In our previous feature (PS September 2005) we reviewed the concessions awarded in Cote D’Ivoire, Ghana, Togo, Nigeria, Cameroon and Angola. The majority were awarded to regional specialists Bollore Group, and to APM Terminals. CMA CGM, although a relative newcomer, is already involved in West African terminals as part of a consortium building a new container hub at Lome in Togo.
How much of an improvement will these concessions actually bring to port operations? A local liner operator executive explains: “Certainly in Angola the concessions will help when the government finally gets around to dealing with the outstanding court case.
However the port will still not be big enough and more space is required. There is much to do to improve Customs processes and a new Customs code is being formulated by Crown Agents UK. The long term solution is a brand new terminal next to the current oil base where it would be possible to provide plenty of reclaimed land and berths without draught restrictions.”
A local agency manager with Hull Blyth adds: “Whilst concessioning (in Luanda) will undoubtedly improve the efficiency of the operation due to better working practices and increased investment in cargo handling equipment, the fundamental problem will remain, namely a lack of stacking area. This is solvable in three ways. Firstly, the area could be increased, although now extremely difficult geographically. Secondly, a completely new quay could be constructed north of the existing boundary of the port, although the oil services terminal is growing into this area rapidly. Thirdly, Customs could allow the opening of off-dock full import terminals. Speaking to Crown Agents they say that although Customs recognise this as a solution the law does not allow it at present.”
Further up the coast Ian Treder, md of independent Nigerian liner agency CPMS, says: “Concessioning may help improve vessel berth time and productivity but alone is not the solution. The congestion in Nigeria is hugely disruptive to local transport providers”. Ship operators have had to add hefty congestion surcharges and are suffering. Last year the Delmas organisation reporting up to two week berthing delays and a 30% drop in annual sailings as a consequence.
Another local executive of an independent ro-ro perator says: “Concessions will improve the basic organisation of the ports but will still leave much more to be improved, Customs procedures and post and pre-shipment inspection processes need to be radically improved especially in Nigeria.”
He continues: “The concessioning has bought improvements in Cameroon but everywhere needs bigger tonnage. There are now new geared 1,700TEU vessels in the trade but really 2,500TEU are required to counter the increasing cost per vessel slot for charter hire and bunkers. This change would certainly shift operators towards calling at three main ports and feedering to the others.
So there are fundamental problems that need to be addressed urgently. These will affect the ability of the concessionaires to maximise their returns on investment and liner operators to operate without delays to their vessels and their containers.
INTO DEEPER WATER Specifically, Customs procedures need to be streamlined and postshipment inspection procedures need to be changed. This is causing horrendous vessel and container turnaround delays.
And even after the efficiency gains that concessioning normally brings, there will still be the need for more terminal space to cope with trade expansion and for deeper water to attract bigger, more cost effective ships. Increasing terminal capacity in most cases in West Africa is relatively straightforward and there are indications that in Nigeria there will be new sites in addition to those concessioned.
Pressure to do the same in other locations is starting to mount too.
However the issue of deeper water may not be so straightforward.
Draught has been one of the major limiting factors for decades in West Africa. Together with port congestion these twin constraints stimulated the growth of ro-ro services as congestion beaters in the 1970s and 80s. These self-sustaining vessels were high on cubic capacity and low on draught. Now, with the exception of Grimaldi Lines, the majority of the trade has been containerised and previous ro-ro operators like OTAL and Delmas now run purpose container vessels that maximise TEU capacity within the draught restrictions of the region’s ports.
In the past 18 months increasing charter hire and bunker costs have made the standard-sized vessels in the trade of 1500-1850 TEU real capacity geared vessels, uneconomic and caused operators such as P&O Nedlloyd and MOL to withdraw direct services from the Europe-West Africa route and perhaps for the same reason, for PIL to cut back on its services.
The new concessions do not go far enough to address the economic imperative for larger vessels. The Ghana concession at the deepwater berth in Tema has around 10 m of water and Nigeria, for practical purposes, is still about 9.5 m, says a local agent. A search of the database of London-based specialist container shipbroker, GG Lucas, reveals that given the ongoing need for geared container vessels, whilst there are some available in the 2-3,000TEU range, vessels of this capacity normally have a draught requirement of 11 to 11.5 m. Clearly if it is economic to do so and if funding is available, a significant amount of dredging is required at nearly all of the region’s ports.
One of the major international dredging companies with offices in Nigeria, says there is huge potential to improve African ports by dredging but funding is just not available. Given the low GDPs of most African countries, financing for dredging is difficult for port authorities or government to obtain. It is available on a soft loan basis from the specialist development banks if it can be proved that the infrastructure investment is not available from private finance. Often projects fall at the last hurdle as there is the need for some of the funding to be financed locally by government which in Africa is often difficult to obtain. However a concession granted to a major operator provides a guaranteed revenue stream against which it is easier to obtain loans for dredging.
