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News Stories in 1st Quarter 2007 Edition of DDH Magazine

Cover Story:

APAPA BULK TERMINAL – a major re-development!

Apapa Bulk Terminal in Lagos is today undergoing the biggest change in its history courtesy of a 25-year lease it got in the 2006 concession programme. In fact, berths 1 to 4 of Apapa Quays, which were Nigeria’s first seaport infrastructure have never been redeveloped but for now that the bid winner is pumping in millions of dollars to modernize it.

When construction started in 1921, the first four Apapa deep water berths were seen by the colonial government of the day as only an improvement to the Customs Wharf located at the Lagos Marina. The British administration had just begun the systematic exploitation of the natural resources of the young federation by shipping through two axes, Lagos and Port Harcourt ports. Only minimal additions were made to the original infrastructure, and only cursory management changes were adopted by succeeding governments in running the ports. However, the buildings – sheds, wharves, warehouses, quays, derricks and indeed all superstructures were made to last. By the time the federal government began implementing its seaport reform agenda in 2004, both the colonial seaports and others built during post-independence had become massively run down. It is now under the steam of private sector port operators that the Apapa Bulk Terminal is being redeveloped.

Owned by Flour Mills Nigeria Limited, Apapa Bulk Terminal Ltd is being managed by Capt Emmanuel Omotayo, a first generation master mariner trained in the 1960s. The Terminal won the concession to run berths 1,2,3 and 4 in the just concluded Nigerian seaport reforms and the sheer transformation of the 85-year-old facilities is nothing short of revolutionary. Since taking over from NPA in April 2006, a USD5m new cement on-loader has been installed which reduced the discharge time for ships from 10 days to 5 and cut out the emissions that constituted pollution in previous years. In shipping, the reduction in discharge time is equivalent of a quantum leap. For accountants, this can make the difference in the decision to send a ship to either Cotonou or Lagos. For the federal government, this amounts to achieving the gains of the port reforms in double quick time. This is not all, since the take over of the terminal operations, the wheat discharge equipment, the marine tower, has also been overhauled at very exorbitant costs, thereby reducing discharge time for ships. The terminal has procured new trucks, forklifts and large quantities of spares stocked. Moreover, Apapa Bulk Terminal has taken over the repairs of failed sections of the port which, in pre-concession days, gave many a truck driver incalculable pains steering their articulated vehicles laden with goods. In short, quayside thoroughfares at the terminal are now needle smooth, paving way soon, as Capt. Omotayo informed DDH for NPA to begin an ambitious dredging project to deepen draught to 14 metres. When this happens according to Omotayo, it will amount to a virtual revolution in the way ship owners send vessels to Apapa Bulk Terminal. Hear him, “ this means that instead of three ships, you send only one, instead of three insurance packets, you do one, instead of three sets of crews, you send only one…a 30% drop in the cost of shipping goods to Nigeria. “

But is Capt Omotayo totally happy with the state of affairs if maritime trade in Nigeria today? He answered in the negative. Because he sees all the gains being made by the Obasanjo administration in danger of being frittered away due to unwieldy policy implementation by some government agencies like the National Maritime Administration and Safety Agency, NAMASA. As the vice-chairman of the Association of Terminal Operators and an indigenous marine expert, Omotayo fumes that the provisions of the bill now before the National Assembly for the formal establishment of NAMASA, if passed into law, will demoralize current holders of concessions for terminal operations in Nigeria. The annoying provisions concern the addition of extra charge of 2.5% for cargo handling to the existing 3% of total freight charge which has been in force since the defunct National Maritime Authority (NMA), the precursor to the NAMASA was formed in 1987.

In fact, Capt Omotayo’s inteview revealed lots of inconsistencies that ought to be properly streamlined if the gains now emerging are to be consolidated. DDH investigations show that other terminal operators also feel that the NAMASA bill will impose undue burdens on their development finances and run counter to their ambitions to develop the terminals to international standards and even train dock labour. Their critique of this government move is indeed part of the gains of democracy because in the days of yore when the military held sway, they couldn’t muster the gumption to have their say no matter how right they were. But now, their onset on the Nigerian maritime scene seems like a compendium of gains and expert hands-on opinion and putting things right. For example, the practice of “akube” (ghost workers) was revealed to the magazine that whereas the defunct NPA operational module utilized and paid 800 dock workers every month at the terminal that Apapa Bulk Terminal is now running, the concessionaire utilizes only 50 dock workers to do the same chores. But going on from there, Capt Omotayo queried the justification of the additional 2.5% cargo handling charge said to be for the management of dock labour….” NAMASA is asking for 2.5% of cargo dues and delivery charges…They are not giving us anything, we have inherited the labour, we have absorbed the labour. We have employed them as permanent staff, we are training them, we are investing on the equipment and we are training the labour to know how to operate the equipment, and then government agency is coming through the back door to say it wants to regulate them. What are you regulating? Is it the machine or the people?”, he queried. (See the boxed interview section below for details). On the part of NAMASA, the DG, Mrs Mfon Usoro has replied that “NAMASA had the three per cent levy to perform basically the major functions and now NAMASA has the duties that go beyond what NMA was performing under the National Shipping Act. We have got a lot to do and if labour is added – the major aspect of maritime industry is added to the job of NAMASA”. Even the BPE has weighed into the debate when it submitted to the National Assembly that “The concession agreement provides for the payment of three levies by concessionaires. These are entry fees, throughput fees and lease fees. An additional charge of 2.5 per cent will be an overkill”. The arrow heads of the position of the terminal operators now appear to be AP Moller Terminals and Apapa Bulk Terminals Ltd.

But what is the modernization that Capt Omotayo is leading his firm to install at Apapa Bulk Terminal? First, the terminal has been re-planned to maximize space and modernize its operation. In addition, value-added services are being offered now to patrons of the terminals, like fertilizer merchants who can now liaise with the terminal to blend, brand and bag various specifications of their fertilizer products and have the consignment delivered to specified destinations. We asked Capt Omotayo how this is going to work. He said importers of fertilizers who choose their services can offload all the drudgery to the terminal’s workers, including the production of any specified type of branded bags, and the fertilizer will simply be bagged by Apapa Bulk Terminal and made ready for delivery or even be delivered to consignees. For this purpose, the terminal is moving its own blending plant from Iganmu (on the outskirts of Lagos) to the terminal, where they are erecting a purpose-built blending plant. The entire series of buildings being planned and executed at Apapa Bulk Terminal today has never been done since the port was built in 1954. Three sheds have been pulled down for this purpose and from the resultant space, an office block, a modern warehouse and the fertilizer blending plant will be built. The terminal has started constructing alternative common user thoroughfares so that public movements within the port premises will not be hampered by the fencing off of terminal grounds for security reasons. One of such a stretch of roads cost the terminal N17.5m. Of the many sheds that fell to the lot of the terminal, some of the roofing have decayed and become unsuitable for proper goods storage. The terminal is now busy re-roofing these.

On a tour of some of operational areas, the terminal manager, Capt Oke explained some of their game plan. Of the quayside sheds not billed for demolition, he told the magazine that the block structures were still strong but that the roof had gone bad and needed fixing, which some workmen were busy doing when we passed them. For cement operations, which he called their mainstay, Capt Oke said when the new on-loader was installed, it brought down minimum time spent in port for a 25,000 metric ton ship to 5 days from 7 days two years ago. He said the new onloader can actually facilitate a minimum time of three days if the reception facility had the full complement of ample silo storage for the product. Now, the deliveries have to be made to clear space before the ship’s consignment can be fully discharged into the silo and this affects the minimum time spent in port. However, the terminal’s old battery of three cement discharge machines (called hoppers) are reserved as back-up, ready to complement offloading in case of any emergencies with the new system.

On the other hand, their wheat discharge machine has also been upgraded making turn around times at the terminal to improve by more than three days saved from time ships previously spent in port. Upgrading the wheat discharge machine (called marine towers) he said, brought their operations to be in line with the operating system of their US principals, saying the upgrade installed machines for both discharge of various types of wheat and loading of pellets for shipment to the US. The terminal is now doing 7,500 tons per day up from 3,500 tons in pre-concession days. Ultimately, the terminal plans to install a modern on-loader for wheat just like the one for cement. All these developments he said were aimed to continually reduce time ships spent discharging or loading at their terminal.

For Capt Omotayo, he believes that reconstruction and rehabilitation work at their terminal will be continuous for the next five years or more. When DDH wanted to find out if the whole motivation was mainly financial profiteering, he fired back that some of his professional colleagues cannot wait to do things right for Nigeria. “…we want to show to Nigerians that we are capable of doing it. And we have seen where it has been done in other parts of the world. You go to the port of Tilbury, you will think it is ghost town. You don’t see many people moving around. ….”