Posted on April 29, 2019
For over a decade and half, successive governments in Nigeria have been pumping billions of naira into building of Inland Container Depots (ICDs). Yet, there seems not to be any positive result, as several of the proposed terminals have not taken off. Even the Kaduna depot that had since been commissioned has not yielded any positive dividend due to myriad of problems. BAMIDELE OGUNWUSI, ANDREW UTULU and IKECHI NZEAKO, in this report, examine the challenges, the views of stakeholders on the projects and the way forward.
Nigeria Concept of Bonded Terminals and Dry Ports
Inland Container Depots (ICDs) in Nigeria is a strategic expansion of ordinary warehouses that are usually developed at the ports and related cities, meant for safe-keeping of cargoes for owners before final take-over by consignees after payment of some customs duties. A bonded warehouse and Inland Container Ports (ICDs) are seen as mini-ports or an extension of a port, where usual ports operations take place. A custom bonded warehouse is a building or other secured areas in which dutiable goods may be stored, manipulated or undergo manufacturing operations, customs inspections while examinations are carried out and correct duties paid.
Inland dry ports are otherwise known as ICD’s or Container Freight Stations (CFs). An ICD is equivalent of a seaport located in the hinterland. It receives containers by rail or road from the seaport for examination and clearance by customs and other competent authorities. It has all the Loading and off-loading equipment needed to handle containers.
ICDs Locations In Nigeria
There are seven approved locations for ICDs/CFSs, which were concessioned to the private sector operators by the ICD Implementation Committee of the Federal Ministry of Transport as follows:
Isiala Ngwa in Aba, Abia State, Erunmu in Ibadan, Oyo State,Heipang inJos, Plateau State,Zawachiki inKano,Zamfarawa, FuntuaJauri, Maiduguri and ICNL, Kaduna
In addition to the seven gazetted ICDs, there have been proposals from the private sector to establish ICDs at Dagbolu in Osun State, Lolo in Kebbi State, Onitsha in Anambra State and Ogwashi-Uku in Delta State.
To analysts in the maritime and transports sector of the nation’s economy, dry ports are not just a Nigerian thing; it is a global concept used to extend maritime activities to landlocked areas.
These areas, according to analysts, cannot be shut out from trading activities.
So, dry port is a concept that promotes international trade, even maritime trade, without water. How it is done is that land is made available. The best way to make some of the land available and very functional is making the best use of intermodal transportation means- like having railway connections.
According to Anefi Mohammed, “A freight forwarding expert, in the case of Nigeria, the dry port concept had been in practice where we have bonded warehouses / terminals, far away from the conventional ports. We have such like the Lillypond terminal in Ijora, Lagos, it is like a dry port.”
“But when government went ahead to say they want to establish dry ports in its reality, unfortunately, they politicized it. They did it by putting the cart before the horse. You have not been able to functionally put rail system that will lift containers from Lagos ports, Port Harcourt ports, Calabar, or Warri ports, to Kaduna in place, you went to commission Kaduna dry port in January, 2018. This is April 2019.
“This is a Public Private Partnership. It involved Inland Containers Nigeria Limited. The government of Kaduna and the Federal Government are involved in that of Kaduna. Before now, that ICDNL- Inland Containers, was already operating bonded terminals in Kaduna. It was moving cargo already from Lagos precisely by road, to Kaduna. This was before it was given a license to operate, a bigger portion as Dry Port. So, the concept had been on for close to two decades. In fact, it was an Obasanjo regime concept as President. The Nigeria Shippers’ Council (NSC) promoted it. Where we were talking about ICDs and Inland Freight Stations, ICDs and CFS. Almost 20 years, this is 2019. None has been able to take off effectively,” Anefi, the vice chairman of International Freight Forwarders Association (IFFA), Ports and Terminal Multipurpose Services Limited (PTML), chapter lamented.
Problems Militating Against ICD Take-Off
“Firstly, you have poor rail system,” a maritime stakeholder, who preferred anonymity said.
“Even the much noise the government is making about the improvement in the rail system, you are taking loans to bring obsolete rail facilities to your country. The rail facilities that the world has stopped using, you are going to borrow money, to bring them into your country; something that the world has dropped. Why not even go for modern coaches, faster trains, what they are bringing are slow locomotive trains,” Anefi averred.
For Kelvin Igho Kagbare, a maritime analyst, the ICD project started way back in 2006, over a decade ago, during the time of Chief Adebayo Sarumi, as the Executive Secretary of the Nigeria Shippers’ Council (NCS).
According to him, when he left the council, he went to Nigeria Ports Authority as the MD.
“He had since retired from service. Then Alh. Isa Biu took over at Nigeria Shippers’ Council, he also pursued the issue of the ICDs, from Biu, now Hasaan Bello, who also took over as ES Shippers’ Council, the issue of the ICDs, is still on ground.”
He said the problem is not the idea, not the initiative, adding that the problem was the implementation and the execution of that project.
“The ICD project as far as I am concerned, is one that is hinged on the effectiveness of the railway system.
“Because the rail is not there, the way it is expected to be, the ICDs are therefore, struggling.
“Importers are also very reluctant to choose those areas where they have ICDs as the port of destination for their cargos. This is because, if they take the goods there, how are they going to get there? They are going to get there by roads; this is a waste of time. They feel it is better to take their cargo from Lagos at once, by the same road, and go straight to wherever the destination.
“So, for ICD to succeed, it is the rail. They should link all of them by rail, the road infrastructure in the country are inadequate. Our roads- Port Harcourt, Benin, Onitsha, Owerri Aba are down.
“The problems of congestion you witness in the ports is because they are not linked to rail. That is why you see Apapa traffic gridlock, it is affecting everybody. Apapa, Tincan, PTM ports, all of them are locked down. When your goods arrive, you must pay government its levy.”
Why ICDs Are Considered As Failed Project
ICDs in Nigeria are considered as failure because the project had been planned for almost two decades, yet not functioning. From Obasanjo’s government to Yar’Adua, Jonathan, and to Buhari, it is still from one talk to the other. Government money is poured into the project, either by way of visitations, by way of enlightenment; it is simply costly and nothing is being done. It can be considered as a road map to waste.
Way Forward
Industry observers are of the view that the way forward is for Nigeria to have very functional and modern rail system. “It is not enough to be shouting everywhere that you have standard gauge; it must be modern. It must be modern for it to move cargo in good time, it must be modern for it to be efficient and proficient, it is not enough to say you have done links, if you link rail, and the rail is taking three days from Lagos to Kaduna, then, it is not different from trucks going by roads, it is not meeting trade expectation, modernise rail. Nigeria is not even making effort towards having a modern rail system. What they are doing now is having a rail system that is not modern and they are busy boasting and making so much noise about it. Painfully, there is nothing to show that it will improve soon.
“When you do that, the concessionaires you want to do business in the ICDs,give them time line, there should be time line, where they need government loanto expand, they can go into partnership with banks, government can even give incentives, there should be time line, we should know the date Ibadan ICD will be taking off. There must be time line attached to every project. Then, there must be political will to go ahead to do it, not just for showmanship, politicians are busy going to sites of rail tracks to take pictures, showmanship, we don’t need that, we want to see cargos move from the port, on rail track down to dry ports, without pressure on our roads, not that containers should be dragging with buses and cars, in some cases, containers will start falling on buses and cars. Once we have most of those containers going by rail, even fuel, the tanker coaches that can go by rail, the pressure on our roads will be less, the pressure on our roads will reduce, in such a way that your cost road maintenance will drastically be reduced. But when you have heavy duty vehicles, driving on the same road, where smaller vehicles are also going, competing for the same space, you are putting lives and trade goods in danger,” Kagbare explained.
On what the failure of the project has cost Nigeria, stakeholders and the economy, he said: “If the ICDs are not working, it means that everybody in Nigeria is coming to Lagos to clear goods, the meaning is that the roads in Lagos are under pressure, not just the ports in Lagos, because some people are making the mistake, the roads from the ports to the roads, you see vehicles lying down on the bridge, people sleeping on the bridges 24 hours a day, not moving, but stationary on the bridge. That is to show you the extent to which it has affected trade and the country. You see motor boys and drivers living inside their vehicles for days, in some cases, based on investigation, some people take up to three weeks, 21 days to be able to assess the port from the port access roads.
“They are already in Lagos, they are looking at the ports, and it takes them 21 days to enter the port. These are goods that could have just gone, straight from the ports to the warehouse. It puts pressure on the roads, stop flow of trade.”
He said that last year, Maritime Workers’ Union said over 10,000 people lost jobs in the maritime industry. “As far as I am concerned, that is an understatement. They were only giving figures within their own ranks. If you look at the entire industry, it is more than that because you need to count the food vendors; you need to count the persons who come to supply chandelling effects in the port sector. So the chain effect of this thing has a multiplier effect.”
However, the Minister of Transportation, Rotimi Amaechi, has assured that by early June this year, the rail transport system would be ready for use between Lagos and Ibadan. The Lagos-Abeokuta rail, according to him, had been completed earlier in the year as passengers were offered a three-month free ride.
Amaechi, who spoke to some journalists, recently, noted that his commitment to the full take off of rail transportation in Nigeria was aimed at making life easier and better for Nigerians.
The Lagos-Ibadan rail project is being executed at the cost of $1.6 billion, which is being funded from the loan from the Chinese government. He explained that the hitherto abandoned Itakpe-Warri rail line had been completed and has commenced operation. “It shall, for a start, be carrying 100 passengers per trip, until more coaches are purchased. The Itakpe-Warri rail line was abandoned for 34 years.
“It is one rail project that we did not borrow a dime to complete. President Muhammadu Buhari was and is still enthusiastic in driving the rail project in Nigeria as a way of improving the nation’s economy. The Itakpe –Warri rail line was revived and completed with $200 million. Presently, the Railway Village which was burnt is being rehabilitated, just as the Railway yard, which will comprise school, hospital and maintenance units, is being built in Agbor, Delta State,” he said.
For Lucky Amiwero, the national president of the Council of Managing Directors Licensed Customs Agents (NCMDLAC), inland container port system cannot function effectively without putting in place a properly functioning rail system in the country. He said inland container port system requires the movement of containerized cargoes to the hinterland, adding that both the road and rail networks in the country are terrible.
“Nigeria has one of the worst roads in the world; the roads are old and bad; most of them were constructed many years ago and are in a state of disrepair. The rail system is not much better. Without an effective transport system, inland container port system cannot work in the country,” he stated.
According Olanipekun Adeleke, a freight forwarder, one of the reasons for the establishment of the inland container depots was to cater to shippers in the hinterland, particularly those in the northern part of the country.
He posited that the decision to create inland container depots in the country was part of economic the reform measures of the then administration, which were hinged on free market modalities with transportation as the engine to drive it. He added that the opportunities in the inland container system appear numerous enough to stimulate the economic processes, ginger the economy in the hinterland and create robust environment that will accelerate growth.
The freight forwarder said that two inland container depots were originally conceived to serve the hinterlands and their landlocked neighbours (Niger and Chad), adding that they were established as extensions to the seaports and to operate within guidelines set by the Nigerian Ports Authority, whereby cargo discharged at the seaports destined for the hinterland is immediately land freighted to the inland container depots under customs bond.
However, he said that after more 15 years after the idea was, none of the ICDs has become operational with the various actors, including the Federal Government, state governments, Nigerian Shippers’ Council, Nigeria Railway Corporation trading blames and engaging in buck-passing.
For Adekule Olawale who works in one of the Lagos ports, inland container depots were conceived as a means to deal with port congestion and make business easier for shippers, adding that they were supposed to have machinery and equipment for handling and temporary storage of containerized cargo as well as empties. “Inland container depots are designed to help importers and exporters handle their shipments near their place of location, hence they are located in the hinterland of the country.
According to him, proper inland container depots have all the necessary loading and off-loading equipment needed to handle containers with all necessary customs services and officials, adding that they are meant to bring shipping services to the door step of shippers across the nation and aid the decongestion of the seaports, thereby making them user friendly.
Inland container depot is generally recognised and operated as an extension of the seaport. However, he posited that it has not worked in Nigeria because of the poor transport system in the country. “For inland container depots to work effectively in any country, the transport system must be topnotch because the containerised cargo must be taken from the seaports by rail or road to the hinterland where the inland cargo ports are situated.”
Source: independent.ng
