, traffic extended far back to Surulere? It was terrible, we hold virtual meetings twice a month with the drivers of truck parks, with the transport associations, with the operator of the e- call up system just to review what is happening on a weekly basis, if we need to tweak things, if there are any problems.

So is the consistent monitoring and follow ups that have led to the improvement you are seeing and have we achieved what we want. What we have now is far better than where it used to be. We have given more licenses for truck parks, created more parking capacity around the port locations and by that way, we are removing more trucks from the roads, because formerly they were just parking indiscriminately along the road.

Are you worried about the carnage being caused by some of these rickety trucks and what are you doing to salvage the situation?

Really, it is a major thorn in the flesh, it is major problem, wherever in this country you see a bad truck carrying a container, it simply means that a bad truck went into the port and came out unchecked. What we did was to collaborate with the FRSC and we came up with minimum safety standard for trucks and there was a time when we had over 14 or 15000 trucks registered on the ATO platform and by the time we insisted on them coming up to meet the minimum safety standard, we had very few because of the things that the trucks must have. 

Before now we were giving them yearly licenses, but we are thinking of reducing it down to about three or six months. We also insisted on the truckers having latches. They must be able to latch containers. However, I want to say that in recent times we have been seeing a lot of accidents from trucks carrying containers and if you observe, most times, the body of the truck flips with the container still attached to it. This shows that it was latched at the ports before it came out.

So, working with the Federal Road Safety Corps (FRSC), we have started an enlightenment and sensitisation campaign to let drivers understand they are not driving small vehicles, but trucks. We are now working with the terminal operators to say that any container or truck that leaves the port without it being latched, we will hold the terminal operators responsible, so if a truck goes into your location and it does not have the relevant mechanism and safety procedures for it to be latched then they do not have to load it.

Have you been able to resolve the dispute between Samsung and LADOL?

What has happened was NPA entered into a lease agreement with LADOL for a certain size of land and LADOL eventually sublet a certain part of it to Samsung, which in the initial agreement is allowed, if you want to sublet, you can, but you need to tell the authority. Samsung had wanted that land to be given to them directly without them leasing it from LADOL. LADOL had requested for an approval from the President for another 21 year lease renewal which they secured as at that time.

However, the NPA made the mistake of cancelling that approval to LADOL and gave the land to Samsung. The matter went to court, but I was mandated to ensure that we resolved the issues as quickly as possible. So, it is one of things that we achieved when I was acting Managing Director. I formed a committee and they discussed with both parties. Eventually we signed an agreement and out of court settlement, both parties withdrew their cases from the court and they are now back to business.

Where are we now on the lease agreement with the existing terminal operators?

As you know there was an inter-ministerial committee set up that had NPA, the Ministry of Transportation, Ministry of Justice, Bureau for Public Enterprises (BPE) and ICRC, that committee sat down to determine what to do in terms of the renewal of their concessions and of course they came up with an Outline Business Case (OBC) and a Full Business Case (FBC) and ICRC gave them the necessary approval. What is currently happening is that the government is being more diligent to ensure that we get a better agreement not like the agreement that was signed in 2006.

We want to be able to hold the terminal operators responsible to their duties and their development plan. We also want to ensure that we get the relevant revenue in terms of revenue sharing with them. We are waiting for the Federal Executive Council’s (FEC) approval. The Transportation Minister has presented the necessary memos, to FEC and they have made recommendations for us to make a few changes and they have presented the memo again to FEC for approval.  I believe that before the end of this administration, the issue  will be resolved.

You have been able to wrest cargoes meant for Nigerian ports from neighbouring countries such as Benin Republic, Togo, Ghana seaports. Can you talk more about this?

First of all is for you to determine who are the importers of these cargoes and if you determine that, you will then ask why they are taking these cargoes to those locations. As I have said earlier,  what we simply did was just improve efficiency. If you are efficient nobody wants to send his cargoes to Lome and starts dragging it down to Nigeria.

The Akwa Ibom State Government is said to believe that federal government agencies are frustrating its effort at developing the Ibom Deep Seaport port. What really is the problem with the Ibom Deep Sea Port?

To the best of my knowledge, ours is to provide technical assistance. A committee was set up and the NPA was part of the committee that sat down to look at these things and ways for development. We have done all the studies and we have worked on it, they have changed technical partners on the port, but our PPP department is well equipped and they are very knowledgeable and they are ready to handle anything that comes up.

They handled Lekki, they handled Badagry and they are involved in Ibom. I think it is for the state government to put  it on the front burner and I know that there is no government agency that would stall the development or frustrate the development of any deep sea port as it is in the best of the country.

I think one of the major issues might be a community dispute as it relates to the location of that port, which is what I remember. We are waiting for them any time they are ready, we will get back to keep working. We will be very happy to have one or two more deep sea ports in the southern part of the country. We are waiting to see and whoever comes and is very serious; we will work with them as seriously as we can to achieve it.