‘Badagry port will check diversion of Nigeria-bound goods to Cotonou’

APM Terminals Apapa Limited, operator of the largest container terminal in sub-Sahara Africa – the Apapa Container Terminal – has no doubt redefined port operation in Nigeria. With an investment of US$200 million in new equipment and upgrades at Apapa since 2006, APM Terminals has eliminated the vessel waiting times of up to 40 days common in 2006 as yard expansions and other improvements have been implemented, raising productivity from 6 moves per hour to the current average of 24 moves per hour. Operational standards at the terminal, according to experts, have reached parity with European facility operations.
APM Terminals Apapa and has announced plans for a further $130 million expenditure over the next three years, including the purchase of eight new mobile harbor cranes and 13 Rubber-Tire Gantry Cranes (RTGs), which will increase annual throughput capacity to one million TEUs. The terminal is the largest mobile crane-operated facility in West Africa with nine, and one of the only facilities in the region able to accommodate the new 4,500 TEU capacity West Africa-Max (Wafmax) vessels now entering into West African service.
Despite all these, the leading terminal operator has announced an ambitious plan to build a mega deep seaport in Badagry.
In this interview with SHIPS & PORTS DAILY, Managing Director of APM Terminals Apapa, Mr. Dallas Hampton, explains the rationale behind Badagry among other issues.
Excerpt.

The Badagry mega port project sounds massive. What informed your decision?
There are a number of important factors which range from the connection of the lane of that area to its marine side. If you look at Badagry, it is a traditional area for vessels to berth outside the Lagos area. It also has other advantages in relation to water flow and navigation. We believe that it is a good location for port because its close range to Seme border will help in bringing back the Nigerian billed cargoes, which was lost to Cotonu. If you look at the land side, the port is located just after the termination of the rebuilding of the lane. Also, behind the port is plenty of lanes available and the issue of cargo movement is not going to be a problem because that has been taken care of by the 10-lane Lagos-Badagry Expressway construction that Lagos State government is currently undertaking.
If we look at the Lagos State Government plans for road construction in the future, you will find out that Julius Berger is almost completing the first out of the three sets of road that will go, if not to Badagry, but very close to the port location, so there is a lot of development going on in the Badagry axis. So the location is good from the lane side to the road access and it also has a lot of the potentials because of its closeness to Cotonu border where cargo can be taken from Lagos to other neighbouring countries.
The depth of water in Apapa port is 13.5 metres and that it the maximum design for Apapa port while other ports have lower depth, but APM Terminals has the deepest water of 13.5 metres. And, we are looking at having a water depth of 16 metres at the Badagry port but we are going to start with 14.5 meters in the first phase before dredging further to get to 16 metres draught.

Your company is currently one of the largest port terminal operators in Africa, especially in West Africa where your terminal network includes nine facilities in eight West Africa countries. Where do you place the Nigerian market in all of these? 
I think that we have to say that the Nigerian market is the largest market in the whole of West African given the size of its population which is more than those of the other West African countries. Clearly, it is a very large market for import and export so if you are looking at the options of building a port, perhaps the port is not only to serve Nigerian market but to also serve as a point of transhipment to other West African countries. I will say that the best location is Nigeria and the country is the number one location to consider for the construction of a new port.

What do you consider to be the economic benefits of the Badagry port project?
The construction of Badagry port comes with many advantages. For example, having an efficient port operation that will reduce the cost of bringing goods in and out of the country for importers and it will also improve the efficiency of the logistics chains for export to other countries. I think that the port itself has a potential for creating a good number of employment for Nigerians because the port facility will be large enough to handle cargoes destined for other West African countries.
It is very difficult to say how many jobs will be created from construction to operational stage of the project. In the construction stage, I am not an expert in construction so it will be a little bit difficult to say that if we are looking at having a container terminal that will handle about 1.4 million TEUs, which will likely double over time, I think you will need to double our staff capacity from what we have now at Apapa terminal. This notwithstanding, the port will not only have a container terminal, because there will be a general cargo terminal to be handled by Orlean Invest, dry bulk, liquid bulk terminal and free zone. The port is going to be a very large port that will probably replicate the current capacity in Lagos because there is need for new port development to probably relief the traffic in Lagos. It does not mean that it will take over from Lagos but will have the potentials for the growing market not only for Nigeria alone but to cater for the West African market.

When will the port to commence operation?
For now, we are a little bit dependent on finalizing arrangement with the government authorities involved. Once that is done and necessary approvals are given, before the end of 2013 we hope to commence the construction of the first phase. And we are looking at starting operation in 2016.

As a major port operator under the Federal Government’s port concession agreement, what has been your experience in the past six years of operating in Africa’s busiest sea port?
There have been a good number of experiences for our company. In the case of Apapa, it was not a green field port because there was an existing terminal that we redeveloped. It was quite challenging because there were initial problems in relation to the depth of water available for vessels to come into the port. And of course there were other challenges on the logistics and maritime side. But I am happy to say that NPA has paid attention to those issues in the last few years and there has been an enormous improvement in the depth of water such that larger vessels are now calling the port. I think that it has generally been positive and we can say that government agencies such as NPA have been particularly helpful in the last few years by trying to overcome some of the problems in the port. As I mentioned earlier, if you look at 2012 and the number of vessels handled, it can probably be the first year since 2006 that we are having no congestion because that was the typical situation when we started. We used to have vessels waiting to come to berth but now there is no significant waiting time and trucks are being turned around in the terminal at a very significant way but the dwell time remains high. Though, we hope it will come down because we have sufficient capacity much of which has been as a result of investment made by APM Terminals and some contribution of the Federal Government towards making the port very efficient but there is still more to be done.

What have been your major challenges and how have you been able to surmount them?
As I mentioned earlier, our challenges have been the inadequate depth of water in the channels but we have had several discussions with the port authority and there are initiatives to implement dredging process and that is improving. Issues on land side are predominately around trucking and the condition of the road has also been quite challenging. The road in general does not have enough capacity to make traffic flow free around the port for movement of cargo. The remaining challenges are around the issue of excessive physical inspection of containers by the Customs.
In terms of electricity, we are connected to the national grid but the supply has been very erratic. We have to generate our own electricity to run the port and that places significant cost on our operation as well as the people who make use of the terminal. But we have to generate power to keep those containers safe and keep the content in good condition but all of this makes the port expensive.

We aware APM Terminals has been giving back to the society through CSR. Can you talk about what you’ve done?
We have done scholarships for students and also trained engineering students in our facilities. We have also injected a lot of funds into practically rebuilding one of the schools in Apapa among others. Certainly, being a socially responsible company, we will continue to contribute to the community through our way of operation and how we work. One of the strategies for APMT is the safety rule for employee and making sure that the way you come to work is the way you will go home. I think that ensuring safe operation for our employees is very important to being a socially responsible company not only in what we donate but ensuring that our operation contribute to improvement of the society. I think this is what any company that want to do business in Nigeria should be aiming for.