A major stakeholder and key player in the maritime industry, the Managing Director/Chief Executive Officer (CEO) of Virgin Links Nigeria Limited, Hon. Josiah John Olu, recently, addressed journalists on the state of Onne Port and the Onne Oil and Gas Free Zone. The Tide’s Donatus Ebi presents excerpts:
Looking at the Onne Port, especially The Oil and Gas Free Zone, in your opinion do you think that facility, that complex is really fulfilling its objectives vis-a-vis the Nigerian economy?
Well, incidentally I am a local: Local in the sense that Onne is my community, Eleme by extension is my local government area. I am also a key player in the marime sector, including the Onne Free Zone. We are licensed stevedores and licensed recruiters. We provide support services to the Oil and Gas Free Zone and the maritime sector.
For a proper historical perspective, the Onne Oil and Gas Free Zone and by extension the Onne Port is segmented into two: the Federal Ocean Terminal and the Federal Lighter Terminal.
The Federal Ocean Terminal is the port or the area that has the capacity for deep sea or ocean-going vessels, bigger vessels. You have the water draft of close to 14-15metres at the Federal Ocean Terminal while at the Federal Lighter Terminal, smaller vessels, service boats are the ones that can go into that place with a draft even close to ten metres.
The Port initially was designed to handle commercial cargoes, oil and gas cargoes and general cargoes. But when the government decided to streamline it and make it more professional, it decided to designate the two Port as the Oil and Gas Free Zone area. So, the two ports fell under the Oil and Gas Free Zone region. The whole idea behind that is to encourage oil and gas activities, bringing in oil and gas parts, bringing in oil and gas presence into Rivers State, into the Niger Delta region.
Recall that apart from the Port Harcourt Port, the Onne Port is the biggest port. It’s even bigger than the Port Harcourt Port. So, when they decided to make Onne Port Ocean Terminal and the Lighter Terminal as dedicated free zone area, the whole idea was to encourage investors to leverage on the incentives that go or come with the free zone classification, like tax haven, you have free tax; apart from the withholding tax and PAYEE, you don’t pay any other tax in there. So, you can have the benefit of repatriating all your earnings including profits out even in the currencies that you made them. So, these incentives are geared towards making sure that foreign investors are attracted to the area, like bringing in direct foreign investments.
But what we have right now, I can say that it’s disheartening because the Port is not even functioning the way it should. First, I would say because of the classification, because during the COVID for instance, the COVID-19 pandemic era, you have a dip in the activities of the oil and gas majors and what happened was that the Port was under-utilised. A whole lot of them closed shops because patronage was low. Even right now with most of the oil majors trying to move out of the area it became a little bit difficult.
Yes, we knew that there were some domestic issues they were facing which as a people we are trying to address. That has to do with management of the area. But the port on its own in itself has not been functioning optimally because general cargo has not been coming in. And then we’ve had the opportunity to talk to some of these investors and they raised concerns and explained to us reasons why they’ve not been pushing their cargoes through the Onne Port. So, I would say that the Onne Port has not been optimizing its capacity.
So, what will be responsible for that? What has the investors been telling you is their challenge?
Because I am also a player. I am a player in the sense that my corporate office is also in the Oil and Gas Free Zone. Before now, we have a challenge of the tariff of the supposed landlord. NPA gave a concession to Intels to manage the area. The tariffs were on the high side and everybody was complaining. Yes, something has been done about it, but can we say it was too late. I really can’t say but above and beyond that, there are other issues that have been plaguing the development of the port and one of those issues I will say is the road. The road is in a terrible state. From 2014, I know that I have made passionate appeals to the government that there was need to fix the Eleme axis of the East/West Road but that has not been done. The road as we know it, is the gateway to about two states in the South/South; that is Akwa Ibom and Cross River. It is also the gateway to the Eleme Petrochemicals, Indorama complex, it’s also the gateway to the two refineries; Port Harcourt refinery in Alesa-Eleme and if you look at the volume of traffic on the road; you want containers, containerised cargoes to pass through the road. The road every day you see cargoes falling on the road. No importer wants to go through that stress.
Yes, the Onne Port has been designated as the Oil and Gas hub. Most of the services we know are offshore but we have a whole of the services that are onshore. And for the services that are onshore, we have to make use of the road and if you have a road that is in that dilapidated condition it becomes difficult for them to deliver optimally. I can tell you that some days you can stay as much as six hours in a spot on the road. We’ve made passionate appeals to the government. I see that the present administration is trying to do something on the road but we are also pushing because it’s going at a snail speed. Because with our topography and terrain if something is not done fast, after a while even the milestones you think you’ve achieved will be eroded because of the terrain which is difficult.
So, one of the major challenges that the port has been facing is that of accessibility in terms of the road infrastructure. It is extremely poor. It’s just a section of it and I think that if government, because the whole essence of government is to provide a conducive environment for businesses to thrive and if government can step in, do more. They are working right now; the present administration is working but I think they can do more on the issue of the road.
I know that I have engaged a whole lot of the individuals that use the Port. One of the major complaints I got was the number of checkpoints on the road; taking cargo from the Onne Port to may be the East. We have an instance where an importer told me that he brought in a container down from Lagos and he needs to take it to Onitsha, that he didn’t experience more than eight checkpoints on the road to get to Onitsha, but from Onne Port to Aba, he saw close to 30 and for everybody who is into logistics or supply chain, the person knows that for every break you take in terms of logistics you are losing man hour. You are losing money. So, I’m sure that government can look into these to make sure that the road will have a smooth passage because if my documentation has been confirmed to be correct by the Nigeria Customs Service and my cargo has been released, I don’t think that I should have tons of checks on the road just to pass from one state or one city to the other. So that also is a major concern.
Another concern or reservations that was expressed, which I think from four-five years ago has been addressed is the behaviour of the locals but that has been addressed. So, I think that government should do more to make sure that the port picks up, because it is important to know that the Port is like the live wire of the South/South. Apart from the Onne Port, you don’t have any major port in the south. The Port Harcourt Port cannot take the level of cargoes that the Onne Port can handle. The Port Harcourt Port is a shallow water and so it cannot handle heavy cargoes, but the Onne Port is deep sea. It can handle any other cargo that any other Port in this world can handle. So, it’s important for government to look into this.
About three months ago, the Comptroller-General of Nigeria Customs Service visited the Port complex and they displayed a large cache of arms and ammunition, sophisticated rifles and all that. And because of that they declared a state of emergency at the Onne Port and said it has become a channel where importers use to ferry in contraband and counterfeit goods. Can you address that issue as regards what the Comptroller-General said? Or are you disturbed by the number of arms and ammunition and counterfeit drugs that are coming via the Onne Port?
While I don’t want to say that it’s an indictment on the Nigeria Customs, the truth of the matter is that over time we’ve heard repeatedly that the ports have been so computerised that it should be able to detect these things.
First things first, the customs need to collaborate with the country of origin. These items are coming from a country, how did they get on the vessels? Manifest are sent to us and when they get here, two things I will like to look at in this regard is; one, the agency is working because if they are not working in the first place, they should not be able to detect those counterfeit drugs and the ammunition. Secondly, there are ways to check this. It’s to tighten what they are doing. You cannot check for counterfeit drugs or the ammunition on the road. It is at the Port, at the point of loading the cargo that is where you have to arrest it. But I think they can do more. Do more by partnering with other countries, other agencies in other countries so that at the point of loading these cargoes to Nigeria you know that. And then if you have manifest that are well spelt-out you will know that it’s Mr. ‘A’ that is bringing in this cargo and Mr. ‘A’ will know that there are consequences for carrying out such actions. So, it makes it easier. I will say that let’s allow the system work, encourage the system to work because in most cases they collude with officials to evade and try to escape with these heinous crimes. So, yes, while I will commend the Nigerian Customs for detecting the ammunition and the fake drugs on time, I think that with what we’ve been told, they should have a system in place that without making a show out of it should pick out these things.
These things happen in other climes. That’s how the big countries identify drug peddlers because at the airport they have machines in place that will detect if you are carrying those drugs. So, we should have it in place and when these peddlers know that the country as it is, has a system in place to apprehend them, you will see that they will desist from it.
Last week, the Managing Director of NPA, Dr. Abubakar Dantsoho, was at the Onne Port on tour of various facilities in the Port. And during that period, he told newsmen that the authority is positioned for increased investment in the ports. Considering the position of the MD, what is your own call to investors?
While I will applaud the MD’s visit, because it is only when you visit that you have a first-hand knowledge of what is on ground, I will say that there are some issues that need to be tackled to encourage investors. First is the issue of power. The entire Free Zone, the two ports, we don’t have power from the national grid. You don’t even have a turbine. I was expecting that is one of the issues that NPA as an agency should tackle and by extension the Oil and Gas Free Zone. We have two major agencies of the Federal Government operating or overseeing the Free Zone and the Port. You have a dedicated agency called the Onne Oil and Gas Free Zone Authority, you also have the Nigerian Ports Authority, and that since inception till now you don’t have the National Grid in the Port, it’s alarming.
Secondly, as at the time the Port was actually functioning, we had close to 250 oil servicing companies operating in the port. Everybody was running on their personal independent power plants which is not supposed to be so. We have the Alakiri Gas Plant next door, not even up to five kilometres from the Free Zone. You can just pipe gas down there and just build one small independent power plant that will service the area. There are things that you can put in place that will serve as incentive for investors to come in. It is beyond promising them. And you are saying that you’ve spoken to Intels, for me it’s neither here nor there. Because Intels in itself is not a government agency, they are investing in providing infrastructure. Will you provide infrastructure for somebody that is non-existent? Because until you make the environment conducive for companies to come in, investors to come in, investors can’t come in. And one of the major things you can do for investors to come in is when an investor is assured that he has seamless power. Because most industries now are driven by power. So, if you don’t have power there’s nothing you can tell me to come in and spend my billions of dollars in your area when I know that I will be scratching my back to get power.
How has the establishment of the Onne Oil and Gas Free Zone as well as the other companies, for example NPA, Nigerian Customs, impacted on the communities and the lives of the people? Are you satisfied with what is going on there in terms of employment, infrastructure and all that?
Well, this is what I will classify as work-in-progress. Because while in one breath you will say that before now it was very poor, but I know that with engagements from the stakeholders, the companies have started listening and also the communities and stakeholders have realised that there is no end to negotiation, there’s no end to discussions, there’s no end to dialogue. There’s no limit in dialoguing with somebody. So, they have been engaging in dialogue and even though it’s gradual, even though it’s slow, but the results are coming out. We know that things can be better but so far so good and also given the gloomy nature of the economy right now, there’s to an extent that you can push.
I want to get your reaction on the Ports in the South/South, especially Port Harcourt and Onne, the ports have not been dredged for a long time and that the preponderance of security checks that you raised alarm over just a few minutes ago in the South/South and parts of the South/East, is a way to discourage importers from using the ports in these zones. What will you say to that?
Answer: Honestly if you ask me, I will not say there is any concerted effort to de-market the ports in the South/South. The truth of the matter is that it is high time that stakeholders rise up to say enough is enough. In the West, when you have four, five, six checkpoints on the road, the commissioner of police is called upon and when stakeholders come together, they say listen, we don’t want this. Because the truth of the matter is that, as long as you have these checks on the road, people are discouraged. I see no reason why I should bring in my cargo and I will suffer the inconvenience of passing through 30 checkpoints when I can still bring in my cargo into Lagos and with six or seven checkpoints my cargo is the in my factory, it’s in my warehouse. So, I do not think, it’s a personal opinion, I do not think that there are any deliberate attempts to de-market the ports. But what I also know is that the operatives in the port in the South, especially Onne, they try not to adhere to the books, so to speak. And that has been a major concern. I have had cause to bring in cargo through Lagos and when I went there, after I paid whatever, I was told to pay my cargo came out. I’ve also had reasons to bring in cargo through Onne and I know what I went through to get my cargo out of Onne. So, we will not say it’s deliberate, it’s the system that has been put in place by individuals that are operating in that area.