Exclusives

Regulatory squabble limits investment in water transportation in Lagos

by JOSHUA BASSEY & OBINNA EMELIKE

September 29, 2017 | 1:00 am
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A regulatory squabble between the Federal and Lagos State governments, as to who oversees the states waterways, is seen limiting the growth of the water transportation sector in Lagos, despite the potential and huge investment opportunity the sector presents.

Lagos, a coastal city surrounded by water, with over 24 identifiable water routes, which connect different parts of the state, including Epe, Ikorodu, Badagry, Lagos Island, Apapa, and the Mainland, moves over 90 percent of its estimated 20 million population by road, creating a huge opportunity for investment in transportation by waterways.
A recent Appeal Court judgment, which upholds the powers of the Lagos State House of Assembly to make laws controlling economic activity along the state inland waterways, had drawn the ire of the National Inland Waterways Authority (NIWA) which urged both operators in the sector to disregard the pronouncement the court.

“Many commercial boat operators have been caught in this crossfire of who to obey, who to pay and have been harassed severally, by some elements who insist we paid to the wrong person. All these do not encourage business and only those who can take risk are investing in the business for now”, Onanuga said.
Before the Appeal Court ruling, a Federal High Court had confirmed the powers of NIWA to regulate inland waterways, including dredging activities.

Boss Mustapha, managing director of NIWA clarified that the Court of Appeal only granted Lagos State the power to legislate on intra-state waterways, such waterways that originate and end within the state.
Mustapha had, however, noted that such waterways do not exist in Lagos State because all bodies of waterways in the state are international, tidal, intra-coastal and/or inter-state waterways.
“The Court of Appeal retained the power to regulate international, intra-coastal and inter-state waterways in NIWA, being items provided under articles 36 and 64 of the exclusive legislative list of the 1999 Constitution (as amended).
“It is also imperative to notify the public that beside this Court of Appeal judgment, there is also another subsisting Court of Appeal decision in G. M Enterprises Limited vs C.R. Investment Ltd. reported in (2011) 14 N.W.L.R. part 1266, page 125, where the Court of Appeal held that NIWA has been conferred with far reaching powers and right to control, develop, manage and use all the lands, navigable waterways, inland waterways, river ports etc throughout Nigeria,” Mustapha had argued.

But the Lagos State described NIWA’s claim on the recent judgment of the Court of Appeal setting aside the judgment of the Federal High Court and allowing the appeal of the state government, as misleading.
Steve Ayorinde, the commissioner for information, said the lead judgment delivered by Justice Hussein Mukhtar, of the Court of Appeal was clear.
“Any arguments to the contrary by NIWA are misconceived and should be disregarded. It is not in doubt that this judgment favours the state government and because the status quo has changed, is the reason for the purported notice of appeal referred to by NIWA.
Meanwhile, commuters patronising ferries on Lagos waterways have risen from 600 to 2.5million monthly, between 2009 and now. This signals the state government’s resolve to exploit other means of transportation and take pressure off the congested roads, which currently account for over 90 percent of movement in the state.

In spite of the growing number of passengers now embracing the waterways, especially due to congested and poor road networks, investors seem to be lacking the confidence to stake their money in the sector, as the Federal and Lagos State authorities continue to lay claims to the ownership and control of the state inland waterways, leaving investors confused as to whom to deal with, in terms of taxes and levies.
Ganiyu Balogun, CEO, Tarzan Marine Enterprises Nigeria Limited, a leading player in the commercial ferry business, noted that though the traffic situation on the different routes and Apapa- CMS, Mile 2-Apapa may offer a temporary boost to boat business, the harsh business environment, including multiple taxes, among other issues, do not encourage boat operators.

Balogun says investors would be encouraged to invest more, especially considering the heavy congestion on the roads, if the environment was more enabling, and there were laws safeguarding investments on waterways.

Afis Onanuga, a commercial boat owner, said it costs almost N140,000 to a get an operating license from the Lagos State waterways, along with the legal battle between National Inland Waterways Authority (NIWA) and Lagos Waterways Authority (LASWA) as to who controls the waterways in Lagos.
Industry watchers say the exploitation of the state’s waterways for transportation would ease congestion on the roads, reduce commuting time, create jobs, reduce house rents in the state, by making some remote and cheaper locations such as Badore, in the outskirts of Ajah accessible.

Water transport lags behind other modes in Lagos, accounting for less than 2 percent of overall commuter volumes, in a state ,with an estimated population of 20 million inhabitants.
Experts have attributed this to poor waterway infrastructure and management in terms of dredging, mapping, lighting and safety surveillance, among others.
There is also the myth that many Lagosians have a phobia for water and would rather travel by road or rail. This myth has however been broken by the geometric rise in patronage of water transport, and industry watchers say if the system is well managed, especially as regards efficiency and safety, many more commuters would take boat rides.
The state government is taking steps to concession certain jetties to private managers and identifying some others for upgrade, ahead of plans to deploy standard ferries with state-of-the-art facilities including Global Positioning Systems (GPS) in aid of safe navigation.
Some of the water routes in Lagos are Ikorodu, CMS, Lekki, Falomo, Ijegun, Ebute Ero, Apapa, Majidun, Badore and Mile 2.

Paul Kalejaiye, Chief Executive Officer of the Lagos Ferry Services (LAGFerry) told BusinessDay that standard vessels ordered by the government are expected to arrive in Lagos before the end of this year, and that this will bolster the confidence of commuters and encourage private investors to explore investment opportunities in the sector.

“I believe the arrival of these ferries will further increase commercial activities around the Lagos waterways. I expect that this will encourage other investors to look in the direction of this sector,” Kalejaiye said in an interview with BusinesDay.

Abisola Kamson, managing director, Lagos Waterways Authority (LASWA) the state regulatory agency, confirmed the increase in the number of commuters on the waterways and observed that safety remains the topmost priority of the agency.

Kamson said measures being taken include channelisation of the routes and deployment of cameras and other navigational aids, aimed at enhancing safety and making the sector more attractive to investors and commuters.

According to her, the ultimate goal is to integrate the waterways into the public transportation masterplan, with a target to grow monthly patronage from the current 2.5million to 15 million passengers within the next ten years.

 

JOSHUA BASSEY & OBINNA EMELIKE


by JOSHUA BASSEY & OBINNA EMELIKE

September 29, 2017 | 1:00 am
  |     |     |   Start Conversation

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