Concession contracts should be extended by 10 years

Michael Urobosa Ubogu is the Chief Executive Officer of  Micura Stevedoring Services. He is also the Vice President, National Association of  Stevedoring Companies (NASC) Western Zone. In this chat with SHIPS & PORTS DAILY’s Obianuju Ozoeze, Ubogu speaks on the effect of the Federal Government’s import policies on stevedoring operations. He also speaks on the benefits of port concession and the need for government to extend the lease contract for terminal operators.

Excerpts.

 

How has it been for stevedores operating in Lagos ports lately?

Lately, there has been a lot of improvement compared to what we use to have in the past one, two years, because there have been a recent adjustment in some of the tariffs like rice and fertilizer.

The patronage is beginning to come up unlike two years when there was no import of those items. You would agree with me that in the past one and half years there have been no rice import in this country, but lately, there have been some rice vessels coming in. You would also agree with me that rice happens to be one of the biggest tonnages that affect our association as stevedoring companies, vis-à-vis their labour who are dockworkers.

For a while that the jobs have not been there it has been affecting our income, but now that the patronage is beginning to pick up, our income is beginning to look up.

 

In the face of the government’s tariff increase on rice, you said that the only way stevedores can survive the resulting dwindled port activities was to diversify. Was this the strategy employed by Micura Stevedoring Services to survive the situation?

Obviously because before the drop and even now that the surge is up, we have also envisaged long- term planning and one of the things we actually did was diversify into equipment leasing, which we have been doing.

We have been servicing companies like BUA and Dangote Salt. We have also gone into packaging; let me use the word outsourcing, but basically in packaging area. We also service wet and dry docks. These are different units in Micura. These are diversifications. So it is not only commensurate to stevedores. In any business, you must look for linkages to bring together for the business entity  to grow. You must look for various means of income and increase your base.  You don’t say because you are a stevedore you have to wait until they give you stevedore jobs. So what if you don’t get a job of stevedore and you have wages to pay, what happens?  My advice then is out of experience because I know what it entails. If you don’ t diversify, if you don’t create multiple streams of income then you are out of business.

 

There has been a lot of outcry against terminal operators floating their own stevedoring companies. What is your position on this?

I believe that any business that is not regulated gives room for infiltration of non- professionalism and that is what NASC is trying to bring in. I have always said that it is an aberration for terminal owners to float stevedoring companies, but I also made my statement clear because I don’t know the statute that established the concession, and you cannot speak on what you don’t know.

If the enabling laws that set up the terminals were very obvious and everybody has access to the laws, then, we will be able to decipher what is wrong and what is right. From my own point of view, looking at it from the business ethic where you cannot be a judge in your own case, if you have a terminal for instance and you also have stevedoring company and dockworkers feel they are not treated fairly, who will they cry to? If they are not treated fairly,  the only place they can go to is the union. Now, the union is not their employers. By right, the stevedoring companies are those who are supposed to employ the labour and the labour will belong to their union. That is how it works.  If the labour is behaving funny, the association of stevedoring companies can talk to the union’s dockworkers branch president to complain and if the stevedoring companies behave funny, the association can take it up with the union, but when a terminal owner for instance decides to have a stevedoring company, it negates the laws and that is why I say that I cannot make criticism on that because I have not set my eyes on the statute that establishes the concession. If you look at a company like ENL, it is doing a lot in terms of throughput time of vessels and the volume of vessels coming into the terminal, they can also  float their own stevedoring company, but they didn’t do that. What they did was to outsource and in a situation like that, there is competition. This will bring out the best in the workers.

If terminal operators create their own stevedoring departments, it cannot be as functional as when they outsource, because it takes a lot of responsibility off them.

 

How do you foresee the port industry come 2020?

Well, it depends on the government, because if you watch, some of the terminal operators have been given five years extension. Take for instance, ABTL. Government gave ABTL direct twenty five years. Dangote was given 20 years, but all other commercial terminals like ENL & JosepDam were  given 10 years each and I think they are in the process of renewing for an additional five years. I believe that if you give somebody a contract for 10 years, given the level of decay in the port as at when the terminals came in, obviously there was a lot of money brought in. They needed to bring in foreign investors and they need to take bank facilities to be able to put the port to the state it is in today. Now, you should also give them time to recoup their investment; because if you look at what is happening in the ports today, NPA still collects its royalties. There is therefore  a need for the terminal operators to be given enough time.

By the year 2020, which is six years from now, the government should be able to take stock of how the ports have fared as a result of the port reforms after 10 years.

The ports have never had it better. The government is supposed to sit down and take stock so that when they are renewing, they will  look at how many years  extension will be given. Certainly, the more years the concessionaires have, the more they will be willing to bring in money. Because, you don’t expect a terminal operator to have its contract extended for just five years, it doesn’t make economic sense. But if the government does the extension in such a way that the terminal operators have an additional 10 years to their contract so that they are running their terminals for like 20 years, so that even if they are spending five billion they know that they are going to recoup it because they have enough time. If you also look at the ports today, if the government goes ahead with the indirect ban on rice and wheat then what is remaining, because fish is already going in extinction, then how will the terminal operators recoup their investments? They should be given enough time to recoup their investment.