Stories by Isaac Anumihe
The controversy between Josepdam Port Services (JPS), a terminal operator in Tin Can Island Port and Honeywell Flour Mills may degenerate into deeper consequences if not resolved timeously.
Josepdam took over the management of the terminal through a concession agreement with the Bureau of Public Enterprises (BPE) in May, 2006. Part of the terms of the agreement include, the reconstruction and expansion of the terminal so that at the end of the concessionary period of 10 years, the terminal would have added value. Unfortunately, however, Josepdam was not able to achieve this task due to a conveyor belt that ran through the terminal to the Honeywell’s factory. All entreaties by Josepdam, BPE and Nigerian Ports Authority (NPA) for Honeywell to remove the conveyor belt, fell on deaf ears.
Following this logjam, the then Vice President, Namadi Sambo, who was the chairman of National Council on Privatisation (NCP), approved an extension of five years for JPS to enable it add value to the terminal. However, JPS has one year out of the five years extension to fulfill the terms of the agreement. This prompted it to write a threat letter to Honeywell to remove the conveyor belt failing which it would pull it down at Honeywell’s cost. Knowing the implication of the letter, Honeywell went to court for protection. While hiding under court’s protection, Honeywell still wrote to the National Assembly, BPE and NPA to intervene in the matter.
According to the Managing Director of Honeywell, Mr Lanre Jayeola, Honeywell has a number of fixed structures and the conveyor belt is one of them. He said that the problem has festered for a long time to the effect that committees were set up to broker peace between the warring parties but it appears that JPS has an unfriendly posture to all the efforts to make peace.
“I will like to say that Honeywell Flour Mills started business in this site through partnership with NPA 21 years ago. And since the commencement of business, we have had very cordial business relationship with NPA. In year 2006, Josepdam took over the management of the port. Expectedly, Honeywell had a number of facilities within the ports, most of which are fixed in nature. I guess this problem became escalated to the point that NPA had to set up a committee between Honeywell and Josepdam. And after a series of deliberations, it was observed that Josepdam took a very unfriendly posture in this matter. Josepdam still insisted that they were not satisfied with the outcome of the meeting.
We started business since year 1993. I will also like to state that Honeywell has never defaulted in the payment of any statutory bills to NPA and we have had extensive transactions in the neighbourhood of $300 million in terms of import duty payment to NPA. Honeywell is contributing positively to the revenue of the Federal Government. We have a workforce of about 1,800 that are directly employed in our company and more than 2,000 other indirect workers. We also have other plans to expand this business. When the idea (to pull down the conveyor belt) was mooted by the Managing Director of Josepdam, initially it started as a very cordial discussion. We gave him all the audiences he needed and when we realized that the objective of the project contradicts the existence of Honeywell in this environment, we then took our position. And of course, as I said, this matter became escalated when Josepdam wrote to us which we considered a threat letter, saying that one of our facilities will be pulled down at our own cost which meant that our facility will be pulled down forcefully and they were going to debit us somehow. Remember they are our ‘ogas’ and they can do this in more than one way to cripple our operation. In order that this does not happen we took a legal step. As I speak today that move is a subject of litigation. So, I don’t think we would like to delve so much into that,” he emphasised.
In his own submission, the Managing Director of JPS, Simon Travers, said that Josepdam Port Services is in no way whatsoever trying to hinder any business activity of Honeywell.
“In fact, we are trying to actively promote their business. Their business is completely unhindered by us because the only single conveyor system within the terminal is working. There is no single effort to hinder their (Honeywell) operations.
“In response to the expansion, we cannot fulfill our development plan without some structures within the terminal that are on our way being pulled down. The structure of Honeywell is a redundant structure that hasn’t been used for several years. It cannot be repaired. It needs to be demolished. This structure in question is of no use to them. I pay for any of the land space that we occupy. We have this agreement with NPA of 5.7 hectares of land which we pay our leases for. We have the right, in accordance with the agreement, to utilise the land and charge that land accordingly. Also, within this premises we also state that any third party, any previous agreement or equipment fixed or movable are to be removed. We are asking our stakeholders to remove equipment that is redundant and that is the case of Honeywell.
This agreement states that we have to develop the terminal. We have resolved the issues of our first 10 years and we have an extension of another five years. We have two years to implement our development plan.
So, we have now one year left of our five-year extension to fulfill our obligations. We are already in breach of our second agreements. To cut the long story short, we are ready to develop,” he said.
Meanwhile, BPE, represented by a Deputy Director of BPE, Abdulaziz Muazu Mafindi, blamed Honeywell for causing encumbrances in the expansion effort of JPS, saying that one-third of the area has been taken by Honeywell’s conveyor belt and other items kept on JPS area.
“As a result of that, the Minister of Transport wrote to his Excellency the former Vice President, Namadi Sambo and Namadi Sambo forwarded that letter to us, directing us to come up with the NCP memo for approval. We acted on that directive sent to us. Anytime we are here for monitoring, that is BPE and NPA, JPS would say that they cannot do anything with the presence of Honeywell in their area. They claim that one-third of the area has been taken over by the conveyor belt and other items kept on their area,” he said.
The House Committee on Privatisation and Commercialisation, led by its chairman, Shodimu Mutiu, who responded to the call by Honeywell to intervene in the crisis, only pleaded with the parties to withdraw the case from court to enable the National Assembly step into the case.
However, both agreed to withdraw the case but the fact remains that the conveyor belt occupies a large chunk of the development area of JPS. How the House will resolve the matter is a subject of conjecture.
Intels lists benefits of Onne OGFZ
The Chief Commercial Officer (CCO) of Intels Nigeria Limited, Mr. Patrick Bird, has said that the Onne Oil and Gas Free Zone offers enormous advantages and incentives to foreign companies to invest in Nigeria.
Speaking in Onne on the sidelines of the “Oil And Gas Free Zones Stakeholders Forum” organised by the Oil and Gas Free Zones Authority (OGFZA), Bird said the Onne Oil and Gas Free Zone creates the environment necessary to support Nigeria’s economic and industrial development.
The stakeholders’ forum was declared open by the Minister of State for Industry, Trade and Investment, Hajia Aisha Abubakar.
According to Bird, Intels, along with the government of Nigeria, developed the zone to provide an oil service centre for onshore and offshore operations while providing the West African and greater sub-saharan oil and gas industry easy access and duty-free distribution facilities.
The Intels CCO enumerated some of the benefits of the Onne Oil and Gas Free Zone, which houses 170 companies, to include 100 per cent repatriation of capital investment, full remittance of profits and dividends, zero customs tariffs on exports and non-requirement of import or export licences.
He also said that all goods manufactured in the Free Zone can be sold in the Nigerian market.
“The Onne Oil and Gas Free Zone helps Nigeria maximize its natural resources to attract foreign investments and create employment, enhance the welfare of the people, aid technology transfer and the overall economic development of the country,” he said, adding that the success of the Onne Oil and Gas Free Zone has led to the creation of similar zones in Warri and Lagos.
Bird also commended the Oil and Gas Free Zones Authority (OGFZA) for hosting the stakeholders’ forum, which he said will deepen investments in the Free Zone.
The Managing Director of OGFZA, Mr. Umana Okon Umana, said the stakeholders’ forum provides an opportunity to introduce the agency’s new leadership to stakeholders “and show them the way in which we intend to work together to recreate the OGFZA and rebuild prosperity for all in successful partnerships between government and private investors in the Free Zones.
“The path of the new OGFZA is well laid out in our roadmap which we are unveiling today, along with our marketing brochure to guide existing and potential investors to the array of incentives available in our free zones,” he said.
“The Roadmap is a product of our vision to be the premier investment promotion agency of government by facilitating the establishment of businesses in the Oil and Gas Free Zones with the creation of an enabling environment for investment,” Umana said.
He assured that OGFZA will improve the ease of doing business and overall service delivery to investors in line with global best practices.
“We will make the Free Zones the first ports of call for investors who are looking for the best opportunities in Africa, to either expand their existing businesses or start new ventures.
“We are thus at the threshold of a new future that will take the continuing support of government and the commitment of stakeholders to build,” Umana added.
Other dignitaries at the event include the Chairman, Senate Committee on Industry, Trade and Investment, Senator Fatima Raji-Rasaki; the Minister of Transportation, Mr. Rotimi Amaechi represented by the Executive Secretary of Nigerian Shippers’ Council, Mr. Hassan Bello; the former Chairman of OGFZA, Chief Chris Asoluka; Managing Director of Nigerian Ports Authority (NPA), Ms Hadiza Bala Usman represented by the Executive Director, Dr. Sokonte Davies and representatives of various government agencies.
Group kicks against transfer of containers to Ikorodu terminal
An importer and President of the Nigerian Importers Integrity Association (NIIA), Godwin Onyekazi, has said that the nation’s seaports are operating well below capacity and should not transfer long-standing (overtime) containers to offdock facilities especially the Ikorodu Lighter Terminal (IKLT) in Lagos.
Speaking against the backdrop of clamour by some clearing agents at Ikorodu for the Nigerian Ports Authority (NPA) to transfer long-standing containers from the main port to IKLT, Onyekazi said such transfer is unnecessary since there is “ample space in the main ports”.
“Congestion in the terminals has always been cited as the reason for transfer of containers but the present economic downturn has resulted in less than 40 per cent yard occupancy for most terminal operators; effectively undermining the reason to transfer overtime cargo to Ikorodu,” he said.
The NIIA President said the maritime sector suffered a huge blow in 2016 with ever-increasing foreign exchange rates and a sharp decline in cargo volume.
According to him, “businesses, banks and social institutions surrounding the ports have closed down as an extension of the reduction in business faced by the ports.
“A recent statement by the Senate in November 2016 highlighted the fact that the containers that have already been transferred to the Ikorodu Lighter Terminal have been abandoned with goods worth billions of naira rotting away daily; alluding to the fact that inadequate maintenance measures exist for the containers there. Therefore, moving even more containers will result in a sharper decline in the condition of containers and cargo, and lead to wastage,” he said, adding that moving overtime containers can also be seen as a means to boycott terminal operational procedures as owners of the containers will like to avoid paying their accrued charges.
This, he argues, “undermines the integrity of terminal operators’ authority and processes leading to complete loss of revenue to terminal operators despite handling costs incurred and fulfilled financial obligations to the government over the years on such containers.”
He said the bid to transfer overtime cargo to Ikorodu Light Terminal will only result in huge additional cost burden to government given that the logistics cost of moving the containers from various terminals to Ikorodu will be borne by NPA.
“This move will result in additional handling of containers which comes with increased cost of doing business for terminal operators; as well as likely claims from damages from handling during such a transfer.
“There exists also the risk of loss of cargo to the consignee/importer due to allegations of diversion of cargo in transit from previous transfers and pilfering due to insecurity at Ikorodu terminal.
“The extra cost to be incurred to carry out the transfer can be avoided, especially in times like these when all sectors should be focused on saving, and not wasting public funds.
“Combined with the recession, this move will only serve to compound the woes of the already suffering maritime sector; it will not bring additional business or progress whatsoever,” he said.
Onyekazi added that the Nigeria Customs Service (NCS) is more certain of collecting appropriate import duties on the containers at the main ports