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How viable are deep seaports outside Lagos?

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Last week, Bayelsa State Governor  Senator Duoye Diri visited the Nigerian Maritime Administration and Safety Agency (NIMASA), where he urged the Director-General, Dr. Bashir Jamoh, to support the development of the Agge Deep Seaport in Ekeremor Local Government Area of the state. In this report, OLUWAKEMI DAUDA looks at the viability of most of the proposed deep seaports in the country.

The visit by the Bayelsa State Governor, Duoye Diri, to the Nigerian Maritime Administration and Safety Agency (NIMASA) Director-General, Dr. Bashir Jamoh, provided the tonic for the state’s number one citizen to make a request: assist us to develop the Agge Deep Seaport in Ekeremor Local Government Area. Though the request was granted, experts are asking if that project would not become a white elephant project in the long run.

Race to have deep seaports is on

Before now, it appears many governors were in the race to outdo each other in the quest to establish a deep seaport in their states.

For instance, the Lagos State Government is promoting the Lekki Deep Seaport and eyeing the Badagry mega port. Ondo and Ogun states are championing the joint development of the Olokola Deep Seaport. Akwa Ibom State joined the fray with Ibom Deep Seaport, while Cross River State is advocating the Calabar Deep Seaport.

Diri said: “A lot of countries are moving away from fossil fuel and the maritime sector gives Nigeria an alternative.

“All the eight local governments in our state can be accessed by water. In fact, the headquarters of three of these local governments can only be reached by water. This shows how important our state is to national maritime development.

“We are, therefore, seeking partnership with NIMASA, which is the apex maritime regulatory agency of our country, to enable the organisation to expand its regulatory activities to our state.

“NIMASA and Bayelsa are inextricably one, and there is a need for both to work together to strengthen the country’s maritime domain.”

He urged NIMASA to support the state to develop its maritime potential, especially in training, youth development, the establishment of a maritime academy in the state, and the development of the Agge Deep Seaport in Ekeremor Local Government Area.

Jamoh said Bayelsa was one of the agency’s strongest allies. He assured the governor of the agency’s support in maritime growth.

‘$3b is needed to build a deep seaport’

The NIMASA chief said about $3 billion was needed to build a deep seaport. Stakeholders are wondering if the Bayelsa State governor and his counterparts have done their homework on the viability  of the proposed deep seaports.

One of them is the spokesman of terminal operators, Mr. Bolaji Akinola. He said: “The question is, does Nigeria require a deep seaport? Yes, it does, but one is enough for now and I believe Lagos remains the most-viable state to host such facility. Why will any state, in this period of global pandemic, expend several billion dollars on a facility that might not yield good future returns or add significant value to the economy of the state or better the lives of its citizens?

“I honestly do not believe that any deep seaport outside Lagos will be viable. There will not be sufficient cargo volumes to support such facilities in the next 50 years. This is clear enough from the underutilisation of port facilities in the country, especially those facilities outside Lagos. For instance, while the ports in Lagos have capacity utilisation of about 50 to 60 per cent at present, the ones in the Southsouth – Warri, Port Harcourt and Calabar – have about 25 per cent capacity utilisation. The exception will be Onne Port, which is fairly busy. Even the so-called Olokola Port; can it honestly compete with the ports in Lagos or the ports of West African countries such as the Autonomous Port of Cotonou or the Port of Lome for cargo?

“I think rather than establish these mega white elephant projects, the governments of Akwa Ibom and Cross Rivers states should join hands with the Federal Government to address the shortcomings of the Calabar Port so that it can attract business and compete with other ports in the sub-region. The shortcomings of the Calabar Port include shallow draft, which has made it impossible for large vessels to berth, poor port access road and the restriction imposed by the Ikom Bridge.

“Container throughput at Lagos ports was expected to hit two million 20-foot equivalent units (TEUs) this year, whereas the maximum capacity that the ports and the Inland Container Depots (ICDs) in the state can accommodate is 2.2 million TEUs. Lagos ports alone handle 90 per cent of the cargo in and out of Nigeria. With this expected growth in container volumes, the combined capacity of Apapa Port fully-developed and Tin Can Island Port and the Inland Container Depots (ICDs) in the Lagos area is expected to be inadequate within the next five years. The same situation also applies to general cargo terminals.

“A new port will therefore be needed to keep up with the demand for capacity, as the existing ports are surrounded by the city and cannot be further expanded.

“New deep seaports, in addition to Rivers Port, Calabar Port, Onne Port, Warri Port, Lagos Port Complex Apapa and Tin Can Island Port, is a waste of resources. There is simply no market for it and there won’t be in another half a century,” Akinola said.

 Imperativeness  of deep seaport

Deep seaports were conceived to improve the cargo handling capacity of the ports and increase Nigeria’s gross domestic product (GDP). The handling capacity of ports in Nigeria is put at 60 million metric tonnes, though demand and use is about 100 million metric tonnes. They are expected to rise with the increasing population, urban expansion and attendant demand for more markets.

The cargo throughput handled in the ports since the ports were concessioned in 2006 has increased geometrically. According to global port development, out of over 100 seaports being built the world over, 75 per cent of these are deep seaports or terminals. The others are mostly inland waterway ports and jetties.

This indicates that the country needs better designed port facilities in tune with increased cargo traffic, for the global competition. Also, emphasis is shifting to larger more economical vessels that require deeper harbour drafts. Global logistics trends have made the need for deep seaports more imperative.

Also, the last two decades have witnessed a major shift in the exploration and production focus of international oil companies (IOCs), with deep offshore frontiers becoming more attractive and widespread. This has naturally affected the dynamics of crude oil carriage, just as more efficient means of petroleum products and liquefied natural gas (LNG) supply and distribution are sought from the downstream segment.

Crucially, logistics services for these new frontier developments define the core of operations, costs and efficiency, with bigger vessels infinitely more able to leverage scales and further, thereto, on costs. The foregoing defines the shipping and oil and gas reality in Nigeria, and paints the canvass for deepwater ports in bold relief.

Stakeholders called on the promoters of all deep seaports to ensure rail link in their projects.

Why the ports are not competitive?

Few weeks ago, the Managing Director, Nigerian Ports Authority (NPA) Ms Hadiza Bala-Usman, said the reason the ports were not competitive compared with their counterparts in neighbouring countries was the absence of deepness with drafts of about 17 metres.

She said the world has adopted deep seaports. She, however, promised that her management team would work with the new NPA Board to ensure that work on the deepening some seaports were completed.

‘Unstable govt policies’

Also, stakeholders said unstable government policies, lack of safety and security of funds invested by promoters were some of the challenges hindering the development of deep seaport.

Others include comfort of investors, non-provision of measures to ensure continuity, lack of infrastructure and efficient transport system.

A law teacher at the Lagos State University (LASU), Dr. Dipo Alaka, bemoaned the absence of plans for rail connectivity and use of barges on inland water access to the port, saying these would affect the multi-billion dollar project.

“Go to Apapa and see the huge but avoidable national embarrassment that is going on there. There is congestion in Apapa because those who handed over the ports to the terminal operators failed to plan for them. There is congestion within and around the Lagos ports because over 95 per cent of our cargo goes on the road. Therefore, both the Lagos State government and the promoters of the Lekki port  must ensure that we have a seamless cargo  evacuation from the port, if not, it’s laughable to think that we will not have congestion by the time the port becomes operational,” Alaka said.

These fears are not unfounded considering that upon completion, the Ibeju-Lekki-Epe axis will be home to huge traffic arising from activities in the deep seaport and the Dangote Refinery, among the other major projects cited in the Lekki Free Trade Zone.

The Technical Director, Lekki Deep Sea Port, Mr. Steven Heukelom, agreed that the masterplan of the project does not include rail. He however said it was not too late to include same in the project because adjustments were possible in any ongoing project.

It would be recalled that NPA has been under pressure to develop deep seaports, including the one being promoted by the  Bayelsa State governor.

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