How barge business is brewing ‘cold war’ at Lagos ports

For years, stakeholders in Nigeria’s maritime sector advocated an inter-modal means of cargo evacuation as a panacea to the perennial Apapa gridlock. However, the advent of barges at the ports is gradually brewing a cold war between two sets of operators, writes TOLA ADENUBI.

For years, the Apapa gridlock made a mockery of cargo evacuation at Nigeria’s busiest ports of Apapa and Tin-Can ports in Lagos. Cargoes remained trapped inside the ports all because the ports then relied heavily on one sole means of cargo evacuation, road haulage. The rail which should ordinarily have provided an alternative means of cargo evacuation for cargo owners, lacked adequate capacity to freight the volumes of cargoes trapped inside the ports. With terminal operators running very low on yard space, the Nigerian Ports Authority (NPA) looked towards the lagoon, and mid-wifed the entry of private barge operators into the cargo evacuation processes at the Lagos ports.

With full commencement of private barge operations at the ports in Lagos in early 2019, some form of succor came for terminal operators who needed yard space to reap optimally from managing the port terminals. However, a few months into barge operations at the ports, issues of containers falling into the Lagos lagoon from barges became rampant, and the need to tighten regulatory framework became inevitable.

In a bid to avoid an all-comers arrangement in the barge business, the NPA, in June 2020, issued operational licenses to barge operators who were interested in evacuating cargoes via the waterways from Nigerian ports terminals.

Confirming the development, Adams Jatto, General Manager, Corporate and Strategic Communication of the NPA said that the issuance of operational licenses to barge operators was for operators that wanted to remain in business. Jatto also said that the fee for the issuance of barging licenses remained N100,000, adding that operators must back up their application with a bank bond of N50 million.

With the environment becoming more conducive for barge business, operators came under an umbrella body called the Barge Operators Association of Nigeria (BOAN) to protect their interest while also ensuring members keep to rules and regulations spelt out by the NPA.

By mid 2020, cargo evacuation by barges was thriving at Nigeria’s seaports. Many cargoes were getting evacuated from the port terminals by barge operators. The rapidity of the cargo evacuation via barges led to the rise in the cost of moving a cargo by barge. While some operators charged N150,000, others charged N200,000.

New players

With barge operation becoming more lucrative and juicy, some terminal operators dabbled into ownership of barges. This set of terminal operators, who hitherto had no business in how containers are taken out of their terminals, bought barges and took over the business from private barge operators.

Notable among the terminal operators that bought barges were Port & Cargo Handling Services (P&CHS), operators of the Terminal C at the Tin-Can Island port and the Port and Terminal Multiservices Limited (PTML), operator of the leading Roll-On-Roll-Off terminal also at Tin-Can Island port.

For some workers of these terminal operators who ventured into barge operation, the need to enforce professionalism on the barge business necessitated their entry into the business. In the words of a P&CHS worker who begged not to have his name in print as he is not authorised to speak on the matter: “When we noticed that many of the barge operators were trying to cut corners as regards the maintenance and types of barges that they bring to our terminals, it became apparent for the management of P&CHS to acquire barges.

“At a point, there were reports of containers falling off from barges into the lagoon. The operation of the private barge operators was not properly regulated. It became an all-comers arrangement, and the private barge operators were still slamming huge charges on cargo owners despite using substandard barges. That is why P&CHS decided to invest in barges.”

Findings by the Nigerian Tribune revealed that at the PTML Terminal, barges owned by the terminal operator  were seen transferring cargoes between the main terminal and the off dock terminal at Mile 2, a distance of approximately  two nautical miles, with each barges voyage lasting just 30 minutes.

Aggrieved old players

For many of the private barge operators, the quest to acquire barges by some of the terminal operators is down to greed and selfishness. In the words of the President of BOAN, Mr. Kelikume Edeme, “Ownership of barges by terminal operators is driving private barge operators out of business.”

When asked if terminal operators waded into the business because they felt barge operators were charging too much from cargo owners, the BOAN President stated that, “the charges for moving import or export cargoes vary depending on the terminal operators, barge operator and the kind of service being rendered.

“Having said this, we need to note that there are huge costs of operation for barge operators. Barge operators pay the terminals.  Operators have to engage barges and fuel them, and they have to pay for cranes and trucks and so many more. In barge operation, our rates are market-driven, so no operator is exploiting any cargo owner at the ports.

“The challenges for private barge operators are basically the waiting time at the port terminals. Sometimes you move your barge to the terminals and you can spend four days, and you are paying daily cost for this equipment that you hired or owned; so who pays for the downtime?”

Also speaking on the development, another barge operator who preferred not to have his name in print, stated that, “We started the barge business, and opened everybody’s eyes to the juicy aspect of the business. Now, some terminal operators have started acquiring barges, thereby driving us out of business.

“Should a terminal operator go into barge operation? The agreement signed between the NPA and the terminal operators in 2006 during the port reform does not include delving into barging. It is important that the NPA looks into this emerging trend.

“No wonder when we take our barges to their terminals, they delay us for four or five days before they start loading the barges. All this while, some of them (terminal operators) were already contemplating venturing into the barge business. The NPA should revisit the port reform agreement and let’s see if barge operations were part of what was signed back then in 2006.”

Regulatory intervention

For the NPA, the need to implement efficiency at the various port terminals could be a driving factor behind the acquisition of barges by some terminal operators.

Speaking on the development, the Assistant General Manager, Corporate & Strategic Communications of the NPA, Ibrahim Nasiru explained that no port terminal operator would want to have inefficiency at their  port terminals.

In his words, “I cannot talk on the port agreement of 2006, whether it allows the terminal operators to delve into barge operation or not, but I know that no port terminal operator would want to have inefficiency at his or her port terminals.

“Let’s look at it from this angle, when the port agreement was signed in 2006, did anybody envisage that a problem like the Apapa gridlock would come to haunt our ports? Nobody envisaged a problem like the Apapa gridlock in 2006 during the port reform signing agreement. Moreso, you need not be surprised that there is no clause in the port agreement talking about terminal operators operating or not operating barges in their terminals.

“So, if the port agreement is silent on who owns or runs barge operations at the ports, then people should not raise eyebrows over terminal operators going into barge operations. These people want efficiency at their port terminals, and most will do anything to ensure that their port terminals are efficient.

“So, it will be difficult for third parties to stop a terminal operator from ensuring that there is efficiency at their port terminals. I will get back to you on what the Port reform agreement of 2006 says on this issue.”

However, the NPA Acting Spokesman did not get back to the Nigerian Tribune as of the time of filing in this report.

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