Nigeria's leading finance and market intelligence news report.

Apapa gridlock takes toll on over N200bn investment at ports – report

Apapa gridlock

Terminal operators at the nation’s seaports are now concerned about the dire implications of the persistent gridlock that has taken toll on the over N200 billion investment at the ports, the 2018 Nigerian Logistics and Supply Chain Report, has said.

According to the report, terminal operators are now groaning and complaining for not being able to meet their Guarantee Minimum Tonnage (GMT), on which their payments are benchmarked.

Precisely, terminal operators, clearing agents, importers have continued to suffer untold hardship due to the deplorable condition of the port access roads and the attendant traffic gridlock that have characterised the routes.

Confirming, the Lagos Chamber of Commerce and Industry (LCCI) in its maritime report stated that about 5,000 trucks seek access into Apapa and Tin-Can Island Ports in Lagos on daily basis. LCCI stated that these trucks have continued to plunder port environment owing to the fact that the access road to the ports were originally meant to accommodate only 1,500 trucks.

Meanwhile, Nigerian Logistics and Supply Chain Report said that due to gridlock, the cost of transportation from Apapa has increased by about 400 percent. For instance, movement of consignment from Apapa to Trade Fair Complex in Lagos, which used to be between N80,000 – N120,000 for 20 feet and 40 feet containers respectively, is now between N550,000 – N600,000.    

“Seaport Terminal Operators Association of Nigeria (STOAN) estimated that the nation is losing N20 billion daily to the avoidable traffic situation,” the report said.     

Vicky Haastrup, chairman of STOAN, was reported to have said in an interview that terminal operators are finding it extremely difficult because the dollar generated from services rendered was not enough to pay the royalty and lease fees, which are paid in dollar, and it has also becomes difficult to meet their dollar obligation to the Nigerian Ports Authority (NPA).

Haastrup, who said concession agreement had specific things the concessionaires are required to do in terms of port development, assured that all the terminal operators are fulfilling those areas of the concession agreement.

“I do not know of any terminal operator that has not done that. I think most of us have done much more than that. So, we have an agreement that states exactly what terminals operators are expected to do and I think, we have done far above that,” she added.

BusinessDay understands that concessionaires invested over $475 million (N76 billion) on acquisition of modern cargo handling equipment and $450 million (N72 billion) on terminal development from 2006 till 2013.

The investment started in 2006, when the port reform programme was executed and cargo handling operations removed from the functions of the Nigerian Ports Authority (NPA) and handed over to private companies.

Though, most of the port terminal owners have made more investment in acquisition of additional cargo handling equipment, training of personnel and terminal development between 2013 till date, but the persistent traffic congestion in and out of Apapa port city, has become a serious threat to the existence of these investments.

The traffic also threatens other businesses including the huge sum put into export and import trade by shippers, whose cargoes are trapped in the port for days before shipment or clearing due to delays as a result of traffic.


Amaka Anagor-Ewuzie

Leave A Reply

Your email address will not be published.