Calabar Port has been disadvantaged with shallow draft channel for several years, while shipping lines shy away from the seaport. In this interview with News Diet, the Managing Director, ECM Terminals, Mr. Adedayo Balogun harps on some viable ways for the Nigerian Ports Authority (NPA) to attract liners to the troubled seaport. Excerpts:
What are the challenges you have been facing at Calabar port as a terminal operator?
The most critical challenge is the draft of the channel. Like I have always said, shipping has evolved. It’s about economies of scale of size, so the industry dynamics have evolved towards bigger tonnages which requires deeper draft. Today, Calabar is seriously disadvantaged with 5.4 meters low draft and 6.4 meters at high tide. That is the most critical limitation facing the development of the port. In the entire region, Calabar has the lowest draft, which makes it less competitive. So, it is a big challenge.
The other challenge is the road network out of Calabar, it makes evacuation of cargoes a lot more expensive than what is obtainable in sister ports. For us, we believe that there should be collaboration between the Federal Ministry of Transport and Federal Ministry of Works in looking at these challenges of road network, especially in areas where ports are located, because a port by its nature is a distribution network for goods. This can only be optimized if the road network complements the port infrastructure.
Recently, there were complaints about lack of tugboats that are expected to tow vessels into the port. Has this issue been addressed?
With the commitment of NPA, and with the launching of one tugboat recently, I think there is a genuine commitment on the part of NPA to actually resolve the issue of adequacy of tugboats in the Calabar water channel.
How is the security situation at Calabar port?
Calabar has always been on security level one, over the past one decade and so it has remained, which means it is relatively safe. Calabar is the host to the headquarters of the Eastern Naval Command and that also is a good complement. There have also been conscious efforts on the side of the various authorities to ensure that Calabar channel remains safe.
Ecomarine Terminals (ECM) has recorded another landmark by berthing such huge vessel bringing in 240 gas-powered trucks. What magic is behind this feat?
We just take it that it is another effort reflecting our commitment towards changing the narrative about the Calabar port. We have been very consistent in our approach towards ensuring that Calabar port becomes very functional and it’s the preferred choice for importers and other port users.
The recent event is quite remarkable and it is a further attestation to the fact that Calabar port can serve the purpose for which it was established. We give the glory to God and we also use the opportunity to reiterate the need for a collaborative efforts with all stakeholders to ensure that Calabar port remains a functional port.
The Managing Director of NPA, Mohammed Bello-Koko recently talked about reviewing the rebate to encourage more shippers to Calabar port. What is your take on this?
The real issue here is this. You need shipping lines to come before you can talk about the consignees, because in the scheme of things, the consignee is asking for shipping solution to Calabar port. For them, they are ready to bring their cargoes through Calabar, but in the absence of any shipping firm calling Calabar, the options open to the consignee are limited and that is why efforts should be directed at specifically encouraging shipping lines to come, so as to be able to give the consignee the options he deserves as to how and when he wants to receive his cargoes. Today, the option is not available because he is either condemned to receive his cargo from Lagos, Port Harcourt or Warri, even when the cargo is coming to Calabar.
Hasn’t the NPA 10 percent rebate on harbour dues being able to ameliorate this challenge?
The 10 percent rebate is grossly inadequate. That is the problem. If you look at the economics, a liner service that will come will require a specific quantity of cargoes. Let’s say a 350teu capacity vessel is coming to Calabar. This channel cannot take 350teu capacity vessel, so that means that the vessel can only take 75 percent of its capacity, but the economics of 75 percent capacity may not make that voyage profitable. So, that is where the challenge is. On our part, as a concessionaire, we have always given rebates within the limit of what is affordable by us.
What we are saying is that the 10 percent NPA is offering is grossly inadequate and not enough to incentivize the liners to initiate calls to Calabar. What it does is to make the port more expensive for those who come with chattered vessels. Like the general cargo that we received recently, its like a chartered vessel, the cost of calling Calabar is quite high compared to the cost of going to some sister ports. In order to compensate them for paying so much, we had to give concessions from our tariff and that is why there is a need for additional concession from NPA.
Remember that sometime ago, we made efforts to bring in a liner service, we massive concession, but unfortunately the 10 percent was inadequate and insignificant, so was not impactful. We have always emphasized the fact that if you look at the economics, everybody in business has the intention of making efforts to be sustainable. At least, if you cannot make profit, you should break even, the 10 percent is not enough to make the liners break even.
That is why we are imploring NPA that while they are working to undertake the dredging of the channel, they should introduce rebates regime in the interim., because if you are making food for the blind, you need to be whispering, so that he will be aware that they are preparing something for him. Afterall, 30 percent rebate was in existence when NPA was running the port. That is what I find a bit difficult to understand. That challenge that compelled NPA to introduce 30 percent rebate at that time is still there, so on what basis did the Authority decide to suspend the rebate.
What is your message to Nigerian importers that might want to shy away from Calabar port?
Our message to them is to know there is concerted effort towards addressing their shipping needs. Hopefully, with the assurance from the Managing Director of NPA, through collaborative efforts, we believe we will in no distance time have a feeder service that will be calling regularly to Calabar, because the general cargo that came earlier was just a project cargo. It is only there for the period of the project. The real solution is a regular liner service, which makes either weekly or fortnightly calls on a regular basis to Calabar. That is the shipping solution that the port users are yearning for, and we are also using this medium to appeal to NPA to look at a rebate system that can be the basis of attracting shipping lines.