Why dry ports are ‘dry’

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Posted November 7, 2019

Nurudeen Ismaila, a freight forwarder, is not happy. This is because of his inability to deliver consignments to his client in Kaduna with ease and cheaply. For him, if the Kaduna Dry Port, the country’s pioneer dry port, inaugurated almost two years with fanfare, was efficient, the story of cargo movement would have been different.

Like Ismaila, several others have continued to lament the state of the dry ports, especially the facility in Kaduna, as it is yet to deliver the much-expected gains in terms of generating business, jobs and other benefits expected from such facility.

A dry port, according to experts, is an inland intermodal terminal connected by road or rail to a seaport; and operating as a centre for the trans-shipment of cargo to inland destinations.

The concept of dry ports in Nigeria was muted during President Olusegun Obasanjo-led administration. Around 2003, the administration approved the creation of Inland Container Depots (ICDs) in various parts of the country, with emphasis on areas lacking seaports.

Toeing this path, the Minister of Transportation, Rotimi Amaechi, in November 2017, said the Federal Government had approved six ICDs, one in each of the geo-political zones.

The ICDs are located at Erunmu, Ibadan for Southwest; Isi -Ala Ngwa, Abia, in the Southeast; Funtua, Katshina; Zawachiki, Kano for the Northwest; Heipang, Jos, for Nortcentral and Jauri, Maiduguri for the Northeast.

Notwithstanding the laudable initiative, nothing has been gained from its establishment. Several factors are said to be responsible for this.

Legal framework

The Federal Government has not put a legal framework in place for the establishment or creation of dry ports. Whereas the Customs and Excise Management Act (CEMA) allows the Nigeria Customs Service (NCS) to issue licences to bonded terminals which can offer dry port services at micro levels, dry ports require legal backings to come into existence.

The Ports Act number 38 of 1999 (as amended) establishing Nigerian Ports Authority (NPA) is silent on dry ports and may very well require legislative amendment by the National Assembly. This has not been done before Nigeria went ahead declaring the Kaduna Dry Port a port for use.

In Part VI, Section 30, the Act talked about declaration of ports but did not accomodate dry port as part of the maritime, import, export or free trade area. The Act in Part VI, Section 30, under the headline “Declaration of ports” was explicit on the Power to declare places, etc., as ports, their limits and approaches: (1) The Minister may, by order, ‘’(a)declare any place in Nigeria and any navigable channel leading into that place, to be a port within the meaning of this Act; (b) specify the limits of any place declared, as a port in accordance with paragraph (a)of this subsection; (c)declare any navigable channel leading into a port to be an approach to that port, within the meaning of this Act.

‘’(2) The places specified in the Second Schedule to this Act, shall be deemed to be ports, and the limits of those ports shall, until other provision is made in accordance with paragraph (b)of subsection (1) of this section, be the limits declared and in force immediately before the commencement of this Act, including-[Second Schedule.](a) all ocean beaches within 100 metres of the high- water level; (b) the waterways, creeks and swamp and below the highest astronomical tide level and all beacons, moles, piers, jetties, slipways, quays and other works extending beyond natural line of the high water level.’’

National Council of Managing Directors of Licensed Customs Agents (NCMDLCA) President Mr. Lucky Amiwero said there was no legal framework. According to him, dry ports don’t exist in Nigeria, by law, as it has to be legally provided for and recognised as either port of destination for imported cargoes or port of origin for export cargoes.

Support infrastructure

The basic infrastructure that should support any port are lacking. At present, there are no good roads leading to the dry port in Kaduna from Lagos, Port Harcourt, Warri, Onne or Calabar.

Cargo laden trucks are forced to stay longer on transit causing delays and increasing the already high cost of doing business. The rail system is not fully ready. Dry ports are supposed to be supported by inter-modal transport components such as rail system that will move cargoes from and to the facility.

This is why stakeholders are of the view that, in this instance, the country has put the cart before the horse by establishing and hurrying to celebrate the creation of a dry port when rail infrastructure is still being worked on. This remains a factor in promoting business for a dry port.

Waking up

Perhaps Amaechi must have had this in mind when he placed orders for some wagons for the Lagos-Ibadan railway, which upon completion, is expected to bring the Ibadan dry port to life. When this is done, it will have a positive effect on the cost of patronising dry ports and by extension add value to the cost of doing business.

Further initiative to improve the situation of traffic along and around the seaport that will eventually feed the dry ports are on the horizon.

For instance, the Managing Director, Nigeria Railway Corporation (NRC), Fidet Okhiria, in May said the newly acquired 18 wagons were to boost the ICDs by moving cargoes from Apapa sea port to dry ports in Kaduna and other states.

Poor marketing/sensitisation

One of the factors affecting the effectiveness of the dry port, according to experts, is the failure of the government to do enough marketing and sensitisation about the Kaduna ICD before it was inaugurated.

Experts explained that neighbouring landlocked countries, which require proximate port services should have been negotiated into patronising the project. It is more economical for Nigeria’s neighbouring landlocked country, Niger Republic to transit her imports through the Kaduna ICD or Kano Inland Container Terminal, but the country has continued to patronise the Republic of Benin seaport which is over 1500 kilometres to Maradi, Niger’s southern commercial hub. Besides, the shipping community is yet to begin stemming cargoes to the dry port as a known port of destination. This has adversely affected patronage of the facility.

ANLCA reacts

Association of Nigerian Licensed Customs Agents (ANLCA) President Iju Nwabunike said this development is costing the country over 100,000TEUs loss (Twenty-foot equivalent unit of container traffic) yearly.

He said the revenue loss to Nigeria as a result of this is huge because Benin is paying high transport cost for moving her transit cargoes from the Cotonou Port to Maradi.

Nwabunike, who spoke in Lagos, said it would be cheaper for Niger to transit her cargoes from the Kaduna Dry Port (about 250 kilometers to Mardi) or Kano ICD (about 150 kilometers to Maradi); than from the Cotonu Seaport, which is over 1,500 kilometres to Maradi.

Nwabunike, also a Director of Inland Container Nigeria Limited (ICNL), operators of the Kaduna Dry Port, regretted that since the Dry Port was inaugurated with fanfare by President Muhammadu Buhari in January last year, it has been confronted with challenges, including ineffective rail transporting system and poor state of the roads from Lagos to Kaduna.

He, however, said the most daunting challenge is the failure of the shipping firms to fall in line with global standards by sending cargoes directly to the ICDs. He expressed fears that the action of the shipping firms might be aimed at sabotaging the success of the ICD initiative of the Federal Government.

Nwabunike further warned that unless the Kaduna Dry Port is up and running effectively, Nigeria would lose the over 100,000TEUs Niger’s transit cargoes. This is because Benin Republic has already started construction of 1500 kilometers standard gauge rail line from Cotonu Port to Maradi, Niger Republic. According to him, over 800 kilometres of the new Cotonou-Maradi rail line has been completed.

“When that rail line is completed, it will reduce the cost of transportation of cargoes from Cotonu to Maradi,” he warned, adding that the only advantage Nigeria has over Benin to snatch the Niger transit cargo traffic from them is the low cost of transportation the country offer to Niger shippers.

The closed borders has also made the situation worse. Nwabunike said this development has turned neighbouring countries against Nigeria. “In fact, they almost mobbed us during our recent visit to that country to explain to them why they should use the Kaduna Dry Port. This is quite understandable given that this country, Niger, is more emotionally attached to Benin which is their fellow French-speaking nation, than to us,” he said.
Source: The Nation

Source: hellenicshippingnews.com