Financing Transport for

Transcription

1 Financing Transport for Growth in Africa, Tunis, 2007 Ports Reform and Concession in Nigeria Arif Mohiuddin Principal December 3, 2007

2 Outline Key Reasons for Reform Involvement of CPCS Preparing for privatization Summary of transactions Progress in restructuring Achievements Direct benefits of reform Challenges faced What Remains to be Done

3 Key Reasons for Reform Long turnaround time for cargo and ships Insecurity of cargo Unproductive labour force in NPA Multiple government agencies in the ports Corrupt practices Excessive charges To improve efficiency and productivity in the Nigerian Ports Sector

4 Involvement of CPCS BPE, through an IDA credit, engaged CPCS Transcom as Legal, Restructuring and Concession Advisers in December 2003: To propose a legal and regulatory framework To formulate the restructuring process To prepare the concession plan To assist in the bidding process and negotiation with the selected bidders In December 2004, BPE engaged CPCS Transcom also To provide technical support to the Presidential Task Force on the Ports Reform

5 Preparing for Privatization April 04 All due diligence work and detailed plans, including all bid documents were done July 04 Legal and regulatory framework to convert NPA into true landlord ports and to establish the independent regulatory commission September 04 Based on CPCS Legal and Regulatory Report, the first draft of Ports and Regulatory Commission Bills were ready

6 Summary of Transactions BPE issued bid documents for the terminals in four rounds, in 2004 and terminals were concessioned through competitive process 12 others are concessioned through direct negotiation

7 Summary of Transactions Over 100 EOIs received from both reputable international and local terminal operators A total of 59 bids were received for 13 terminals, in a competitive bidding process All of these terminals have already been handed over to private operators

8 Summary of Transactions (Con t) 12 Terminals are being concessioned through Direct negotiation 11 concessions have been handed over Negotiation for the remaining terminal is complete

9 Progress in Restructuring The restructuring work was spearheaded by the Presidential Task Force, with technical Support from CPCS Negotiations with labour unions ended in a successful agreement on social package in 2006 Transport Commission Bill and Ports And Harbour Authority bill are awaiting approval from the National Assembly

10 Progress in Restructuring (Con t) NPA is presently acting as both the regulator and the landlord pending enactment of the Bills CPCS also prepared business plans for the proposed two port Authorities

11 Achievements 24 terminals have been assigned to 16 different local and international terminal operators, notable among which are AP Moller, Bollore, Bremenports, and Eurogate Major investments have already started taking place by private investors in various terminals Significant improvement in efficiency and productivity in the ports sector

12 Achievements (Con t) Competition among various terminal operators leading to improved service and reduction in port costs Slowly attracting transshipment cargo for West Africa AP Moller won the bid for Apapa container terminal, bidding a record amount of more than US$ 1 billion! In US Dollar value, the Nigerian Ports privatisation is the biggest successful privatization endevour in Nigeria s history

13 Direct Benefit of reform Prior to reform NPA was subsidized by the government of Nigeria Port reform Private operators are to perform all terminal operations (not cost to government) Improved efficiency and reduced cost through competition Pvt. Operators to invest about US$ 1 billion in ports development Pvt. Operators to pay about US$ 5 billion to Government as fees

14 Challenges faced Reaching an agreement with Labour Unions on Severance packages and secure funding for the retrenchment and pensions Keeping Labour Unions from widespread strike Keeping NPA on board throughout the process Resolving the existing Lease issues and converting some into directly negotiated concessions Balancing the interests of both parties during Negotiations with the preferred bidders

15 What remains to be done Concessioning of 1 remaining terminals Warri New Port A Negotiation complete Enactment of the proposed bills

16 Glimpse on the Transactions S/N Name of the Transaction Terminal Operators/Preferred Bidders Local/Foreign Participation Name of the Port Concession Rounds Concession Duration (Years) Bid Amount 10% Discount rate) Value in US$ million Status of Concession 1 Apapa Container Terminal A.P. Moller Apapa Terminal Ltd. APM Terminals as Lead with local participation Apapa Port Complex Round , Handed Over 2 Apapa Terminal 'A' Apapa Bulk Terminal Ltd. Local lead with Atlantic Bulk Carriers Mgt. from Greece Lagos Port Complex Directed Negotiation Handed Over 3 Apapa Terminal 'B' Apapa Bulk Terminal Ltd. as Technical Partners Lagos Port Complex Directed Negotiation Handed Over 4 Apapa Terminal 'C' ENL Consortium Limited Local lead with Dublin Port Company and ICIL from Lagos Port Complex Round Handed Over 5 Apapa Terminal 'D' ENL Consortium Limited Ireland and Civil & Coastal from South Africa Lagos Port Complex Round Handed Over 6 Apapa Terminal 'E' Greenview Dev. Nigeria Limited Local Dangote Group Lagos Port Complex Directed Negotiation Handed Over 7 Port Harcourt 'A' Ports & Terminal Operators Nig Ltd Local Lead with P&O Nedlloyd Port Harcourt Port Round Handed Over 8 Port Harcourt 'B' BUA International Limited Local Lead with Apec Antwerp Port consultants Port Harcourt Port Round Handed Over 9 Tin Can Island Port 'A' Josepdam & Sons Ltd Local Lead with Techserve and South African Sugar Company from South Africa Tin Can Islan Port Round Handed Over 10 Tin Can Island Port 'B' Tin Can Island Container Terminal Ltd Bollore Group as Lead with Zim Integrated Shipping Services and Local participation Tin Can Islan Port Round Handed Over 11 Tin Island Port 'C' Sifax Nig Ltd local firms as lead with Bremenports Tin Can Islan Port Round Handed Over 12 Tin Can Island Port RoRo Comet Consortium Local Lead with Eurogate Int. and MSC Tin Can Islan Port Round Handed Over 13 Lilypond ICD A.P Moller APM Terminals as Lead with local participation Lagos Port Complex Round Handed Over 14 Onne FLT A Brawals Nigeria Limited Local Group Onne Port Directed Negotiation Handed Over 15 Onne FLT B Intels Nig Ltd Local Group with International partners Onne Port Directed Negotiation Handed Over 16 Onne FOT A Intels Nig Ltd Local Group with International partners Onne Port Directed Negotiation Handed Over 17 Calabar Old Port Addax Limited International Company with local base Calabar Old Port Directed Negotiation Handed Over 18 Calabar New 'A' Intels Nig Ltd Local Group with International partners Calabar New Port Directed Negotiation Handed Over 19 Calabar New 'B' Ecomarine Ltd. WestAfrican Group Calabar New Port Round Handed Over 20 Warri Old 'A' Intels Nig Ltd Local Group with International partners Warri Old Port Directed Negotiation Handed Over 21 Warri Old 'B' Associate Maritime Services Local Group with International partners Warri Old Port Round Handed Over 22 Warri Old 'C' Julius Berger Nigeria Limited Local Sub.of an Int. firm with Bremenports Warri Old Port Directed Negotiation Handed Over 23 Warri New 'A' Global Infrastructure Limited An Indian Group based in UK Warri New Port Directed Negotiation Negotiating 24 Warri New 'B' Intels Nig Ltd Local Group with International partners Warri New Port Directed Negotiation Handed Over 25 Koko Port Gulftainer Bel consortium Local Group with International partners Koko Port Round Handed Over

17 Thank You