Private Sector Involvement: Key To Maritime Infrastructure Development And A Solution To Apapa Gridlock

TIMI OLUBIYI, Ph.D.

Maritime transportation plays a major role in international trade and economic growth of any country and Nigeria is not excluded. Transporting goods by sea remains the most common way to trade globally. A substantial percentage of goods are transported through the ports for reasons for cost consideration. According to the Nigerian Ports Authority (NPA).

Nigeria has six seaports namely Apapa and Tin Can in Lagos State, the Onne and Port-Harcourt ports in Rivers State, the Warri Port, in Delta State and the Calabar Port in Cross Rivers State. But, by accounts only the Lagos ports are operating near full capacity currently. The Apapa ports in Lagos State attract the highest freight traffic because of this reason and both ports are the busiest in Nigeria. The Ports located in Apapa Wharf are Lagos Port Complex and Tin Can Island Port Complex. The Apapa and Tin Can Ports account for 70% of imports according to data from Nigerian Port Authority. The activities at the Apapa Wharf, however largely contribute to the constant gridlock in the Apapa axis and the port access roads.

The Apapa ports are plagued with many challenges such as congestions, lack of effective automation, high container dwell time, a high turnaround time of vessels and haulage trucks, inadequacy of port facilities, and equipment such as berths, cranes, and scanners, etc. These issues have a tremendous negative impact on the operational performance of the ports. The inefficiencies at the ports have brought about a negative impact on the port users and the surrounding areas. In recent years the issues at the ports are worrisome, with very huge adverse implications to tax revenue, job creation, and real economic activities. Nigerian businesses are also experiencing an increase in the prices of raw materials due to these aforementioned and most essentially in the transportation cost.

Furthermore, port users’ especially small business owners lose revenue to this persistent anomaly at the ports. This has also encouraged uncontrolled sharp practices that have been on the increase in recent times. Nigeria is an import-dependent nation; consequently, the port operation is very vital to businesses, citizenry, and the economy at large. If port operations are efficient, it will reflect in the revenue generated at the ports, which would be contributory to the economy boost and improved well-being of the populace.

It is vital to note that, the poor transport infrastructure in Nigeria is a huge challenge to port users especially Small Medium Enterprises (SMEs) who engage in imports and exports. Most importantly the state of the roads leading to and from the port is deplorable and this is a huge concern. The menace of gridlock in Apapa is occasioned by the state of the roads and the ineffectiveness of port services coupled with poor traffic management. The inadequate road capacity is another cause and all these have led to truckers parking indiscriminately for years on road shoulders and the bridges.

This menace has resulted in increased transportation costs and poor services from the truckers. Shipping and haulage cost are responsible for a major proportion of the transportation cost. According to data and empirical evidence doubling transport, the cost could lead to a drop in trade by as high as 80%. Higher transport cost ultimately leads to lower levels of import and export activities and a corresponding increase in the unemployment rate. About 90% of goods from the port are moved within the country via road transport. Therefore, road infrastructure is significant to the timely delivery of cargoes and the haulage business in Nigeria as a whole. Hope is not lost; the Apapa gridlock problem can partly be addressed by the provision and availability of efficient maritime transport infrastructure such as the development of Vehicle Transit Parks (VTPs) as part of the port reform initiative.

The port operations can still be enhanced through the availability of quality, cost-effective, and efficient Vehicle Transit Parks (VTPs) which can decongest the traffic situation in Apapa ports and its environs. Vehicle Transit Park also referred to as Rest Stops or Truck Transit Parks (TTPs) is a state-of-the-art modern transport facility located off the major highway designed to provide temporary rest locations for drivers, truckers, travellers and other users in major high-volume traffic corridors across a country. It is primarily intended for short-term breaks and also long-term parking services where drivers especially truckers can get fuel, food, restrooms, shower, and basic supplies like oil and spare parts as well as servicing and repairs of haulage vehicles amongst others. VTP can improve the safety and security of drivers, truckers’, cargoes, travellers, and the entire transport value chain if considered. A standard Vehicle Transit Park will typically have the following: gas station, warehouse, hotels and motels, restaurant, mechanic workshops, fire station, police post, health clinics, Weight Bridge, banks and cash points, ample parking lots, mall, recreation facilities, laundry, washrooms, automated cargo tracking system, etc.

The VTP can support maritime transport infrastructure and it can also influence the business environment in Apapa Wharf and in Nigeria as a whole if established. It would equally relieve the ports of congestions and the following will correspondingly be reduced or eradicated: leakages of income, pilferage, high cost of services and transportation, accidents and hazards, possible extortions, and indiscriminate parking on the road shoulders, etc. It is important to state that infrastructure improves life and also empower people. Therefore, Vehicle Transit Parks will promote the ease of doing business policy of the Federal Government, create employment opportunities, provide wealth creation, increase efficiency at the ports and also offer good business prospects if considered. It will also boost local and international trade for importers and exporters in Nigeria. When the VTP is in place coupled with, technological innovations, and effective automated tracking systems no trucker will have a reason to park indiscriminately on the road shoulders. In the case of the Apapa ports, such a VTP facility can be situated outside the corridors of Lagos State. However, with the adoption of effective technology-driven techniques, that will enable a call-up system of trucks and truckers. This will enable a seamless clearance to Apapa Wharf ports without indiscriminate parking at the port access roads. Therefore, port regulators and administrators can achieve a lot with the VTPs and information communication technology (ICT).

So, what are the opportunities for investors in the VTP maritime transport infrastructure? The construction, the operation, and the provision of various services in the Vehicle Transit Parks (VTPs) are areas investors can look at. Investment in maritime transport infrastructure is avenue investors and business owners especially Small Business Enterprises (SMEs) can explore to make good investment returns. Because a standard VTP provides various services as mentioned above, these are the areas investment can be considered. Mostly such transportation infrastructures are done through Public-Private Partnership (PPP) arrangements. That implies that the Government will provide enabling environment and land while private entities and business owners will provide funding, technical know-how and also operate the facility. The administration and operation of the VTP will be done by investors and it is usually fully profit-oriented. Therefore, savvy investors and business owners can take the bold step to benefit from operating a viable Vehicle Transit Parks in Nigeria.

Note that the African Free Continental Trade Agreement (AfCTA) has been agreed upon and Nigeria signed to be part of it. The key benefit of this agreement is to facilitate movement and trade across the African continent. Therefore, the availability of transportation infrastructure such as Vehicle Transit Parks around Nigeria will facilitate trade and improve the supply chain within and outside the country especially as it concerns the import and export of goods. The VTP facility can also stimulate the creation of major market hubs in their host States in Nigeria, which could further boost intra-state and inter-state trade potentials. The Nigerian Shippers’ Council under the Ministry of Transportation is currently promoting the development of Truck Transit Park a modern transport support infrastructure across the country. So the anchor of Business Matter can be reached for further information.

The maritime industry regulation and administration in Nigeria is mostly dominated by the following players; the Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Ports Authority (NPA), Nigerian Ship-owners Association (NSA), the Nigerian Shippers Council (NSC), Ministry of Transportation, Ministry of Industry, Trade and Investments. However, Nigeria Shippers’ Council is at the forefront of facilitating the development of the Truck Transit Parks though a Public-Private Partnership arrangement in Nigeria.

You can explore some of the business opportunities and investments prospect available in the development of Vehicle Transit Parks in Nigeria as an investor, operator, or service provider. However, you need to have a good business case and also do a further independent enquiry on the opportunities presented in this article. Good luck!

Dr. Timi Olubiyi holds a Ph.D. in Entrepreneurship and Small Business Management. He is a prolific investment coach, Chartered Member of the Chartered Institute for Securities & Investment (CISI) and a financial literacy specialist. He can be reached on the twitter handle @drtimiolubiyi and via email: drtimiolubiyi@gmail.com.