Not long ago, the Infrastructure Concession Regulatory Commission (ICRC) said it will soon complete the Financial Due Diligence (FDD) for the $3.9 billion Warri deep seaport. The Director, Transport Infrastructure of the Commission, Mr. Emmanuel Onwordi, disclosed this while inspecting the Lagos-Ibadan standard gauge rail project. He explained that the Warri deep seaport offer letter had been drawn, and was now awaiting the approval of the Federal Executive Council (FEC). He added, “Hopefully, when the necessary and detailed studies are completed, and the FDD rounded up, then we can attain financial close where the contractor can draw down cash for the project.” He said the concessionaire for the port is the CRCCI of China.
Considering the vigour with which this project is being pursued, one can safely say that everything about the project would have been concluded, and money released for the commencement of construction work on the seaport, had FEC been in place. There appears to be urgency to the project as Mr. Onwordi said that “the Itakpe-Abuja rail contract entails that the Warri deep seaport must be operational.”
As a matter of fact, the first time maritime industry stakeholders heard about the Warri deep seaport project was at the dying minutes of the first term of President Buhari’s administration, when his former Minister of Transportation, Rotimi Amaechi, disclosed that the Federal Executive Council had approved $3.9 billion for the construction of the deep seaport. He said this so tersely, without giving details of the approval or the rationale for the new port.
Naturally, maritime stakeholders were taken aback at this disclosure. This is because, as we pointed out in an earlier editorial, Warri already has two port terminals –Old Warri Port and New Warri Port. The Old Warri Port, which had been inactive for several years, has just been refurbished, equipped and handed over to a concessionaire, Ocean & Cargo Services Limited, in February this year. The New Warri Port is under the control of Julius Berger.
These two port terminals are struggling for patronage, since all shipping activities are concentrated outside the area. Business activities at the ports are relatively low. In the light of this, stakeholders were, therefore, surprised when the federal government announced that a new port was to be built in Warri. And now the reality of the new port has been authenticated by ICRC, which also expressed urgency for the commencement and completion of the port project.
Maritime stakeholders are really worried because there is an existing port in Warri that is largely under-utilized. Government had just spent a huge sum of money to refurbish and equip it. The channel to the port which had been a problem had also been dredged. With a new concessionaire, one is expecting business to start booming at the port, only for government to start building another port in Warri.
More worrisome is that this new deep seaport is being built despite the recent move by the Nigerian Ports Authority (NPA) to produce a new port masterplan for the country which will point the way forward for the establishment of new ports in the country. Last June, the managing director of NPA, Hadiza Bala-Usman, while reacting to fallouts from the cancellation of the Badagry deep seaport project said: “Now we are working on re-awarding the contract. I just gave the go-ahead for the engagement of another consultant that will do the Port Master Plan. The master plan will allow us to know where ports should be deployed in the country in-view of environmental issues, in view of commercial and financial liabilities.”
Also in February 2017, the NPA managing director made it clear that the Port Authority would unfold a 25-year Port Master Plan that will provide a clear overview of the entire port system which is vital for guided port development. And only recently, the Authority published the Expression of Interest for the Provision of Consultancy Services for the 25-year Port Master Plan.
Maritime industry operators have been clamouring for a port master plan which will provide holistic road map for sustainable seaport development in the country.
Even the ICRC in 2016 requested the NPA to develop a port master plan as part of a holistic approach in tackling the challenges in the nation’s seaports.
In view of the way and manner the new Warri deep seaport is being pursued, we are constrained to ask, if NPA that is supposed to be the landlord and controller of ports in Nigeria was part of the conception and execution of the Warri deep seaport project. When was the feasibility for the project done? When was the bid process that threw up the CRCCI of China as the concessionaire done?
As watchdogs of the maritime industry, we must not fail to point out that there is something uncanny about this project. The approval of a whopping $3.9 billion to construct a deep seaport that had never been on the table, and which is to be handed over to a Chinese concessionaire really rankles. Other deep seaports that are being developed in the country, such as the Lekki deep Seaport, Ibaka deep Seaport and the suspended Badagry deep Seaport, are taking time and due processes to execute.
Moreover, they all are being developed through private-public partnerships (PPP) which is the modern trend in port development and other gigantic projects. Private investors bring in money to develop the seaport. But in this case, what we hear is that government had earmarked $3.9 billion for the development of Warri deep seaport, and it has already been concessioned to a Chinese firm. The whole thing sounds preposterous.
While the government pursues this project with reckless fervor, we must also point out the security implication of handing over a new deep seaport in the Niger Delta to a Chinese firm. The activities of the Chinese in Nigeria’s import and export business, as well as their apparent lack of scruples in business dealings makes one afraid of such an undertaking.
We advise the federal government to exercise caution as regards this port project, while we call on the national assembly to examine the project with the view to advising the executive accordingly.
Looking at the whole scenario, our word remains caution.
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