Port Reforms - Success Story
It is generally agreed that, reduced turn-around-time for vessels, reduced cargo dwell time, as well as security of ships at berth, cargoes at terminals and security of persons in the ports are major determinants of a good, efficient and user-friendly port.
Obviously, the desire to achieve these ideals informed the policy which the Federal Government of Nigeria embarked upon a few years ago. The policy was to ensure that Nigerian ports were re-engineered to compete favourably with other ports of the world.
The primary aim was to turn Nigerian Ports Authority into a brand name and a first-choice port in West and Central Africa, and indeed in Africa.
Apart from this rationale, Nigerian ports were also in need of huge resources for rehabilitation and modernization to make them more efficient and meet the demands of port users and also be a profitable venture.
The idea of restructuring the ports which is also in tandem with the economic policy of the Nigerian government is to grow an economy that is robust, private sector-driven, locally and globally competitive and efficient.
The port reform program was therefore, designed to make the ports competitive, innovative and capable of attracting private sector investments.
The basic tenet of this reform program provide for public ownership of port infrastructure and transfer of cargo operational responsibilities to the private sector as a means of improving efficiency, attracting private funds and freeing public resources for social services.
To kick-start the process, the concession model was adopted, while a new structure was put in place in line with the new status of Nigerian Ports Authority as the landlord.
The concession model was adopted because of its relevance to the emerging trend of the globalization phenomenon and its apparent features, among which are:
- Emergence of very large vessels with greater cost effectiveness, speed, improved cargo handling and reduced unit freight cost
- Emergence of international terminal operators with specialized technical efficiency in cargo handling
- Port competitiveness
- Fluid movement of goods across international borders
- Offshore manufacturing
- Electronic business transaction
The concessioning process led to the emergence of Twenty-five (25) Private Terminal Operators (PTOs) and one (1) Build, Operate and Transfer (BOT) initiative.