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Shippers Council to stop ‘arbitrary port charges’

Shippers Council to stop ‘arbitrary port charges’

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The Nigeria Shippers’ Council (NSC) is determined to stop arbitrary charges to make the ports attractive for business, The Nation has learnt.

The NSC, sources said, was determined to resolve the problem caused by the concessioning of the seaports to private investors about 13 years ago.

The council was taken to court by terminal operators and shipping companies after the government named it as the port economic regulator. The case is yet to be determined by the Supreme Court.

A senior official of the Federal Ministry of Transport (FMoT) said the council and the ministry were resolute to achieve efficiency at the seaports.

The source said the era of imposing arbitrary charges was over.

The council, it was learnt, is worried that the operators are not increasing charges without following due process. Part of the agreement, the source said, was to call a stakeholders’meeting during which such charges would be discussed and approved before implementation.

The operators and shipping firms, the official alleged, introduced new charges in the past without calling such a meeting.

“These people went to court to challenge the appointment of the NSC as the port economic regulator. Despite the fact that the appointment of the NSC has been gazetted, they are still claiming that there is no law backing its appointment.

“But they have forgotten that the agreement they signed with the ‘NPA was a mere agreement that has no single law of the federation backing it up and they have operated the port now for almost 13 years, without being gazetted not to talk of the law of the National Assembly.

“It was this that prompted the agitation for the appointment of a commercial regulator to oversee the activities of stakeholders, including providers and receivers of shipping services. The freight forwarders had on many occasions gone on strike to protest the action of the service providers in increasing charges and for other deplorable conditions in the system. They had argued that this was so because there was no regulator to check the activities of the terminal operators and shipping companies, most of whom are sister companies of the terminal operators. It was based on this problem that stakeholders applauded the Federal Government when it approved the Shippers’ Council as the economic regulator,” the official said.

Some stakeholders said it was time the government reformed the maritime sector, and reviewed it’s agreement with the operators.

The  Chairman, Ports Consultative Council, Otunba Kunle Folarin, said: “If the port industry truly deserves to be productive, competitive, and earn a hub status in the region, it must reform and stop deluding itself.

”The colossal growth in traffic, environment and empowerment, which we deserve,will forever elude the country unless the entire industry is reformed to meet the performance level of the ports in the sub-region now husbanding Nigeria destination cargo traffic.

“There is much more to do to achieve the objectives of unbundling and creating efficient and competitive ports environment.

“The reforms must start now in an all-inclusive way; it must be total. That is the only way, and that is the way forward,” he said.

Folarin, who was not happy with the situation of the port, said a typical shipping company’s debit note in Nigeria contained at least nine different elements of charges.

These include: shipping line charges, container cleaning, container deposit, Maritime Organisation of West and Central Africa (MOWCA) charge, Nigerian Maritime Administration and Safety Agency (NIMASA) sea protection levy, MOWCA fee, freight levy, document release, demurrage charges, NIPOST stamp tax, and Value Added Tax.

Currently, eight of these charges have generated dispute between the Nigerian Ports Authority (NPA), and the shipping companies, while four are a source of disaffection among importers, exporters and the terminal freight forwarders.

Also, another four charges are being contested among shipping companies, importers, exporters and freight forwarders.

Ports cost is a collective responsibility for both government and the private sector.

Total port cost per a given cargo unit include Customs duty/taxes – 70 per cent, and Ports Terminal Operators – 13 per cent. The Nigerian Ports Authority’s share is negligible (+/-1%) excluding Customs duties, and comprises costs of handling, storage and delivery.

To address the problem, Folarin said there was a need for deliberate government policy to reduce Customs duty and taxes; set up an effective and efficient single window platform; regulate infrastructure development especially in the port environment and common users’ areas.

He emphasised the need for a stakeholders’dialogue, and encourage Public-Private Partnership in ports business, invest in modern facilities, and provide good quality human resources.

The Executive Vice Chairman, Sifax Group, Taiwo Afolabi, said: “We are convinced that these are matters of immediate and practical concerns to every Nigerian, and more so to the regulatory authorities that need to harmonise and balance the conflicting viewpoints to the satisfaction of the stakeholders.

“I recall as an industry player that the exchange rate (Naira to dollar) in Year 2016, for instance, when we became ports concessionaires was between N125 and N131 to a dollar. How much is the exchange rate today?

“In other words, since many of the operations are expected to be discharged to the lessee in dollars, how much naira will be enough today to purchase the required dollars.

“Thirteen  whole years after the historic concession, how do you generate that amount of naira in today’s national economy?

“By what percentage will the cost of service be adjusted upward to reflect the astronomical changes in the foreign exchange regime? So many questions seeking answers,” he said.

Chairman, Seaport Terminal Operators Associations of Nigeria (STOAN), Princess Vicky Haastrup said the operators were not to blame for the astronomical increase.

“Some people are putting all the blames on terminal operators and I feel very disappointed.

“The truth is that leadership is the problem. The government is the problem. I am not talking of this present leadership, the whole thing started from time immemorial. There was no sincerity on the part of government itself.

“If you look at what is happening in Apapa today, there is no enabling environment.

“The operators are losing money. We have invested heavily and what do we get back in return?

“When we took over, dollar was N125, and today it is N362.

‘’NPA is there, Shippers’ Council is also there. What NIMASA charges is one of the highest in the world. Policy summersaults everywhere.

‘’Do we sit well and think deeply before changing policies?

“There are whole lots of government agencies in the ports with a lot of charges, even stamps.

‘’You will see the government going around talking about Ease of Doing Business, are we supporting him? Is government supporting itself?

‘’Ports should be a one-stop shop, but I am sorry we are far from it because there is no sincerity on the part of anyone,” she said.

Bello expressed optimism that the council would deliver on its mandate.

The council, Bello said, was determined to meet the expectations of Nigerians in terms of port operation, efficiency and port charges.

He assured genuine importers that irregularities and arbitrariness in the ports system would be addressed.

The NSC, he assured, would look into the high cost of doing business at the ports, and what was responsible for the diversion of goods meant for ports to neighbouring ports of Cotonou.

The immediate past President, Association of Nigerian Customs Licensed Agents (ANLCA), Prince Olayiwola Shittu, urged the council to review charges imposed on importers.

Shittu noted that numerous charges were being imposed arbitrarily without due consultations among stakeholders, while soliciting for appropriate consideration for the importers/exporters whom are the basis for shipping because they generate cargoes.

The post Shippers Council to stop ‘arbitrary port charges’ appeared first on The Nation Nigeria.

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