Federal Government Renews Leased Port Terminal Agreements Despite Operator Debts and Violations
The Federal Government of Nigeria has reportedly renewed agreements with operators of leased port terminals, disregarding their outstanding debts and violations of terms. The port concession/lease agreements, initiated in 2006, lack legislative backing or a structured regulatory framework to monitor the 26 concessionaires, resulting in unclear regulations.
Many concessionaires have not fulfilled their obligations under the schemes, and these contraventions have been facilitated by unclear regulations. Some operators owe concession fees dating back to 2006 and have failed to develop port infrastructure as stipulated in the contracts. Despite these issues, several lease agreements have been renewed due to pressure from certain forces within the government.
The inter-agency committee responsible for renewal includes representatives from the Bureau of Public Enterprises (BPE), Nigerian Ports Authority (NPA), Infrastructure Concession Regulatory Commission (ICRC), Federal Ministry of Transportation (FMOT), Ministry of Finance, Budget and National Planning, and the Federal Ministry of Justice (FMOJ).
A House of Representatives audit query in August 2022 revealed that 18 terminal operators owed the Federal Government $753 million and N1.61 billion from 2006 to 2019. However, the total indebtedness, excluding 2020 to 2022, was $852.094 million and N1.9 billion, composed of estate rents, lease fees, and throughput charges.
In 2020, despite the indebtedness, the NPA renewed contracts for 21 terminal concessionaires, including companies that had not met their financial obligations or developed the required infrastructure. This has raised concerns about accountability and regulatory oversight in the country’s port operations.
Despite claims of review and scrutiny, the concession agreement document remains shrouded in secrecy, making it difficult for the public to assess its flaws and obligations. Experts suggest that a lack of legislative backing and regulatory enforcement has allowed terminal operators to flout agreements and hindered transparent management of port operations.
While the renewal process has been mired in controversies and political influences, industry stakeholders emphasize the need for transparency, proper regulatory oversight, and adherence to international best practices to ensure the effective and efficient operation of Nigeria’s ports.