By Adedapo Adesanya
The federal government has revealed its position to discourage unsolicited port development proposals that are not based on viable projects and future developments contained in the infrastructure development plan of the government under the National Transport Policy and programmes of agencies under the sector.
This is coming as the Nigerian Port Authority (NPA) embarks on the process of developing a port development master plan that would set out the policy on port infrastructure development to match the current and future economic expectations/national goals and objectives.
The Minister of Transportation, Mr Mu’azu Jaji, in his presentation titled How To Streamline The Qualification Process To Encourage The Construction Of New Ports By States For A Sustainable Nigerian Blue Economy at the recent Niger Delta Blue Economy Investment Forum confirmed that the government had received unsolicited proposals some of which were initiated by state governments including the Lekki Port which was prior to the Infrastructure Concession Regulatory Commission Act, 2005.
He said, “Unsolicited proposals from state governments must undergo the required due diligence and procedures for constructing new ports. There is no shortcut to the process. Federal agencies also need to reduce the red-tape bureaucracies to make the process easy and seamless, observing the tenets of the ease-of-doing-Business, in order to attract Foreign Direct Investments.”
He noted that over the years, it had been observed that the bane of port development in Nigeria had been the absence of a Port Master Plan, which explained the number of unviable ports as well as urban encroachment to the port environment.
“A good example is the Lagos Ports with the attendant congestion along the port corridors. This development comes with its concomitant negative consequences on port efficiency and at a cost. This must be guarded against in future developments,” he said.
“Port development must be preceded by rigorous studies to determine both technical and economic viability. This is the only way by which we can move on the path of a sustainable Blue Economy,” he added.
The port development masterplan by the NPA was conceived to identify the gaps in infrastructure capacity; make projections on needed growth to address the capacity deficiency; and plan future development to ensure that port development is spaced out in time and over locations to ensure in time development, technology is up to date, avoid overcapacity that could result in unviable ports as in (Delta cluster of ports in the 1970s), ensure competition, and achieve economic growth, among other policy objectives.
The Minister acknowledged the legal framework governing the operation of ports in the country as in the Exclusive Legislative List contained in Part 1 of the Second Schedule of the 1999 Constitution such that all Nigerian Ports are Federal Ports with no provision for private ownership of ports in Nigeria, however, with the enactment of the ICRC Act, 2005, a window has been opened for the participation of the private sector in port development through Public-Private Partnerships arrangement.
While no private ownership of the port is currently contemplated by the country’s laws, current port development processes involve submitting a proposal for development (solicited or unsolicited), developing an outline business case and the final business case containing technical and financial details and obtaining all necessary approvals to proceed, granting of a concession for port development and operations by the Federal Government; and executing a concession agreement containing details of the concessions – performance parameters, financial provisions, technical standards, concession period (which takes into account the recoupment period, construction period and actual port operations period, reversionary rights and other relevant provisions).
Mr Jaji believed that the emergence of the PPP processes had further streamlined the qualification process for private participants in the blue economy.
“This was an enabler that made it possible for the state governments to be major promoters in the emergence of Deep Sea Ports in Nigeria. Every port has both the waterfront and the backup land area, which is within the legislation of the federal government, while the latter is within that of the state since the Certificate of Occupancy is being given by the state government,” he stated.
The Minister also acknowledged that the Blue Economy concept had developed as a sound paradigm for the comprehensive and sustainable management of marine and coastal areas and their natural resources.
He said, “Considering that Blue Economy includes activities such as fishing which involves the use of vessels/crafts that call at waterfront terminals or jetties, there is also a framework for licensing facilities in this category. This could be through the grant of jetty licenses or the designation of existing terminals as fishing terminals.
“One such process which is ongoing is for the designation of KLT I in Lagos as a fishing terminal with the hope that others will follow across the country. It needs to be stated that fishing terminals are ports used for vessel calls, just like any other facility. The involvement of NPA in this situation is the provision of the facility while the fishing activity is regulated under a different sector.
“Coherent and optimized co-existence of all sectors of activity is needed while preserving the quality of ecosystems, goods, and services in the long term.
“The Port plays a pivotal role in the development of the Blue Economy as the interface between maritime and terrestrial space.”
While acknowledging that Ports are the epicentre of many aspects of the Blue Economy, including:, tourism and leisure, fishing, aquaculture, offshore renewable energy, marine conservation, coastal protection, shipbuilding, oil, and gas, he said any call for streamlining the qualifications process for the development of new ports in a Blue Economy would be factually inaccurate with the assumption that there was hitherto no uniform standards for the qualification of new port developers.
Rather, he said the emergence of a Blue Economy would only introduce another layer or layers of qualification for new ports and facilities.
“The aspect of the Blue Economy recently introduced only added another layer or layers of qualification that had not been in existence since issues relating to the environment and its impacts on port development is a relatively recent phenomenon,” he said.
“The requirement for Environmental and Social Impact and Assessment studies in capital projects, including port infrastructure, is a relatively new concept in these climes.
“It is simply required as a major qualification that the developers of new ports MUST show how such developments will impact all aspects of the ocean, including diversity, environmental protection, commerce, the lives of members of the host communities, and the improvement of the economic prosperity of the country through the oceans,” he noted.
