Famine to feast

08 Apr 2013

Mike Mundy looks at the routes in the lucrative West African market

More than one eyebrow was raised recently when the news filtered out that Bollore Africa Logistics, APM Terminals and Bouygues had been awarded preferred bidder status for a second container terminal at the port of Abidjan, Ivory Coast.

Bollore and APM Terminals already hold the existing container terminal concession in Abidjan – Bollore 60% and APMT 40% - and accordingly logic would suggest that a different operator may have been preferred for the second terminal in order to develop a more competitive base from which to deliver container handling services and thereby bring handling charges down.

Logic doesn’t, however, seem to have come into it. Possibly the bidding process was solely about financial matters rather than incorporating qualitative marking within it and thus the result basically serves to continue a monopoly with, as a result, port users unlikely to benefit from more competitive pricing. Too strong an emphasis on financial matters in the bidding for port concessions in Africa has long been identified as a problem area.

Africa is now of major interest to international terminal operators – a striking difference from just 10 years back when such entities were few and far between on the West African coastline. This is part of the general uplift of interest in Africa – with countries such as China, South Korea and the US tapping into its oil, mineral and natural resource supply capability which is driving ever upwards economic and trade growth.

The greater wealth in the region and ensuing larger trade flows have, in turn, encouraged the linking of Africa into global shipping networks, and given all these factors Africa has shot up on the ‘interest list’ of international terminal operators. The scramble for Africa is on and West Africa is of central interest.


Joined up

There are various routes in – APMT has forged what amounts to a partnership with long time African port operator Bollore. They are now ‘together’ at various locations on the West African coast, although APMT is independent in certain locations such as Apapa, Nigeria. Equally, Bollore flies solo in various locations such as Lome, Togo where it is developing a third deepwater, container berth. This new 450m berth with a draught of 15m alongside will be able to accept vessels of up to 7,000 teu.

Other parties are pushing to get involved on the West African Coast: International Container Terminal Services Inc has big aspirations – ICTSI in consortium with CMA CGM and Necotrans was one of the bidders that did not succeed at Abidjan. So too was the Port of Singapore Authority-MARSA consortium and, bidding on its own, Mediterranean Shipping Company.

ICTSI has, however, recently signed a sub-concession for a major deep water container terminal complex at Lekki, close to Lagos, Nigeria. Lekki’s role is envisaged as the ‘modern port for Lagos and Lagos State offering purpose-built, deep draft, berthing facilities and state-of-the art landside and handling facilities.

APM Terminals currently operates what was originally the Nigerian Ports Authority container terminal Apapa. This was concessioned to APMT in 2006. Since taking over the terminal APMT has invested $330m and raised annual throughput capacity to 1.2m teu per annum. It too has announced another major new port project near Lagos – the so-called Badagry mega port project, the first phase of which aims to be up and running in 2016 when Apapa will reach its capacity limit.

The project will be sited together with a free trade zone 55km (34 miles) west of Apapa and the port of Lagos on the Benin-Lagos Expressway. When fully developed it is intended that Badagry will have 7 kms of quay and 1,000 hectares (2470 acres) of dedicated yard, with state-of the art facilities for container, bulk, liquid, ro-ro and general cargo as well as oil and gas operations and a barge terminal.


Surplus of riches

The engine of growth is being revved up along the West African coastline with new container terminal capacity fast moving from a famine to feast situation.

At one time container shipping lines looking to establish a transhipment hub for West Africa had to look as far afield as Las Palmas or Algeciras, Spain but soon they will be spoilt for choice.

As Table 1 indicates, a large number of new deepwater facilities are under development that can fulfil the hub role for new higher capacity vessels as well as aim to serve extended hinterlands including in some cases landlocked countries such as Mali, Niger and Burkina Faso.

Africa fulfils the criteria of risk and reward – there is always risk as Getma International, a subsidiary of the Necotrans Group, found out recently when expelled from its Conakry, Guinea, container terminal concession. There is, however, also reward and traditionally in container terminal operations in West Africa this has been in the shape of high stevedoring and container storage charges.

The big question is, however, how long will such charges prevail with so much new deep water capacity being added along the West African coastline?

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