Port concession has increased efficiency, revenue, says Abdullahi

When he was brought back home from London to serve as the Acting Executive Director Finance and Administration of Nigerian Ports Authority (NPA) in December 2011, he almost turned down the offer but as fate would have it; that appointment served as the platform for his eventual appointment as Managing Director/CEO of NPA about six months after.
Habib Abdullahi, 56, is more likely to define his job than be defined by it. He is one man who can best be described as shrewd, confident, hard-working, patriotic, and ingratiating.
Abdullahi hails from Kano State and served in different capacities in the state as Director of Budget, Managing Director of some parastatals and also as First Chairman/Sole Administrator of Kabo Local Government before joining the services of NPA.
Earlier he served as Chief of Staff to the Speaker of the Federal House of Representatives, Abuja.
Abdullahi attended Ahmadu Bello University, Zaria where he bagged his first degree in 1978. He also attended the University of Bath and University of East Anglia all in UK. He obtained a Master’s degree in Public Policy and Management from the Harvard University, USA.
Abdullahi is an Edward Mason Fellow of Harvard Institute of International Development, Harvard University.
In this interview, he speaks on major issues affecting port operation in Nigeria.
Excerpts: 

How has the port reform programme improved government earnings from the ports? 
I think it is multifaceted. There are several ways that one can look at it. If you look at our personnel cost, overhead cost, cost of maintenance and our capital expenditure to a certain extent, they have all gone down tremendously.
If you compare what was happening before and now that the concessionaires have taken over our operational responsibility, our spending on maintenance of equipment has decreased because we have leased the equipment to the concessionaires and they are now better maintained. So look at the overhead cost, personnel costs, all of them have reduced.
Also, efficiency has increased because people are putting in their money into it and it is different from how government runs its own affairs.
If you put in money, you want to make profit. So you have to increase efficiency. Under the government, people show nonchalant attitude to work; but, with the concessionaires, it is easier to discipline people than government. They have put in money and they will not allow their money to go down the drain. So, if you look at the cost side, the efficiency side, things are now better at the port because of increased efficiency.

The Nigerian Ports Authority was accused recently of failure in its contractual agreement with the concessionaires by not being able to provide common user facilities like water, electricity and motorable roads. 
As far as I am concerned, I have not received any formal complaint. For the Independent Power Projects (IPPs), when I went to the Tin-can Port last time, I noticed some people showing interest in the Lagos Ports.
We are processing IPPs in all the ports. The one in Onne has already gone far. I think this is with the Federal Executive Council. It is an open thing, because we want it to be competitive. We want people that have the interest to come in and participate so that they can provide the needed infrastructure at the ports.
I think we are doing something on that. The various water systems at the ports are undergoing rehabilitation. If you go to the port now, you will see that they are being rehabilitated and renovated as contracts have already been signed. Very soon all these things will be addressed.

Are the contractors handling these projects, including the IPPs, Nigerians? How much investment is coming into the projects? 
I can’t remember the exact figure; but most of them are companies with foreign interest. They are Nigeria-based companies.
The one for Onne has reached advanced stage and now with the Federal Executive Council. In fact, it was stepped down because of some urgent matters that are being addressed. I am sure that, in a week or two, it will be sorted out and the contract awarded.

Recently, the National Assembly accused government agencies and parastatals of not remitting part of their income to the Federation Account as statutorily required. How clean is the NPA from this accusation? 
The Nigerian Ports Authority is a self-sustaining organisation. We don’t receive allocation from the Federal Government. We generate our own revenue and then remit to the Federal Government, according to the Fiscal Responsibility Act.
Last year, we remitted N15 billion to the Federation coffers, and I think this is the first time such huge amount was remitted to the Federation Account by the NPA.
This year, we are also trying to see how much we can remit, because it is based on a formula that is already approved by the government. It is based on that, that we make our calculations and remit what we are supposed to remit. I don’t think there is any complaint as far as NPA is concerned.

If you compare the period before port concession and now, will you say Nigeria is gaining, in monetary terms, from the port reform programme? 
To be honest, Nigeria is gaining. I will not want to quantify and say, ‘this is the amount;’ but there is tremendous improvement in efficiency; there is an increase in revenue.
People may not understand why, to some extent, the amount of money that we are generating is not that huge. This is simply because there is a question of amortisation. We are amortising the revenue so that the concessionaires can develop the port; they retain the revenue that is supposed to come into our coffers. There will come a time when the maritime industry, through the Nigerian Ports Authority will be remitting or generating as much as the oil industry in the country. But presently, people don’t know that we are amortising the projects.
The revenue is not coming to us because those people that are working in the port are using our revenue to develop the ports. If we allow the money to come in and out, there are many bureaucratic encumbrances in the system. I think it is better to do that because it has its own benefit. Look at the ports, the way they operate, look at the dredging, look at the draft (depth) of our channels, it has increased considerably. Look at what is happening at the ports, look at the ports efficiency; look at the development in all the ports. Unlike before when we have to generate revenue and the bureaucratic tendencies, you know the red-tapism that are in the system. Now things are better because the concessionaires are developing the ports to increase efficiency. So I will say that Nigeria is gaining.

In what other ways can NPA prove to Nigerians that the country is actually gaining from the port reforms and that efficiency has increased? 
Before the concession, how much did NPA ever remit to the Federation Account; can you remember the amount? I just told you that, last year, we remitted N15 billion to the Federation Account and this year also, we are going to remit something higher than that.
You cannot compare now and then. That is why I said there is reduction in personnel, overhead and other costs. All these are fallouts of the concession. I don’t think we have ever remitted more than N2 billion or N3 billion in the history of the NPA to the Federation Account in any given year before the reform period.
This remittance has contributed to the growth of the national economy, and that is beside the activities that are going on at the ports, their increased efficiency.
Our channels used to be nine metres, and now we have between 13 and 14 metres draft along the channels. All these represent an increase; and, if you want to quantify them into money terms, it is tremendous.

One of your predecessors initiated a 25-year development plan for the Nigerian ports. Are you upholding that initiative? 
I just received the interim report of the 25-year port development plan. It is part of the NPA’s long-term planning.
The idea was conceived a long time ago and it came into fruition during my predecessor’s time. The consultants have submitted their initial report. We are looking at it and then they will produce the final report.
After that, we will look at it, process it accordingly and take it to the Ministry up to the Federal Executive Council so that it can be debated, adjusted and approved for future development.

With the 25-year development plan, what exactly are we aiming at for the ports? 
I don’t want to pre-empt the report. I just told you that I have received the preliminary report and it is going to be an interesting project. We will see how all the future development will be contained in it. We have targets and how best to achieve them.

The Nigerian Ports, especially the Lagos Ports, have been highly industrialised with the emergence of tank farms, and other manufacturing companies, some inside the ports. This is contrary to what is obtainable in developed countries. Why did the government allow these companies to be sited near or inside the ports, which today has no more space for expansion? 
You say it is contrary to what is happening in other ports? Which country would you go and won’t find companies close to the ports? You will find out that there are many industries cited within the ports around the world. It is quite normal, because of economics of scale.
Most industries rely on import and export of raw materials. So, it is better to bring your industry near the gateway to the economy, so that there will be proximity in terms of transport in order to reduce cost.
If you are talking about tank farms, for example, the whole nation is developing very fast and when these things were initially approved, the activities were not as much as they are now today. Now we have realised that the whole projects have been overtaken by different activities.
Now, some ports are coming up. If you look at, let’s say Lagos, the city has eaten up the ports. That is why we have 25-year port development plan so that we can confront all these things. All these are part of our development plan. The tank farms are of great concern to the government and that is why government has banned new tank farms in those areas.



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