Four years after the ports were concessioned to private terminal operators the much expected reduction in the prices of cargo clearance has remained a mirage even as concessionaires keep on inventing new ways of siphoning money from importers. The increases port operators say is not in line with government’s promise of lower rates few years after concession. The port concession arrangement became necessary because of low productivity by the Nigerian Ports Authority, delay in cargo delivery, lack of cargo handling equipment, bureaucracy in obtaining government’s approval in the execution of urgent projects and port congestion. Based on these premises, government sought for the help of private investors believing that concession will bring about competition, attract more importation and eventually reduce the cost of doing business at the ports.
Presently, the rate of importation has increased; competition at the ports has not been felt while the cost of doing business is still rising. However, the concessionaires are blaming the high charges on the rising prices of petroleum products to run their machines, the cost of acquiring cargo handling equipment and the need to make returns on their investments, which is a reasonable argument. But freight forwarders are of the view that an increase of over 100 percent higher than what importers used to pay before concession was not acceptable. According to them, the shipping lines, terminal operators and off-dock terminals have jacked up their prices, while demurrage on containers have also tripled far beyond what was charged during the Nigerian Ports Authority (NPA) era.
On his part, the managing director of Twindeck Shipping Limited, Charles Okorefe, said for 20-footer container, shipping companies charge N5,000 for document release, container cleaning N3,000, shipping line charges N28,000, telex release N5,000, amendment charges N15,000, as well as five percent Value Added Tax (VAT) of all the total charge. He explained that the shipping companies also collect N580 for NPA as Maritime Organisation of West and Central Africa (MOWCA) levy and demurrage on containers that are not returned on time. Terminal operators also collect N3,500 delivery charges, N25,000 terminal handling charges, N400 vehicle entry permit, N2,500 to position containers for examination and N1,500 storage or rent charge for first three days after grace period and N3,500 after 24 days. For the off-dock terminal, according to him, they collect N20,000 as transfer charge, N2,000 as release and documentation, N5,000 as royalty to terminal operators, N2,500 to position containers for customs examination, N3,500 as labour charges for examination, including N1,250 as terminal delivery charge and N400 for vehicle entry permit.
During the NPA era, Okorefe said they collected N1,204 as wharf age and N1,294 for documentation and release, terminal delivery order including vehicle entry permit, stressing that importers also pay five percent VAT of the total charges. The NPA also charged N375 as demurrage after three days grace period and N750 for 40-footer, no matter the number of days. However, he admitted that the condition of service has improved drastically since after the concession started, maintaining that cargo delivery time has improved unlike during the NPA period when it could take about three weeks or even one month to locate a container, but again, that should not be used as a criteria to rip-off Nigerians.
Last year, the Lagos State Government came up with Wharf Landing fee in which cars are to pay N300, 20-footer container N500 and 40-footer containers N1,000.00 respectively. Moreover, the Federal Government has also mandated the Nigerian Ports Authority since January 11, 2010 to start collecting container tracking levy which according to the Transport and Port Management Service, an agent that will collect the money on behalf of the Authority, said it would not attract an additional cost to the importers.
On his part, the president, National Council of Managing Directors of Licensed Customs Agents, Lucky Amiwero, said the operators are having field day because government has decided to run the port upside down. There is nowhere in the world where the ports are left to private companies without first having a law to back it up, stressing that in Nigeria, everybody does what is right in his own eyes because nobody is in-charge.
“Who is the commercial regulator? Who is in-charge of the port and what is the function of the Nigerian Ports Authority in the new era? Amiwero inquired.
He observed that with the high charges at the ports there is nobody to complain to, neither is there any law with which to sue the terminal operators for breaching the terms of the concession contract. Even the terms of agreement which the Bureau of Public Enterprises made with the terminal operators are being kept secret, he maintained.
For the managing director of Will Trust Services, Aloysius Obicheozo, what the terminal operators are to charge have been enshrined in the concession agreement though it has not been made public, but it is not being followed, regretting that government which ought to address the increasing levies is even introducing more charges.
Similarly, Cecilia Offor, an importer, observed that unfriendly port charges has been the major factor contributing to the diversion of cargo to the neighbouring countries over the years. He pointed out that as long as government and service providers continues to impose more charges to the importers, it would continue to distort the revenue generation of the Nigeria Customs Service because some would prefer to take the risk by smuggling these items into the country in order to evade duty. She pointed out that as long as these goods are smuggled into the country because of high port charges, it will never encourage genuine importers because they will sell at higher prices and would not be able to compete with the smugglers.
-Vic
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