26/08/2022
WE ARE WORKING TO MAKE ONITSHA DESTINATION PORT FOR CARGOES - MOGHALU, NIWA MD
By Moses Akaigwe
Nearly 40 years after the Shehu Shagari administration conceived the Onitsha River Port project, a milestone was reached on July 1, 2022, when the Federal Government signed a concession agreement with Universal Elysium Consortium Ltd, thus marking the conclusion of a long process that spanned many years. Two weeks later, on July 16, the port was handed over to the concessionaire by the management of the National Inland Waterways Authority (NIWA).
In this interview with The Sun, the Managing Director, National Inland Waterways Authority, Dr. George Moghalu, spoke on the impact the development would have on the economy, especially in the south-east. He said focus is now on ensuring that Onitsha becomes a port of destination (instead of the present arrangement where cargoes are transloaded on barges at the port in Lagos, Port Harcourt or Warri, and moved to Onitsha through the channels). When the port of destination status is achieved, vessels could now depart ports abroad and sail directly to Onitsha, as well as depart Onitsha with goods to other countries.
*Let us start with the MoU the Federal Government signed recently with the concessionaires on the Onitsha River Port. Give us more details about the sgreement*
It wasn’t just an MoU. It was a handover agreement or concession agreement, because long before I became the NIWA MD, there was a world bank-monitored concessioning process that was considering various unsolicited proposals. Eventually, they arrived at a preferred bidder. So, when I came in, I followed up on what was being done to ensure that it was concluded.
And it was concluded. The concessioning agreements were reached, written and signed. And, then, we handed over the port. As we speak now, it has been formally handed over to the concessionnaire, Universal Elysium.
*Why the concessioning process took so many years*
You see, it is quite a process, and as such you have to ensure that a lot of things are done properly, because you had to follow due process. You have to follow the rules. It is not about bending the rules. It is about following the rules in detail to be sure that what you want to do is in line with universal best practices.
However, I agree with you that a lot of time was spent and that was why, when I came in (as NIWA MD), I put in every effort with my colleagues to get it done. That is why we look at Onitsha River Port concession as a poster boy, because we have other concessioning that are coming up. So, we have learnt quite a lot from the Onitsha experience, and I am sure concessioning the other ports or even other infrastructure, will not take that long like Onitsha did.
*Why concessioning? Is that most viable option?*
If you look at modern business practices today, concessioning is a very good option, because the resources available to government are not as they used to be. So bringing in the private sector partnerships is the way to go now. Then, apart from the fact that you have advantage of proper management, it is to be run as a business. And it reduces pressure on the government.
Don’t forget that these ports were built over two decades, three decades ago and nothing has actually happened. So, we think concessioning is our best option. And that was where government was proceeding.
*Was everything done to ensure that the interests of the parties, including the government; the people, who are the users of the port; and the concessionnaire, are all protected?*
Yes. The people are more of the beneficiaries. And, before we got to this stage, we had done quite a lot of stakeholders engagement. We engaged the private sector, importers associations, chamber of commerce and critical stakeholders in the port business.
If you look at benefits, it is neither for the government, nor the concessionaires, but more for the people because if Onitsha River Port is actively functional and the channels are opened for cargo to move from Lagos to Onitsha, the importers will benefit massively. The local environment will benefit and there will be employment opportunities.
Pressure will be reduced on our roads. I am one of those who believe that we need to open up our river waterways so that we can move cargo by water as we have in most civilised countries. Bulk cargo is moved either by water or by rail. But here, we move 90 percent of bulk cargo by road. And our roads are not designed to carry the weights they are carrying.
If we take a simple analogy and say let’s assume that it is five million containers that come to the country: If those five million containers are going to the south-east where you have more than 60 to 75 percent of these cargoes go, what that translates to is that the number of cargoes, assuming it is five million containers, means that 10 million trailers will be on the road. That is because five million will carry the containerised cargo and then five million will return the empties.
Our roads are not designed to carry this kind of pressure, and they keep damaging our infrastructure.
If we are able to use the water, we will save the resources that we require to build these infrastructure and then convert them to other contending areas of interest for the government to invest their resources, which for now, all of us know, are now limited.
*Was it all about Universal Elysium Consortium, or were there other bidders that showed interest?*
It was not about Universal Elysium Consortium. It was a process. It was a contestable process. A lot of companies contended. Like I said, the World Bank was involved, and they set a standard. And after all the submissions and proposals from various organisations, it was zeroed down to about three or five of them. They (Universal Elysium) were also considered alongside the others and eventually, they emerged as the concessionaires. It is not that Universal Elysium was just appointed.
*Would you say the concession process is concluded, and without litigation?*
I don’t think we have any issues now. The road is clear, because as we speak, the technical partners of Universal Elysium, the Port of Antwerp (in Belgium), are already at Onitsha. Our Area Manager reported to me that they had arrived. For us, the process has started and we are looking forward to the great enthusiasm and expectations to see that the place works. This is because we look at it more, from the point of view that it is a trial run, just like what you want to do first. Then, we can now build on it and continue from there.
*What are concessionaires expected to do? Are they going to make investments?*
They are going to run the port and do a lot of investments. You can’t run a port without expecting to make some reasonable investments, both in terms of making sure the channels are opened, making sure that the port conforms in line with modern developments and technology. There is quite a lot of investments to be made. It is a business. It is an ongoing business and not a one-off thing. The concession is about 30 years and we are expecting to make N23 billion from there. It is not a free donation, but a strictly business investment on the part of the government and Universal Elysium. So everybody will benefit.
*How manufacturers and businessmen in south-east would benefit from concession of Onitsha port.*
We have opened up the economic corridor of the south-east. It is expected that our people will buy in. That was why we engaged the business community; We have talked to the Importers association and the chambers of commerce, because that is a major corridor to move cargo in and out of the south-east. This is because if cargo land in Lagos, they transport them in barges to Port Harcourt and Warri – these are major ports – and then come to Onitsha and other inland ports, using them to discharge the cargo.
A lot of people will be involved. It is a business chain. The import business is a business chain.
For example, if somebody has 20 to 30 containers, 10 containers or one, and the containers arrive in Lagos and they are cleared and moved by barges to Onitsha, it is a major milestone.
For us now, the next stage is to see how we can get Onitsha to be a port of destination. The moment it becomes a port of destination, a lot of advantages will also keep accruing to the project. This is because being a port of destination means that cargo can move directly to Onitsha. Then goods can also move directly from Onitsha out of the country.
*For an importer across the Niger, what port will be the destination for his cargo, for instance, raw materials?*
By the time Onitsha Inland Port becomes a port of destination, consignments can move directly to Onitsha. But then, the size of the ship has to be considered. It is not every ship that can come to a river port. If they are ocean-going vessels, they stop in Lagos or Port Harcourt, Warri or even Calabar port. Then we can transload on barges. But smaller vessels can come straight to Onitsha when it becomes a port of destination.
*What will it take to make Onitsha a port of destination?*
There are processes to make it a port of destruction. And I can assure you that the process has commenced.
*When you describe concession of Onitsha River Port as a test case of poster boy, is it that Oguta, Lokoja and Baro are next?*
Yes, we have Oguta and Lokoja ports that are ongoing. We have Baro port (in Niger state) that has been completed. It is a world class port, and has been completed and commissioned with all the modern equipment you can imagine in place. And we have started receiving unsolicited proposals, asking for concessions for those ports – even the ones that are under construction. So, we are giving all of them consideration. We want to encourage PPP (public private partnership) arrangements by the government. Concessioning of Onitsha has succeeded, and we are going to use it as a model to adapt to other ports. That is why I said Onitsha is our poster boy. And, it is not only ports; there are other businesses, such as concessioning of jetties, waterfronts and others. There are many other projects we are exploring the possibility of using to expand our business scope.
*Personally, how do you feel about the success of the Onitsha Inland Port project?*
It must be very fulfilling.
I feel very excited that God used me. And I give God all the glory. It could have still happened under someone else, but God has positioned me at this point and this time. And I have made myself available to be used to drive the process. So, I feel personally fulfilled and I want the maximum benefit for the people of Nigeria, particularly those from the south-east extraction where the port is located.
*Balancing dry and liquid cargoes, such as petroleum products*
Why not? I have already opened discussions with Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) to move liquid cargo from point A to B, and then discharge it to the nearest required locations. I don’t see why we can’t do that, especially now that the NNPC has become a private company (now called Nigerian National Petroleum Company). We are going to engage them.
*Concerns about policy reversal by new administration*
I agree with you that this fear is there, because I have been confronted with such fears by people, but I have consistently reassured them of our commitment. For example, we have a 30-year agreement that is binding on government for this particular one (Onitsha Inland Port) that we just concluded.
Wherever there is a concession going on, the liabilities and expectations of all sides. are clearly spelt out, and then agreements are signed. Once agreements are signed, it is binding. You cannot wake up in the morning and terminate an agreement that is binding on parties that signed the agreement.
*Why is it that NIWA seems to have misunderstanding with Lagos over control of water ways, more than with other littoral states?*
You mustn’t rule out the fact that Lagos is the maritime capital of this country. But I don’t think those issues are in the front burner now.
Everybody is beginning to understand clearly where their authorities start and where they end. It is very clear. We are a federal agency whose responsibilities are clearly mapped out in the act establishing the agency.
The responsibilities of the state agencies are also mapped out in the laws establishing them within the states. But the truth about it is that these limitations are clear. So it is a matter of understanding how you operate the laws.
But I like I have always said, the important thing is the Nigerian people. How would they benefit.
How do we address our challenges. For me, the sky is too large for all birds to fly. So, we encourage the state agencies and we are willing to collaborate. However, what we will not do is to concede our rights and authority. We are willing to collaborate to the benefits of the people, and that is what we are doing with Lagos, and other states where issues of disagreements on rights, authority and control arises. We discuss them and arrive at required conclusions.
*There exists a commission that resolves disputes over land boundaries between states. In maritime, do you have a similar body?*
We don’t need to have that. It is clear. The laws are very clear as to who controls where and what.
I don’t think we need that. But where there are strong positions, you request for judicial interpretations.
*There have been a number of boat mishaps this year alone. Does it mean that your measures at NIWA to ensure security and safety are not working?*
It is not about the measures not working. It is about following the rules. Statistics have shown that majority, if not all, mishaps that happen in our waterways, happen either in the night or in the early hours of the morning. We have also come to terms with the fact that failure to adhere strictly to guidelines and principles have also caused all those mishaps.
And we have done a lot in getting people to understand. For example, there is a ban that you cannot do night sailing: You cannot take off from any NIWA-controlled jetty at night. We have given circulars to jetties that we don’t control that once it is 6:30pm, no vessel will leave from any registered jetty in the night, and that no jetty should take off in the morning before 6: 30 am. These rules are there.
Again, you cannot enter any jetty without wearing the right life jacket because life jackets expire.
For us to do this, we have been distributing life jackets. We have set up task forces across the states that monitor and ensure these rules are kept. As we speak, we have established nine search-and-rescue stations in this country. We are even in the procurement process of additional three, and we continued doing that. We have procured and released patrol boats to monitor activities in our waterways. We are doing a lot of sensitisation using local radio and TV stations to sensitise our people on the need to follow the rules. Once these rules are followed, the likelihood of accidents will not be there.
At the same time, I plead with the media because sometimes they over-sensationalise issues and create problems for us. The other day, the report was that there was a boat mishap in Niger and 50 passengers died. That was not true. At the end of the day,, 24 drowned and 23 were rescued. We lost one life. Yes, I agree that one life is also very important, but not when you now report that 50 passengers died. By doing so, you create anxiety. The other time in Lagos, they reported that all the 19 passengers died. At the end of the day, only two lost their lives. I am not saying that the two passengers that lost their lives are not important. They are very important and we don’t want that to happen. I appeal that the journalists wait and investigate to get the right facts.
But a lot is being done to ensure our waterways are safe. We are providing all that is required and making sure the boats are standardised. As we speak today, boats are registered electronically. It is not like before. We are doing training for our boat operators and captains. The other day, I was in Badagry to close a training session of 450 boat drivers and we are re-licensing them.
*Whose initiative is the training?*
This is a NIWA initiative. Boat mishap is a challenge and it is not about me now, but NIWA as an institution. It is about our doing well what is expected of us. It is about justifying the confidence of government in establishing the agency.
*Does NUWA generate revenue in the process of organising the training sessions?*
For sure, because licences are paid for. We also subsidise because we want to encourage as many people as possible. The target is not revenue, but about regulating the industry to make sure things are done properly.
