3 December
Transport
Rivers
Implementation
Nigerian Ports Authority
03-07-2020 12:21:24
The terminal was concessioned to ensure increased efficiency of port operations, decrease cost of port services to port users, and boost economic activities and accelerate development, among others. It is expected that the concession will bring about improvements to the leased properties, as further described in the development plan handed over to the terminal operators during contract execution.
Real property in the port and certain immovable property affixed to the premises, to make certain improvements to the lease property. Terminal 'A' has a total length of about 650m straight quay. There is no limitation to any vessel calling at Terminal 'A'. The distance from Fairway buoy to Bonny is 17 nautical miles, while Bonny to Port Harcourt is 24 nautical miles.
During the concession term, the lessee is expected to utilize the fixed aassets and such other assets to be added to the lease property for: 1. handling and delivery services for the cargoes, including without limitation stevedoring, loading and unloading of vessels, transporting, sorting, storage and the procurement, and operation and maintenance of equipment for the foregoing; and 2. repair and maintenance of the fixed assets. Other services: 1. warehousing, stuffing and stripping/unstuffing, cleaning and fumigating, consolidation, and procurement, and operation and maintenance of equipment for the foregoing; 2. ship-to-shore handling of supplies for vessels; 3. oversize cargo handling services; 4. terminal handling; 5. inland depot transfers; and 6. all other activities necessary to conduct operations.
The landlord model was selected to ensure that the government retains the right to supervise daily operations at the ports. The model further prescribes certain obligations that must be carried out by the lessor, such as maintenance, repairs, renewals, and replacement of the quay wall and navigational aids on the premises during the concession time. The lessor is also expected to provide certain utilities and facilities to enhance port operations. Such utilities/facilities include electricity power, water supply, tug boats, and repairs and maintenance of access/common user roads.
A pre-bid conference, data room, and physical due diligence were carried out February 7 - 19, 2005. Over time, the Infrastructure Concession Regulatory Commission has also made efforts to meet with stakeholders in the ports during its periodic monitoring visits. The stakeholders include public sector officials, National Assembly members, terminal operators, and port users.
SUMMARY OF STAKEHOLDER ENGAGEMENT ON THE REVIEW OF PORT CONCESSION CONTRACTS
The Commission in May, 2015 recommended the review of the port concession contracts signed by the Nigerian Ports Authority (NPA) in 2005/2006 with Port Terminal Operators in Apapa, Tin-Can Island (Western Ports), Onne, Port-Harcourt, Warri and Calabar Ports (Eastern Ports). The NPA on 2nd March, 2017 informed the Commission that it has initiated the review of the port concession contracts with terminal operators.
The Nigerian Ports Authority set up an Inter- Agency Committee which was inaugurated on 16th May, 2017 following mutual agreement by the parties to review the contracts with the aim of improving on the Management of the port terminals.
The ICRC was nominated as a member of the Committee among other stakeholders (The Federal Ministry of Justice, Bureau of Public Enterprises (BPE) and Federal Ministry of Transportation). Several meetings and interactive sessions were held by the Committee to review the contacts under three thematic areas of – Legal Issues, Administrative Issues and Operational Issues in the contract. The Committee visited all the port terminals in the Eastern and Western parts of the country between 12TH – 15TH December 2017 to carry out an on-the-spot assessment of the terminals and engaged with the operators on the contract review.
The Committee received technical support from the World Bank through its Consultants - (MBTS) which assisted the Inter-Agency Committee on the review exercise.
Current Status
The parties met and negotiated the contract clauses reviewed and other essential issues which were considered during the review exercise. A draft supplemental agreement was prepared by NPA and sent to the Federal Ministry of Justice and the ICRC for review. The ICRC concluded its review of the supplemental contracts in May, 2020 and forwarded its views to NPA for consideration. Some of the issues considered during the review exercise were:
A one-pager was prepared by the ICRC, attached.
3 December
3 January
Inn accordance with the Public Enterprises Act No. 28 of 1999, the NCP along with BPE invited bids
3 June
11 May
Execution of the Concession Agreement
9 August
Commencement of operation after fulfilling initial financial obligations
8 August
Expiry of contract agreement
Redacted PPP Contract attached
| Type of risk | Description | Allocation | Mitigation |
|---|---|---|---|
| Pre-construction risk | Risk associated with project preparation/Permit and approval risk | Public Sector | |
| Construction / Completion | Construction and Renovation of Terminal structures | Private Sector | |
| Cost risk | Cost Overrun | Private Sector | |
| Refinancing risk | Financial Close/Debt servicing/interest repayment | Private Sector | |
| Risk related to change in law, taxes, scope, technical standards, regulatory framework | Project scope, laws, environment, government policies | Public Sector | |
| Exchange rate risk | Fluctuation in country's exchange rate/devaluation/global impact | Public and Private Sectors | |
| Operating risk | Competition, workers action, etc | Private Sector |
Throughput fee at break bulk/multipurpose terminals 2016/2017
Throughput fee rate at Oil and Gas Related Terminals 2016/2017
| Events of Default | Brief description | Termination Payments | Documents |
|---|---|---|---|
| Insolvency | Becomes insolvent | Pay to the Lessor any and all actual costs, expenses, charges, and/or penalties incurred or sustained by the Lessor as a consequence of such termination | |
| Performance Failure | Fails to perform the Operations for 14 consecutive days in an operating year or 60 non consecutive days in a non operating year. | Pay to the Lessor any and all actual costs, expenses, charges, and/or penalties incurred or sustained by the Lessor as a consequence of such termination | |
| Payment default | Fails to pay any amounts due | ||
| Breach of terms | Commits a breach of a material provision of agreement |
| Events of Default | Brief description of events of default | Termination Payments | Documents |
|---|---|---|---|
| Insolvency | Becomes insolvent | ||
| Government Action | Lease property (in whole or in part) is expropriated compulsorily acquired or nationalized by a Government Agency. | Pay to the Lessee any and all actual costs, expenses, charges, and/or penalties incurred or sustained by the Lessee as a consequence of such termination | |
| Government Action | Lessor event of default in the first perating year | Refund of commencement fee, all construction/develoment cost incurred by Lessee | |
| Policy Change | There is a change in law | ||
| Breach of terms | Commits a breach of a material provision of agreement |
| Year | 2007 | 2008 | 2009 | 2010 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Target | Achievement | Target | Achievement | Target | Achievement | Target | Achievement | |||||||||
| Inward (-) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||
| General Cargo (-) | 594768.8 | 0 | 713723 | 0 | 856467 | 0 | 1027760 | 0 | ||||||||
| Dry Bulk (-) | 1808589 | 0 | 2170307 | 0 | 2604368 | 0 | 3125241 | 0 | ||||||||
| Liquid Bulk (-) | 165586.4 | 0 | 198704 | 0 | 238444 | 0 | 286133 | 0 | ||||||||
| Year | 2011 | |||
|---|---|---|---|---|
| Target | Achievement | |||
| Inward (-) | 0 | 0 | ||
| General Cargo (-) | 1233313 | 0 | ||
| Dry Bulk (-) | 3750290 | 0 | ||
| Liquid Bulk (-) | 343360 | 0 | ||
Information will be published as soon as it is available.
