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Afolabi, Folarin, Sarumi proffer solutions to rising port costs

Dr. Taiwo Afolabi, Group Executive Vice Chairman, SIFAX Group, a multinational corporation with diverse interests in Maritime, Aviation, Haulage & Logistics, Oil & Gas and Hospitality, and other maritime experts have proffered solutions to address the challenge of rising port costs.

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These solutions were identified at the third edition of the Taiwo Afolabi Annual Maritime Conference which was held in honour of Dr. Taiwo Afolabi, Group Executive Vice-Chairman, SIFAX Group, in collaboration with The Maritime Forum, University of Lagos and SIFAX Group.

Otunba Kunle Folarin, Chairman, Nigerian Ports Consultative Council, who delivered the keynote address titled: Port Costs and Port Charges: Issues in the Port Reform Policy” noted that a typical shipping company debit note in Nigeria contains nine different charges which includes- shipping line/agencies charge, container cleaning/maintenance, container deposit, MOWCA charge, NIMASA sea protection levy, MOWCA Fee, freight levy, document release, demurrage charges, NIPOST Stamp Tax and Value Added Tax (VAT). He further explained that disputed charges between the Nigerian Ports Authority and shipping companies include- provision billing, under declaration of weight and volume, excessive extra service charges between NPA and Terminal operators, throughput charges, royalty, lease fees, use of foreign currency in computing charges, berthing fees.

 
To curb the effects of these charges on the port system, Folarin submitted that there must be a deliberate government policy to reduce Customs duties and taxes and that the revenue target placed on the Nigerian Customs Service Commands should be discontinued to reduce port cost and charges, the setting up of an effective and efficient single window platform and regulation of the port and shipping sector to include both service and costs, port infrastructure development especially in port environment and common user areas.

 
He also advocated the establishment of a port community system as a framework for stakeholder dialogue to improve service quality and reduce costs and the encouragement of Public-Private partnership in port business, investment in modern facilities and IT enablers and provision of good quality human services.

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“The issue of rising port costs and charges which has soared unabatedly can be solved if political will which includes the implementation of all agreed process and terms without delay and transparency is entrenched. The landlord model must be administered in the very technical, ethical and objective structure such that concessionaires obligations are not to replace the responsibilities of the port authority and including an inclusive port reform strategy.
In his opening remarks, Chief Adebayo Sarumi, former Managing Director of NPA and the Chairman of the occasion, explained that the regulatory agencies should formulate policies that will be beneficial to every player in the maritime sector.
He said: “To curb the rising port costs and charges, operators should determine appropriate cost of services in the maritime sector. This is because, at present, terminal operators are going through a tough time meeting up with their lessee obligation due to a volatile exchange rate order between the Naira and the Dollars. The private sector should be allowed to run the port because the government is not adequately equipped to run it.”

 
Dr. Taiwo Afolabi, Group Executive Vice Chairman, SIFAX Group, in his own speech highlighted that there is a need for the regulatory authorities to harmonise and balance the conflicting viewpoints in order to satisfy all who do business in the maritime sector. “I am very hopeful that a suitable framework for determining the appropriate costs of services in the Nigerian port system will be developed very soon without making our ports unfriendly to users either internally or within the sub-region”, he said.