Terminal operator moves to avert port congestion as NPA fumes

Following the recent threat from the Nigerian Ports Authority (NPA) to take over the operations of APM Terminals Apapa, the terminal operator said it has put measures in place to avert congestion at the Lagos port.

NPA had in a letter dated, January 24, 2020, warned APMT that it would no longer tolerate delays in berthing vessels at the firm’s terminal, which it said has resulted in vessels waiting at anchorage for 25 days or more to discharge cargo.

It had issued a 30-day ultimatum to the terminal operator to address alleged lapses, which is will elapse on March 13.

But the management of APM Terminals Apapa yesterday said that it had placed orders for more equipment to cope with the significant growth at the Lagos Port.

The Managing Director of APM Terminals Apapa, Martin Jacob said, “Due to the conducive economic environment coupled with the closure of the border with Benin, Lagos ports witnessed a spike in volume as cargo was diverted from Cotonou, with periods such as October witnessing up to 50 per cent Year-on-Year growth of imports.

“APM Terminals Apapa has expedited the investment in additional equipment, with the first batch of three cranes already in operation after arriving within the last month.

“A further five cranes are scheduled to arrive within the next few weeks to not only handle the ocean-going vessels but also inject much-needed capacity for the needed barging.

“The current investment phase, which will cover yard expansion apart from equipment will cost about N65 billion.

“APM Terminals Apapa is committed to delivering the Nigeria Ports Authority’s vision in enhancing the country’s maritime sector,” he stated.

In 2006, APM Terminals Apapa was awarded the concession to manage, operate and develop the Apapa container terminal at the Lagos Port Complex, after the Federal Government concessioned Nigerian ports with the purpose of improving port services through private investment and expertise. The 55-hectare facility has 1,005m quay length, 13.5m draft alongside with an annual handling capacity of 1.2million TEU.

So far, APM Terminals Apapa said it had invested N130billion in infrastructure, IT upgrades and modern container handling equipment to improve both quayside and landside operations.

The Guardian learned that the NPA’s action was in the wake of several complaints by clearing agents, importers and major stakeholders in the maritime industry who warned about the implications of the congestion.

The NPA in the letter stated: “I refer to our recent letter to you ref: MD/17/MF/VOL.XX/049 dated 24th January 2020, in respect of the delay in the berthing of vessels at your terminal. In the said memo, we drew your attention to our discontent in observing that vessels have to wait at anchorage for 25 days or more to berth and discharge cargo. It has become necessary to reiterate the essence of the government’s decision to concession the ports in 2005, this being to engage the private sector in the development of port infrastructure to promote operational efficiency, invest in automation of port process and enhance the economy. We expect that as a serious investor, AP Moller terminal would have made a considerable investment in relevant port infrastructure to improve the condition of the port as inherited, and would have invested in upgrading relevant cargo handling equipment in order to boost port efficiency.

“Our observations have not justified the reason for awarding you the concession, as we have not witnessed substantial investment by you in promoting port operations. This shortfall in efficiency is very glaring as there seems to be a very wide gap in your investment in Nigeria compared to your investments in our neighbouring African states, as they are better equipped and more efficient in their services.”

“We, therefore, wish to inform you that in the event that APMT continues to fail to comply with its obligations and we do not see any change or improvement in your overall operations, resulting in the improvement of the turnaround and cargo clearing times, we would have no option but to invoke the terms of non-compliance, as set out in Article 8.1, which states, ‘if the lessee fails to rectify its failure, the lessor may fulfill such obligation for and on behalf of the lessee at its own cost. The lessor shall then be entitled to recover such costs provided that computation of costs to be recovered shall be based on the acceptable bid from one out of three bids submitted by reputable companies in such a field of operation…

“In accordance with the lease agreement, the authority is, therefore, issuing you a 30 days’ notice to rectify this failure from the date of receipt of this letter,” he stated.

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