Port concession: NPA sets November deadline to review Guaranteed Minimum Tonnage

Hadiza Bala Usman - NPA
The Nigerian Ports Authority (NPA) and private terminal operators at the nation’s seaports have set November 28, 2018 as deadline to review the knotty issue of Guaranteed Minimum Tonnage (GMT) contained in the 2006 Port Concession Agreement.

GMT is the projected minimum volume of cargo terminal operators are expected to handle per annum, which would form the basis for the payment of agreed fees and levies to the Federal Government through NPA.

The General Manager, Abuja Liaison Office of NPA, Kabir Dauda disclosed in Abuja recently during a public hearing by the House of Representatives Committee on Ports, Harbours and Waterways that a committee made of relevant stakeholders has been set up to review the GMT clause.

Dauda told the lawmakers that the GMT clause in the Port Concession Agreement is long overdue for review due to prevailing economic realities.

Also speaking on the issue, the acting Director-General, Infrastructure Concession Regulatory Commission (ICRC), Chidi Izuwah, explained that the GMT was an “offer” by terminal operators to handle 90% of the projected cargo throughput at their assigned terminals.

He however said that the offer has become due for review because many challenges facing terminal operators today were not envisaged when the concession agreement was signed 12 years ago.

He said, “These were offers and it states clearly that the lessee guaranties to handle at least 90 percent of projected cargo throughput as provided in its technical proposal.

“The truth of the matter is that these things were signed more than 10 years ago and we are not soothsayers. Our economy has faced challenges, so what we did was suggest to NPA that it is time to review this in line with present day challenges.

“So there is an inter-agency committee that has been set up and that committee is working very hard, looking at the economic variables and will make decisions together with the concessionaires in the best interest of the country.”

Izuwah said there was a need for government to fashion economic policies that will grow the nation’s economy and attract more cargoes to the port.

Several stakeholders have called for the review of the GMT.

Chairman, Seaport Terminal Operators Association of Nigeria (STOAN), Princess Vicky Haastrup recently said that a downward review of the GMT was imperative to reflect the current situation of the Nigerian economy.

According to her, due to the policy summersault of the Federal Government, most of the dynamics that informed the projections for GMT have changed significantly.

She said, “We look forward to a downward review of the GMT because most of the cargo that we put in our technical papers that were submitted to the government in the course of the programme and which we were handling then have currently been banned by the government.”

The STOAN Chairman noted that the importation of certain products have been banned after the ports concession exercise.

Most terminals have been operating at less than 50% capacity since 2015 largely due to government policies, which have fuelled the diversion of goods to the ports of neighbouring countries.