BIG STORY: Bonded Terminal Operators – Long walk to extinction 

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BIG STORY: Bonded Terminal Operators – Long walk to extinction 

Segun Oladipupo   |     

Setting up private business ventures in nigeria especially in the maritime industry has become a nightmare due to irregular government policies inimical to private businesses.

A visit to Apapa, the home of premier port, reveals how a lot of buildings have been deserted due to relocation or abandonment of businesses because they no longer thrive.

This has led to many Nigerians rendered unemployed. Those who are lucky among the lot have been engaged elsewhere while some others are still in the business of roaming the streets in search of daily breads.

Such is the travail of bonded terminal owners who committed huge resources to building facilities where containers could be stemmed to serve as reliefs for terminals in order to avoid congestion.

The venture has since led to indebtedness among the proprietors of such ventures even as some have lost their lives as a result of inability to repay loans obtained from banks.

It has also led to reduction in the number of functional bonded terminals in Nigeria.

Refusal by  terminal operators to stem containers to these bonded terminals is one factor too many that sent the business owners to their early graves.

This is because there was no alternative measure or a consideration for this set of investors when the port was about to be concessioned in 2006. The terminal operators believed there were no reason why they should share their revenue with anyone.

In Nigeria, the maritime industry plays a very important role in the economic sector because as consumer nation, Nigeria depends almost totally on the goods that come through the ports, not withstanding the government’s efforts to discourage importation and encourage exportation and production.

With these high volumes of import and the unnecessary bottlenecks in the clearing process, a lot of goods end up staying longer than necessary at the Ports. This led to a serious congestion of the available space in the ports causing delay even in the discharge of cargo by vessels. The delays also affected the vessels that were to load and sail, causing loss of valuable time and money to ship-owners, agents, importers and exporters.

The creation of bonded terminals was necessitated to decongest the Port where grossly inadequate precipitating excessive delays in turn round time of vessels at the Nigeria harbours.
In the year 1980 and 1982, the Federal Government of Nigeria responded to the challenges by establishing the two container Depots in Kano and Kaduna with a combined capacity of 8000 Teu.

These terminals have the full presence of the Nigeria Customs Services with other related government agencies required for Port operations.  It was conceived also as a viable channel of supplying the much needed industrial raw materials, spares and agricultural materials for the development of hinterland States, local government councils as well as a necessary assistance for the organized private sector engaged in manufacturing and agriculture.
Bonded Terminal Operations offer: They have operating license to effect laden containers on Bond either by road or rail
Effective transfer of containers from seaport to our depots in Kano and Kaduna without the frustrating and costly delay in Lagos
Bonded terminals have full complements of Nigerian Customs Service and security agencies
Clearing of cargo at one’s convenience to its final destination through less cumbersome documentation process
The standard practice is that on arrival, containers clearance does not exceed 24 hours which is far ahead of the unattainable 48 hours clearing period in the seaports.
To ensure effective and safe transit, the Nigeria Customs Services provides able officers as Escorts to ensure that bonded containers arrive at the Depots within a reasonable time and with seals intact.
The operations therefore provide quality services to meet customers “just-in-time” needs.
The systems guarantee quick service delivery within the expectation of the much cherished customers in the hinterland and offer peace of mind.
When bonded terminal came into being in the early 80s, it was greeted with promises and high hopes of revenue and employment generation.

Few decades after, some of the investors are no longer alive as most of them have died due to High Blood Pressure arising from inability to pay bank loans.

In 2006, when the ports were concessioned to individuals, there was no consideration for the sustenance of the project which huge sum had been committed into.

Recall that it requires huge sum to acquire land, pay registration for licence and acquisition of equipment for cargo handling.

In all, it does requires not less than N500 to N800 million to see up a bonded terminal which today are mere structures without functions.

While some have been closed down due to on ability to get cargoes from sea port operators who prefer to take all the cargo to themselves without recourse to what befall the bonded terminal operators. However, as it is today, the business reviving bonded terminal operation can no longer thrive because of greed from seaport terminal operators.

The operators feel the business should be managed by them and that is why you find out that some of them now operate their own bonded terminals outside the seaports. A typical example is PTML and Sifax group. Among some of the off dock operators who are have little or no activities include: Sapid bonded terminal at Mile 2, Denca and Migfo.

At least N500,000 million is required for a bonded terminal to be licensed by the customs and aside that figure. It is expected for the owner to own a landed property and the needed requirements to operate and own such facilities.

Following the unfavourable business environment occasioned by port concession in 2006, off dock terminal operators under the auspices of Association of Bonded Terminal Operators has lost three key members to government’s flip flop approach to implementation of key agreements of the concessions.

Executive Secretary of the association, Mr. Haruna Omolajomo, disclosed this in a recent chat with journalists lamented that the  bank indebtedness and lull in business activities were responsible for the untimely death of the operators of the three bonded terminals.

Omolajomo added that the government should be held responsible for the untimely death of their members, alleging that the association was lured into investing massively in off dock terminal operations.

Speaking on some of the challenges facing the association, the terminal operator explained that before the concession between 2004 to 2006, there were about 24 registered bonded terminals, but as at today, 10 have closed down due to none stemming of cargoes to their facilities.

Those have who passed on according to Omolajomo, are Chief Olugbenga Ayileka  (Cargo Vision), Eloka James (Jaelith) and  Chief Eugene Anachebe (Denca).

He said that each member of the association during pre-port concession period were generating over N1 billion in annual turn over, but that could no longer be sustained after concession.

He said that for members of his association, port concession has been an ill wind that blighted their investments and took away many jobs.

“We provided off dock facilities to the NPA for the purpose of eliminating congestion in the ports and serving as a holding bay for containers under a secure environment”, Omolajomo stated.

He said that between 2001 and 2005, a total of 383,788 TEUs were transferred to then existing bonded terminals.

“This had positive impact on space availability and utilisation as we successfully complemented the efforts of NPA to decongest the ports.

“Beside, there is the realisation of one of the objectives of National Economic Empowerment and Development Strategies (NEEDS) where private individuals were encouraged by the federal government to invest in maritime business”, he added

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