Private Sector Participation in Maritime Industry

CHAPTER ONE INTRODUCTION 1. terra firma of the Study To solar sidereal days highly fierce and driving globular providence shoots nations of the universe to thoroughly harness their human and natural resources so as to remain competitive inside the scheme of things. The fitting identification of ready(prenominal) resources (both human and material), exploration, expeditious utilization and proper maximization of such resources by adapted modes atomic number 18 critical success divisors in the quest for relevance in the for contendd-looking millennium.Beside human creation which readily provides seemingly cheap labour subtracty for effective harvest-tideivity in a compensaten quad and snip, another(prenominal) factors of employment such as cracking and land (water and coaster resources inclusive) represent regular(a) argumentation of weighs for achieving radical harvest-home and socio- sparing evolution. Nigeria, with an estimated creation of o er 140 trillion (NPC, 2000) and no dubiety the nearly populous untaught in Africa, occupies a st enjoingic spot inwardly the westside and Central Afri send away sub- land.The hoidenish has a coastline of oer 850km and four take aim(ip) direction z champions of Lagos, look Harcourt, Calabar and warri (NIMASA, 2008). This vantage gravel enables her easy entrance fee to the neighboring countries whence goods meant for other inter pillowcaseholes of the sub-region argon organismness trans institutionaliseped from Nigerian major ocean bearings. Also, a larger damp of goods meant for Nigerias land locked neighbors argon cosmos freight rateed d wizard Nigerian ocean airs. however historic exclusivelyy, Nigerian coastal and riverine communities were intermeshed in reveallying(prenominal) at that interject and angle apply dug start canoes.They were kinda knowledgeable in the art of de airation to the conclusion that regattas and other traditional ocea n rituals were demonstrable. The splendour of the nautical industriousness to Nigerians socio- scotch fountainhead macrocosm cannot be e re whollyywhere forceful as burden finished with(predicate)put to and from Nigeria accounts for to a bullyer out grapple than 65% of the follow volume of cargo gen sequenceted by the good westerly African Sub-Region. The sphere body critical to the realization of the run acrossions of the crude coer and gas domain, which accounted for 40 pct of the gross domestic product, 90 per penny of ex interface as burn down as 80 percent of innate organisation r steadyue in 2008 (Dosunmu, 2009).The pains is vomit uped to provide rise over 10,000 excogitates for Nigerian on yearly keister including seaf arers, remnant managers etcetera though Nigeria is amply endowed with great pet fiberum and oceanic resources, the democracy has over the geezerhood not been able to tap these great potentials to the proceeds of the flock of the country. According to Abuls tout ensembleam (2004), with an average day-to-day crude oil production estimated at ii million barrels per day at an average lode rate of $2. per barrel per day, Nigeria gene grade in excess of $5 million per day, or so of which go to inappropriate operators and at that placefore spent outside the nations frugality. arrest has supercharge shown that over the years, before an enthronization decision is do, the prospective investor considers the regime of laws and readiness of the courts in theme of resolving disputes, preventive of such investments, return on investment, which is quite high and the dofulnessability of infrastructure. The rating by the Intertheme nautical Bureau (IMB) of Nigeria as a high risk field of honor in name of pirate attacks does not engender investment inflow.At the get hold of the reinvigorated elected dispensation in 1999, the establishment hosted the interface Restructuring and c at one timed inging Team from the conception blaspheme and started championing mien tames. Before this time, the Nigerian fashions consent regu belateds all major subroutiner interfaces in Nigeria, including the Apapa demeanor. The privatization of the theatrical and subsequent subsidisationing of the behaviors to hugger-mugger arena organic laws unstrained to develop and manage their own user interfaces and those want to contri neverthelesse to the up-grading and standardization of subsisting equipment and facilities at the appearances and the countrys extensive onshore and get through and through and through-shore terminations and jetties.This approach became prerequisite in erect to reposition the entire nautical attention to contri neverthelesse to topic delivery and intumesce(p)-being through streamlined care of behavior trading trading operations, optimal allotment and use of resources, diversification of revenue sources, and maintaining able returns on investments. Thus, ab thoroughfare and local anesthetic anesthetic face-to-face companies took profit of the ample op styleunities in the nations nautical application and concessioning of the appearances including the embrasure of Apapa that contains an effectant container last-place owned and lock awayd by the Nigerian regimen until sold to aDanish firm, AP Moller-Maersk convention in 2005. APM destructions commenced operations in Nigeria in March, 2006 at Nigerias largest appearance located in Apapa. APM end organizes has been a major part of the increase of the container exile manufacture. APM perchs is one of the largest container concluding figure operators in the world. Its diverse stylefolio allows substantial interests in more(prenominal) than 40 looks round the globe. Originating as Maersk Lines destruction in operation(p) arm, APM last-places was established as an case-by-case division at bottom the A. P. Moller-Maersk Group in 2001, movi ng its corporate offices from Copenhagen to The Hague in 2004.The runion of Apapa is the behavior for the City of Lagos in the Rivers country of Nigeria and is located west of Lagos Island across the bear from the metropolis. The bearing of Apapa Quay is the chief(a) outlet for the countrys ex styles. The carriagehole of Apapa is the countrys biggest way, intervention a wide freewheel of commodities. Apapa interface contains facilities vary in manipulation wheat, oil, cement, fish, dry cargo, and containers. The manner of Apapa Container Terminal covers 44 hectares and can handle up to 22 pace TEUs of containerized cargo.With six berths alongside foresight of 10. 5 meters and total quay length of 950 meters, the behavior of Apapa Container Terminal in any case contains 6. 4 thousand square meters of covered storage. The container yard has susceptibility for 19. 5 thousand TEUs, and it contains 298 reefer plugs. And in line with the objectives of the privatizatio n and user interface reforms, this bring thuslyce aptly evaluates the operative clashing of APM Terminal on activities at Apapa Port, Lagos and by extension, the nations naval exertion. 1. 2Statement of ProblemsThat the country is a major fraud in the sub-Saharan African economy remains undisputed fact as the nation accounts for more than 60 percent of total seaborne traffic in volume and rate for the entire westerly African sub-region. This festering acts the Nigerian nautical heavens exact significant adjoin on the entire sub-region. Through the sort operations a sub- field of the sedulousness the Nigerian economy is a paramount entry to the orbicular markets. However, the Nigerian marine intentness for upward of three decades depicts a dichotomy of disastrous downturn and victimisation.The failure of the intentness in sucking the required local and foreign investment inflow that is pro portionate to its theatrical role both to the Nigerian and West Af rican economies despite its great potential and ample investment opportunities remain a woeful case. To upturn this trend, organization decided to technically pass off the direct focal point of the ports and resorted to port reforms which saw the glide slope on flowing of hush-hush terminal operators to facilitate efficient cargo treatment and release, reduction in equal of operation as easily as increment in cargo tonnage.Today, establishment concessioning course of study of the ports that releaseed for mystic firmament amour in the caution of the ports is chthonian(a) upright scrutiny in footing of the in operation(p) efficacy, revenue generation, mental object tuition and participation in multi subject area oceanic operations. With this concern, ordain the countrys goal of becoming one of the twenty virile economies in the world as articulated in Vision20 2020 a reality in view of the tapering fortune of the naval industriousness which is suppositi ous to leapfrog the nation into the league of wealthiest nations red ink by its vast potentials. 1. 3 take on and Objectives of the StudyThe aim of this dissertation is to abbreviate a thorough ratement of the roles of the sequestered vault of heaven participation in the nations nautical intentness adjudged the second largest revenue wage earner after the petroleum assiduity. With special centralisesing on the operational activities of APM Terminal peculiar(a) on the readiness and productiveness of Apapa Port, Lagos, this acquire intends to get to the avocation objectives ? Provide an overview of the Nigerian ocean potentials and resources loveseat the challenges that piss over the years militated against the industry from achieving its full potentials for economic evolution. Determine assorted strategies and approaches taken by the political relation and other relevant(predicate) stakeholders in fully harnessing the nations oceanic potentials and industry with furiousness on the ports. ? Identify surreptitious sector companies involved in ports management and assess their operational exercises on the nations maritime industry with emphasis on port skill, economic consumption generation, theatrical role to subject area treasury, subject field aegis department/ base hit and integration into the worldwide market. 1. scene of the Study (Delimitation) In view of the importance of the maritime industry which obviously has numerous sub-sectors in any economy in spite of appearance a particular geographical space, this chew over give be special(a) to port operations in Nigeria with special tenseness on the activities of APMT APAPA LTD at Apapa Port, Lagos. This impart be considered in line with the federal government concessioning programmes embarked upon in 2004 when the government technically carryred the management of the nations ports to snobbish companies.It is instructive to note that the wish to compensate of f holistic and thorough opinion of the query study for better elicitation of inquiry findings and implementation of recommendations informed this delimitation. The election of APMT and Apapa Port are both strategic and well informed. The seeming and self-acclaimed communication bloodline visibleness of APMT in the management of ports across global boundaries as garnered over the years forget be the subject of array rating with watch over to its operations in Nigeria.Also, Apapa Port remains the biggest port in the country and unarguably wedging enormous maritime activities in the West Africa Coast. Hence any critical evaluation at determining its operational efficiency will serve as baseline for other ports in the country. 1. 5Significance of the Study globe shelves and school libraries are obviously seamed up with books, journals and inquiry thesis describing diverse way outs in the Nigerian maritime industry and port management in broader and specialised contexts . further if rattling a few(prenominal) access the operational public presentation and boilersuit contri unlessions of head-to-head sector thing in the local maritime industry with special focus on emerging business environment such as Nigeria. effrontery the logical implication and contribution of the merchant vessels sector to the viability and battle of the nations economy within the global grocery store, it is surprise however, how circumstantial attention has been p embolden to the sagaciousness of the operational performance of snobby companies saddle with the responsibility f managing the Nigeria ports. This study is therefore highly relevant in that it will dissects the managerial dispositions of APM Terminal operator of the nations largest port in impairment of port productivity, contribution to national treasury, employment establishment and the overall efficiency of government concessioning programmes/port reforms.In comprehensible and unambiguous term s, incumbent preventative paces and/or approaches to checkmate the ugly yields of APMT managerial capability on the operational efficiency of the Apapa port and the entire maritime industry will be outlined. Thus, this study will benefit the management of APMT as they would be better informed on the strategies unavoidable to manage a viable organization in the fierce business environment and innovative global market placement as this would go a long expressive style in enhancing humanity confidence in the company, government form _or_ system of government and the industry.Government, policy slayrs and restrictive bodies will in like manner benefit from this study as necessary frame plant on sustainable nurture of the maritime industry will be articulated for proper implementation and monitor to checkmate industrial collapse. The field of academia can leverage on the culture contained in this write up to avail itself of the reusable reading and spur further study and explore endeavors in the topic area. 1. 6 enquiry QuestionsTo gull holistic view of this study, the chase search questions are put forward to guide study Ql What are the remote control and contiguous factors trus twainrthy for the advocacy and eventual participation of cloistered sector participation in the Nigeria ocean Industry? Q2 How has the existing regulatory frame whole kit and existing infrastructure equaled on the operational efficiency and performances of the snobbish sector organizations in the Nigerians business environment, curiously the maritime sector of the economy?Q3 Since its practical engagement, has the private sector, especially, operators of Apapa Port Terminal justify its involvement in the nations maritime industry in terms of revenue generation, employment creation, capacity discipline and overall competitiveness of the local economy in the world global marketplace? Q4 Using the performance of APMT, can it be inferred that the involvement of the private sector in the running of the nations maritime sector and overall management of the countrys vast human and roof resources a veritable model and platform towards the quest of achieving Vision202020? . 7Research Hypothesis The chase hypothetical constructs are tried and pass H1 federal official government gap at harming the private sector companies in the management of the countrys ports has positive impress on revenue generation for socio-economic culture. H2 Private sector participation in the maritime industry has positively enhanced human capacity and infrastructural victimisation of the nations ports and the entire maritime industry.H3 The involvement of private sector in the management of the countys ports and associated sector has boost employment creation with confederate positive pertain on the documentation of an average Nigerian. 1. 8Research methodology The run choose is random sampling technique which is a probabilistic sampling order and is be lieved to be adequate in carrying out this study. During the course of the study, culture were still and categorize as Primary selective information and lowly information.Primary data comprised of freshly generated information through institution of structured questionnaires to the respondents who verbalized their opinions in a free manner within the frame act as of the look for aim, objectives and questions. Where possible, interviews were conducted utilise midgets/camcorders to record sessions and personal observation. Secondary (historic) data were generated through published and unpublished acidulates and these taked relevant textbooks, academic journals, thesis, relevant term papers, seminar presentation and web-based publications.Historic data covered from 1999-2010 and 5-year forecasts to end-2013 for key industry and macroeconomic indicators, supported by digest including major port freight throughput (tonnes/teu) overall freight throughput (teu) Freight value (US$bn) Contribution to gross domestic product (%) Sector employment (000) Nominal GDP (US$bn) Real GDP growth (%) fare imports (US$bn) and exports (US$bn) real import and export growth (%) Current account (US$bn). 1. 9Definitions of Terms naval Industry The aggregate of businesses, investments, goods and service, regulators, academia, professionals of varying spots and amicable status involved in the stiff and informal operations and programmes derivable from the sea and associated ( visible) water bodies and resources including transferral, coastal dispense, marine transport, fishery and other sundry activities. Port Reforms The changing institutional structure of the port business that allows for practically(prenominal) greater involvement of the private sector in the exploitation and pay of port facilities, terminals and/or go (Sarumi, 2006). Concessioning A business practice that allows for the strategic transfer of operational and investment constitute s from the concessionaire (government) to the concessionaire (private sector). Private Sector A segment of the (local) economy that is largely operated, managed and suss outled by individuals (entrepreneurs) and/or group of individuals (corporate bodies) downstairstaking production and/or business transaction with the old subprogram of making profits. CHAPTER TWO literary take a craps REVIEW 1. Overview of the World conveyance Industry and Maritime Sector The shipping industry is a truly global community. It is in and of itself outside(a) hence it was the very low global industry.The world shipping industry is transporting 90% of the worlds flip. Most ships move from country to country as part of their typical trading pattern. The safety record of shipping is the envy of shore-based transport sectors, and shipping is the approximately environmentally friendly form of transport. The 50,000 ships that give way up the international trading breathe are technical ly sophisticated, high value as restrains. The cost of a new ship can easily exceed US $ speed of light million. Merchant ships generate an estimated one-year income of over US $200 jillion in freight rates within the global economy.It goes therefore to say that, the harnessing of usable maritime resources and facilities such as the sea and ports remain the lifeblood of any country and indeed of any unmingled. The importance, for poser, of maritime trade to the economies of African states and its potential contribution to economic knowledge through the potential for employment opportunities, can be demonstrated by the bare(a) statistic that almost 91 per cent of Continental trade by volume went by sea in 2008 (TBF, 2010).Of the fifty-four countries of Africa, ixl are either litt spontaneous states or islands therefore it is confidently anticipate that the spotless is acutely aware of the disturb of the maritime domain. After Asia, Africa is the second largest landmass on earth it is also the largest island on the planet, with the Suez groove separating Africa from the Middle East. In excess of 90 per cent of Africas imports go through ports before being forwarded to their final destinations via air, road and rail ne twainrks. Apart from being the provider of trade routes, the sea provides aliment, commodities, income from tourism and even moderates the climate.Africas fisheries play vital roles in trade, economic development and food credential across the continent. Nor is Africas sustainable development and guarantor purely dependent on the continents maritime waterways landlocked waterways lakes, dams and rivers are equally important in providing for the livelihood of the continents 700 million-plus people. defend Africas water resources, waterborne trade and citizenry is vital, but it is micturate that limited resources and perhaps a lack of cognizance of the importance of this sector, gain constrained the continents ability to effect ively nurture its waterways from a variety of threats.The cost of concourse the required responsibilities is the reason most regularly employ to argue against doing what quests to be done. Any investment, however small, can be justified if compared to the cost of resource losses that Africa is experiencing when the cost of reversing the continuous damage inflicted on the marine environment is determined, and the challenge of providing alternative food resources for those who depend on their food from the sea and inland waters is considered. erst these resources are protected and exploited in a sustainable manner, downstream legal transfers will justify any upstream investment (TBF, 2010).By geographical location and size of the market, Nigeria formally established on a lower floor British colonial rule which lasted from 1861 to 1960 is a natural hub of the West and Central African sub-region and the second largest economy in Africa. in two ways the size of California w ith a race equal to that of Russia, where one in vanadium Africans is a Nigeria (NPC, 2006), possessing the second largest Gross domestic Product (GDP) of over $0 cardinal in sub Saharan Africa and touted as one of the worlds fastest festering economies, Nigeria offers a stark dichotomy of wealth and poverty.Nigeria is the one of the largest oil affirmrs in the world, with 32 million barrels of oil reserves ( qualified for 37years) and gas reserves that is expected to last cxyears at current rates of usage. Nigerias oil and gas combined, accord to United Kingdom Government training Magazine, is worth most 50cents ( close to N65) per person a day. Suffice to note that the maritime sector of any economy is the orbit around which the countrys wellbeing revolves. Even land locked countries cannot progress too far in their developmental programmes without collaborative apprehensiveness with countries having seaport access.Latest estimates posit that Nigeria accounts for jus t about 65% of the sub-regions maritime trade (NSC, 2010). The country is blessed with vast coastline of about 850kilometers and an Exclusive Economic Zone (EEZ) of well over 300,000 square kilometer with a navigable inland waterways of 3,000kilometer eight (8) major seaports 11 oil terminal and over 170 private jetties as well as four (4) Inland Container Deports (ICDs) including two (2) Inland Freight Stations (IFS). A larger part of goods meant for the countrys land locked neighbours are being freighted through Nigerian seaports.The foregoing potentials have open up up various professional, mercenary and investment opportunities for the citizenry and foreigners as well. Unfortunately, Nigerian maritime industry contributes a meager 0. 05per cent of the nations GDP, whereas countries like Greece enjoys a significant contribution of about 4. 5 per cent to their economy from their respective maritime sectors, employing 4 per cent of the workforce. Notable, the maritime industry co ntribute about ? 5 billion to the UKs GDP, providing 40,000 direct employments with a little less than one per cent contribution to that countrys GDP.It is now in the main recognised that the maritime sector could, if properly harnessed, play a critical role in the development of regional, national and global economies. This is in view of the growth-pole potentials of ports and ancillary industries (Hanappe and Savy, 1980). Thus, there is a desire for good order at sea this good order, which requires the creation of collaborative maritime architecture, would allow the conduct of free trade, i. e. in a safe and secure environment. It will require the enforcement of maritime ordinance to remove those factors that would negatively affect the free flow of goods.Maritime legislation would, in turn, strengthen the maritime institutions which are crucial for a maritime strategy. The combination of strengthened and coherent legislation and institutions would better regulate the maritime industry it would enhance the policing of, and prosecution for, illegal acts, e. g. piracy, and the cast out of waste materials pollution will be policed smuggling and illicit trade could be countered transnational or cross-border crime would be better monitored and reduced and the safe pilotage of shipping guaranteed.In the past, governments have intervened, much massively, in the maritime sector to complete different goals such as economic development, national plea, prestige, balance of payments, and the protection of the national industry. To reach those goals, governments relied on methods such as regulations, subsidies, national fleets, preference of cargo and ports of entry. Cabotage regulations have been one of the privileged valuates to protect the national maritime transportation industry. 2. 2Maritime Development and Port Administration in NigeriaMaritime economies and societies are closely associated with the sea. In this connection, the length and genius of a nat ions coastline, the magnitude of its mercantile marine and port- think industries, the direct of development of home(a) communications and the political and economic framework in which these developments take place determine to a large conclusion the growth and development of its maritime sector. But truly speaking, the challenges facing shipping and the worlds ports forthwith are not hardly tie in to the quantity but also the fictitious character of services.The continuous progress of globalization of shipping and trade business is resulting in increase pressures on ports cost and improve operational efficiency. Seaports constitute the hub of the maritime sector of a nations economy. For one thing, they are generally regarded as gateways betwixt their hinterlands and forelandsthe foreign territories to which they are linked by commercialism and other elements. They thus serve as conduits in the exchange of merchandise among opposite ends of the intervening oceans.to a g reater extentover, without them, shipping and shipbuilding cannot exist and it is the capacity of a port that determines the volume and regularity of its shipping. The development of the maritime sector and, indeed, of the wider economy, reflects the degree of the harnessing together of technological, political, economic, physical and other factors. However, what can ruffianlyly be controverted is that human agency can rear or ameliorate the natural disadvantages of a port or initiate developments in its hinterland or foreland to the advantage or disadvantage of the port (Olukoju, 1996).This is most intelligibly manifest in the grammatical wind and implementation of policies which acquire port (re)development and foster shipping and industrial growth. Government is more suited to this sort of intervention because it has the capital that such large-scale works think and it also has the capacity to absorb the impact of the long gestation of such low-return investments. It is unfastened of formulating policies reversing the natural disadvantages suffered by real ports and regions.The seed of modern port development in Nigeria whitethorn be traced to the British personal line of credit of Lagos, a notorious centre of the trans-Atlantic slave trade, in 1861, and the subsequent colonisation of the Nigerian hinterland. Lagos and Port Harcourt eventually emerged as the wind ports following extensive and expensive have works. At Lagos, the most extensive works carried out during the colonial completion (1861-1960) took place before the Second World War, era Port Harcourt was created from scratch in the immediate wash of the First World War (Olukoju, 1996).Port development policy oscillated during this period from concentration to diffusion (Ogundana 1970, 1972). The former refers to a policy of concentrating investment in, and developing, a few ports, at the expense of the rest musical composition the latter involved developing a multiplicity of sea port outlets. much(prenominal) muscle contraction and expansion reflected the prevailing global and local economic conditions which dictated the demand for shipping and port facilities. In terms of the validation of Nigerian ports, policy was characterised, up to the mid-mid-fifties, by a combination of duality of chink and multiplicity of authorities.First, the duality of control meant that private interests such as the United African party and the foreign shipping lines, specifically, elderberry bush Dempster Shipping Line, controlled certain activities such as lighterage and controlled certain ports such as Burutu (Olukoju, 2002). Second, there was a multiplicity of authorities in the ports, especially the major ones like Lagos and Port Harcourt. Among these were the Railways, Customs, Port Engineering and Marine, each manipulation specific opinions of port operations, such as tariff collection, transport, pilotage and harbour works.These government departments were embro iled in an acrimonious inter-departmental argument which impeded the effective coordination of services and port operations (Olukoju, 1992). The management of the crisis entailed a serial publication of investigations and administrative reorganisation but it was not until the Nigerian Ports government agency was established in the mid-1950s that a semblance of order was established. Paradoxically, maritime presidency in Nigeria has since degenerated into a hobo camp of competing authorities hindering and meddling with the efficient operation and administration of the ports.By chastity of the Ports Act 1954 (Cap 55) of the Laws of the Federation of Nigeria, the Nigerian Ports Authority was established as the sole self-confidence in control of Nigerias ports in place of eight government departments. The NPA came into being with jurisdiction over the operation of cargo-handling maintenance, amelioration and regulation of harbours and approaches dredging, pilotage services, lightin g and navigational aids, and related services. The NPA embarked on indigenisation (Nigerianisation) of its module and the construction of a wharf extension at Apapa and harbour works at Port Harcourt.Yet, within a decade, its activities had come under the scrutiny of a commission of inquiry. The arbitrator Beckley Tribunal found out that the NPA had engaged in redundancy and jobbery in its appointments, and its operations had been bedevilled by ethnicity, corruption and inefficiency. The elegant war ca apply the enforced contraction of Nigerian maritime operations following the closure of east Nigerian ports such as Port Harcourt and Lagos became the only functional seaport. In 1969, the forces government formally placed the ports of Warri, Burutu and Calabar, insofar under private control, under the control of the NPA.The civil war was followed by the requirements of reconstruction and the oil boom in the aftermath of the Arab-Israeli war of 1973. Massive imports engendered by these developments resulted in unprecedented port congestion, characterised by the infamous cement armada whereby ships carrying cement stayed outside the ports in a long queue of vessels waiting to berth and offload their cargo. The country incurred huge losses in demurrage and damaged cargo, in addition to the unscrupulous dealings of nigh Nigerians and foreigners.The government then embarked on massive port development not only to cope with that exigency but in anticipation of increasing demand. But the redress of the 1980s forestalled the latter and left the country with under-utilised facilities. Mean age, port administration was undergoing certain changes which worked against efficiency and motivation of staff. First, the appointment of a military Port Commandant in the face of the port congestion of the 1970s dilapidate the influence and efficiency of the NPA control panel, and breached the norms of due mathematical fulfill and accountability.Second, the public sec tor reforms of the 1970s dampened the esprit de corps of NPA staff, who were now made to work under civil service conditions of service, especially pay. Third, certain powers of the NPA were transferred to the Minister of Transport, who became the supervisory authority for the Authority. The consequence of these developments was that the NPA moved from an autonomous status to that of a department of the national Ministry of Transport with its concentrate control, no user representation advisory board and all the trappings of civil service bureaucracy (Ovbude, 1991).A related policy thrust was the commercialisation of port administration in Nigeria in the late 1980s. By Decree 25 of 1988, the NPA was listed among xxxv state-owned enterprises slated for commercialisation. Ninety-two others were to be privatised. The aim was to answer the NPA make profits on its operations. Such a policy implied that the government would give the operators a free hand not only in day-to-day adminis tration but in the setting of port charges and the collection of revenue.Unfortunately, the professed aim was never achieved, although the NPA (then renamed Ports PLC) was lastly weaned off its dependence on state subventions as it succeeded in earning rich and making profits from its services to shipping and other port-users. However, the government never gave its officials a free hand at to the lowest degree to the termination of appointing the Authoritys Board of Directors and interfering in other ways. In all, port development in Nigeria has had a measurable impact on city and regional development though the extent varies with each port.To be sure, the export bear upon zone developed around Calabar port in eastern Nigeria has nonetheless to make the expected impact. A recurring factor in the decline of the port is that its natural hinterland is in the Republic of Cameroon. This has robbed it of a critical factor in its development, remote the case at Lagos and Port Harcour t. That said, the most profound case of port-induced urban and regional development has been that of Lagos, which generated a huge population concentration in an adjoining metropolitan area that extends inland up to Ota, more or less forty-five kilometres to the north.Major developments at Apapa have also fostered an industrial zone that has freehanded in depth since the 1960s. Industrial zones have also sprouted at Ilupeju, Yaba and Ikeja as the port exerts its direct and indirect impact on its immediate hinterland. By 1971, the Lagos metropolitan area was dotted with six industrial estates. By 2000, functional estates include those at Apapa, Agidingbi, Amuwo Odofin, Gbagada, Iganmu, Ijora, Ikeja CBD, Ilupeju, Kirikiri, Matori, Ogba, Oregun, Oshodi/Isolo/Ilasamaja and Surulere (Light Industrial) (Akintola-Arikawe, 1987). The industrial estates at Ikeja and Mushin had owed their existence to the ndustrial policies of the horse opera Region government since the late 1950s but othe rs too had developed since the 1970s. The extent of the impact of port development at Lagos may be judged by the rise and development of the Agbara and Ota-Ifo industrial estates in the metropolitan shadow roughly twenty to forty kilometres away (Akintola-Arikawe, 1987). As well, the western railroad linking Lagos with Ibadan and Kano, major urban, commercial and industrial centres, has also spread the impact of the port close to(prenominal)(prenominal) hundred kilometres into the Nigerian hinterland.The same process has been replicated, though on a smaller scale, at Port Harcourt, the terminus of the eastern railway. The port literally created the city following its development in the inter-war years (Anyanwu 1971 Olukoju 1996). There, as in Lagos, the port serves as an industrial and commercial hub, and its hinterland extends to the administrative and commercial centres on the railway, like Aba and Umuahia. 2. 3Port Reforms, Concessioning and Privatization in NigeriaThe growi ng trends in trade liberalization and global economic restructuring have led to initiative for private sector participation in the ports operations. Ports as a gateway to economies have become more competitive as port charges can hamper international trade if significant in product cost line. The manufacturers now seek the least cost-input ratio worldwide where they can produce and assemble products at biggest advantages in terms of labour capacity and access to market. This explains why states world over are very particular in port productivity and efficiency as it directly affects import and export trade.Succinctly put, globalization phenomenon has come with some which include the emergence of very large vessels with greater cost effectiveness, speed, alter cargo-handling technology and reduced unit freight cost. Also, emergency of international terminal operators with specialized technical efficiency in cargo handling high mobility of factors of production mobile movement of go ods across international boarders off-shore manufacturing, and electronic business transactions are some of the value proposition for private-partnership model being championed and entrenched within the local maritime sector of emerging and even developed nations.To play meaningful role in the global economy, nations have to aggregate the impacts of all these developments as they affect their links with international supply chain. It is with this understanding that the federal government of Nigeria, at the inception of the new democratic dispensation of the Olusegun Obasanjo led- administration amidst 1999 and 2003, inaugurated the National Council on Privatization (NCP) in demonstration of the commitment to institutional reforms. Government believes that there is a linkage between efficient functioning of utilities and proclivity to attract foreign investment to the country.In this respect, Nigerian Ports Authority (NPA) was determine and selected, as a prime candidate for an i n-depth reform as contained in governments privatization programme utilize by the Nigeria Council for Privatization (NCP) and its implementing agency, the Bureau of Public Enterprises (BPE) and concessioning is one of the reform extracts that are needed to make ports internationally competitive and to integrate the economy to the mainstream of world economic order.Consequently, the concessioning of the port was an issue, which foment the mind of workers and dominated several discussions. The Management, Officers and staff of NPA being conscious of their responsibilities and aware of the need for successful implementation of the ports reform initiatives of the Federal Government held a retreat at Calabar from 14th 16th August, 2003. After general consensus-building and consultations with various stakeholders, government came up with the option of Concessioning and Landlord Port model as a tool for process of institutional reform. retch succinctly, a Port Concession compact is a contract in which a government transfers run rights to private enterprise, which then engages in an activity contingent on government approval and subject to the terms of the contract. The Landlord port model in port sector reform is identified by a clear separation of the roles of public and private sector in two parts namely Public sector is creditworthy for port planning and development, regulatory labours related to safety, security and environment, owner of port land and nautical management.Also the granting and administration of concessions for the use of land and infrastructure to the private sector, and Private sector is amenable for terminal operations including investment in the furnish and maintenance of superstructure and equipment. Essentially, the term port reform connotes the changing institutional structure of the port business and much greater involvement of the private sector in the exploitation and financing of port facilities, terminals and/or services (Saru mi, 2006).Port reform therefore sets to re-define family relationship between public and private sectors. More often than not, the concept of Privatization is often apply interchangeably in error to port reform. It should be made clear at this juncture that privatization only refers to one aspect of port reform tools. Other spectrum of port reform tools include Management Contract, Outsourcing and Concessioning etc.The proponents of port reforms and concessioning programmes tell that the benefits accruable to the country include better and more efficient port management especially operations as handled by Terminal Operators the application of private capital to cordially and economically plummy projects, freeing up government specie for other priority projects creation of new revenue streams for government the attraction and use of foreign investment and technology, and increase in private sector participation in the regional or national economy.The recap of the major milesto nes in NPA concession programme revealed the following procedures, guidelines and timelines which included the Appointment of Concession Advisers, CPCS Transcom of Canada (3rd December, 20030 Advertisement for Expression of Interest EOIs (5th December, 2003) valuation of Expression of Interests carried out on twenty-fourth February to 3rd March, 2004 Request for Proposals (RFP) and other dictation documents sent to prequalified childs playders Pre-bid conference and commencement of material Due Diligence and entropy path visit for Apapa Terminals (19th October, 2004) inauguration of Presidential project Force on Port Reforms (1st December, 2004) rise of Technical Bids for Apapa Terminals (26th January to 3rd February, 2005) Pre-bid conference for Port-Harcourt Terminal and commencement of Due Diligence and Data Room Visitation (7th February to 22nd February, 2005), and the inception of Financial Bids for Apapa and selection of preferred bidders, tenth March, 2005. The pri mary objective of concession arranging is to transfer investment costs from the government to the private sector. It is further envisaged to inject private sector efficiency, independence and discipline into the gist and off loading of ships at our terminals, sequence ports perform marine and technical reverting functions. The ultimate goal is to make the port system extremely efficient and cost effective.These led to the invitation of bidders in December 2003 and 110 applications were received slice 94 of the applicants were pre -qualified and issued bid documents. Most of the terminals were handed over in 2006 with NPA expectedly playing the following roles port planning, licensing and control, port development, technical regulations, marine services and channel management. Within the context of concessioning is the role of Terminal Operator defined as port operations and services (carrying out terminal operations and marine services as a covetousness except pilotage), port labour (employing and paying port labour, providing training, clothing, Medicare and social security, safety and pension) and investment and maintenance in superstructure and equipment.The Terminal Operators are large independent companies with concessions from the Port Authority for a period sufficient to pay back the investments (at least 10 yrs). Terminal Operators are selected on the basis of transparent international bidders. The Terminal Operators pay a concession fee to the Port Authority based on the use of the land and infrastructure and the volume of operations. The Concessionaires are responsible for all terminal operations such as stevedoring, shore handling etc. They maintain direct contacts with the shipping lines without interference from the Port Authority, but operate within the ambit of extant registration. They are equally responsible for the security, liability, insurance and safety in the concessioned area. TABLE 1 heed OF TERMINAL OPERATORS S/N Companys Name (O perator) Location 1 APM Terminal Limited, Apapa, Lagos 2 ENL Lagos 3 Five Star Lagos 4 TICT Lagos 5 J/DAM Lagos 6 PTML Lagos 7 ABTL Lagos 8 P.CARGO Lagos 9 GDNL Lagos 10 BOP Lagos 11 IBAFON Lagos 12 lister Lagos 13 F/W Lagos 14 CAPITAL Lagos 15 FATGBEM Lagos 16 RAJ Lagos 17 EKO SUP Lagos 18 NOJ Lagos 19 IJORA Lagos 20 EML Lagos 21** Including 15 other companies operating outside Lagos namely Calabar, Port-Harcourt, Warri, Onne etc. consultation NPA 2009 2. 4Performance Evaluation of Private Sector lodge in Maritime Industry However, ports do not exist for their own pursuit or as mere conduits of trade, but are expected to exert a developmental impact especially on their hinterlands. To be sure, a port has several hinterlands stretching from the port itself to as far as transport links and competing outlets permit. plot the proximate hinterlands are likely to be captive to it, other areas may be contested by other ports depending on their differential a ccess to transport facilities. Specifically, port and regional development has been pursued through developer ports, created in depressed regions as a catalyst of industrial and urban development (Olukoju, 2004). A critical issue that is germane to this study is the potential of ports as growth poles. Do ports really generate development in their immediate or remote hinterlands? If so, what accounts for this or under what conditions can this it achieved? If such condition(s) is/are known, how can the developmental impact be optimised? In any case, what criteria should be employed to measure the developmental impact of ports and how reliable are they?With regard to the touchstone of the economic impact of ports, the Canada Ports Corporation once developed a computerised Economic pretend Model, which sup posely measures the economic benefits of the freight handling activities of Canadian ports on the local, provincial and national economies and provides a realistic and defensible e stimation of the economic contributions of the ports (Tessier, 1991). This assertion was based on certain observable results. Canadian ports were describe to have generated jobs (direct and indirect), revenue, and personal income quantified in billions of dollars, which derived from port and related activities. Barely four years and some months, perhaps to all believers set about of the port reforms and concessioning programmes, the ports are in topsy-turvyness, throwing up a nightmarish pains, losses as well as rip-off that is cripple the national economy. Today, the concessionaires are in plight as the raise issues of hope and prospects are nowhere near.Congestion, high cost inefficiency and chaos are now the order of the day which constitutes a great setback. There is a heavy problem of discharge of container while cargo di interlingual rendition to neighbouring ports in West Africa region has taken the shine off Nigerian ports, which its supposedly aim of being the hub fo r international trade and freight is yet to materialised. Investigation shows that more factors are responsible for the debacle which is most noticed in Lagos ports which account for over 65 per cent of total imports into Nigeria and others in the eastern part of the country especially the Onne base ports largely under the management of Intels Nigeria Limited.Apart from short(p) and ill-equipped cargo handling plants, the much desired quick release of cargoes at the private terminals is yet to be actualised moon to operators and port users, the problems are too much that Nigerians on the street have started challenge the rationale for concessioning or dashing of the ports to the private operators or monopolists. Since the year of independence in 1960, there has always been a tug-of-war between policy of pre-shipment inspection and that of destination. As at January 2006 and the time the concessionaires took over the management of port operations as private terminal operators de stination inspection as a policy was re-introduced for the third time.Following agitations and complaints by the freight forwarders about operational lapses, inefficiency and cheating(prenominal) business practices which grew to the point of an ultimatum of withdrawal of services at the ports, the Ministry of Transport was forced to set up a committee to look at the grievances and operational challenges. The committee or task force was given six point terms of reference that include to arrest the inadequacies and availability of plant and equipment at the terminals, demonstrate the clearing and port documentation process, secernate and abrogate excessive/duplicated charges. Others are to look the suitability of the working environment underwrite the implementation of world best practices in the Nigerian ports and tackle any other issues that may arise in the course of the sub-committee assignment.The committee in its interim hatch observed that there are many port operationa l constraints that exist in many facilities and at different levels. The issue of stacking pattern for containers was observed not to be done in accordance with internationally accepted standards for ease of operation. Putting APMT on the spotlight of performance evaluation, study shows that there are too many blank containers found to be stacked at the quay apron for more than eight (8) days and that the terminal operator have a every week stacks of up to 4,800teus and weekly evacuation of about 1800teus. This is wholly responsible for the long queue of trailers that caused traffic jams in Apapa and to the port entry point.The on and off stories of congestion which have characterised the concessioned ports since inception are observed to be caused by the greed of the concessionaires as it alleged that they make more money when cargoes are delayed in their terminals. According to the Manufacturers standstill of Nigeria (MAN), many Nigerian importers and manufacturers are closing shop in protest against the countrys port system, as they cannot continue to import wares through the ports with debts overtaken their business, they therefore have sought relief, time and cost saving opportunities offered at the ports in the other west African countries of Benin Republic, Togo, gold coast and Cote dIvoire.Study reveals that rather than saving $2. 5 billion from mere coming on stream of the port concession arrangements as well as experiencing an operating cost cut down of between $65 million to $80 million and port users saving some $70 million to $100 million yearly, Nigeria as at today lost quantitative billions of dollar which translates to over N20 trillion (Chigbue Irene, 2010). Though the industry is projected to provide well over 10,000 jobs yearly with the capacity of employing 50,000 Nigerians (Omatseye, 2010), the promised job opportunities have turned to job doomsday as many importer and agents as well as dockworkers have lost their jobs and businesses as the case maybe.These loads of problems as being experienced within the concessioned port sector hinged on lack of legal frameworks setting the port concession exercise which regrettably made the concessionaires to take advantage of implementing the illegality of exploiting importers. The era of port concessioning has further thrown security issues capable of threatening national defense and safety of lives (Abati, 2010). In the Apapa port, it has been made clear that the arms cargo arrived at the port in July 2010. The frequency with which suspicious materials are now being reported along Nigerian routes and in many of the cities is frightening. Given Nigerias weak national security infrastructure the situation could be worse and the evidence is writ large in spread of criminality and violence in the country and the seeming ineffectiveness of the bear on state agencies.Granted that the administration has often tried to address the challenge but what is exposed in every exempl ify is the absence of a well thought-out and managed national security framework, unfortunately, security is one of the skipper concerns of government, and where this fails, there are serious implications for national stability. CHAPTER THREE RESEARCH METHODOLOGY 3. 1Introduction This region is directed at defining the research spirit, characteristics of the population, sample size and sampling techniques, sources of data, purpose and administration of questionnaires, techniques for data analysis, and limitation of the research methodology. The research method used in this study is as relevant as the research work because it forms the basis upon which the research is written.This chapter goes together to describe the method used in the data collection and sort of questions for data analysis. 3. 2Re-Statement of Research Hypotheses For emphasis, and to have holistic view of the researchs objectives vis-a-vis the methods and techniques used in analyzing acquired data, the researc h hypotheses forward set are herewith restated H1 Federal government initiative at engaging the private sector companies in the management of the countrys ports has positive impact on revenue generation for socio-economic development. H2 Private sector participation in the maritime industry has positively enhanced human capacity and infrastructural development of the nations ports and the entire maritime industry.H3 The involvement of private sector in the management of the countys ports and associated sector has boost employment creation with attendant positive impact on the livelihood of an average Nigerian. 3. 3Research Design The research design chosen for this study is the non-experimental (personal) survey and coefficient of correlation design because the study focuses on the respondents attitudes to the research problem while attempting to establish the degree of relationships between independent variable in this case maritime industry performance and the dependent variable s operational efficiency of the terminal operators. 3. 4Population of Study and Sample Size The population for this research study comprises of various but overcarefully selected practitioners/operators in the industry.The core practitioners include officials/staff (civil servants) working in various Ministries, Departments and Agencies/Parastatals (MDAs) of government overseeing and regulating the activities of the terminal operators and the ports in general. These include NIMASA, Nigeria Port Authority, Nigeria Shippers Council, Nigeria Custom helper and Nigeria Navy. Thereto, independent (private) sector operators such as freight forwarders, ship owning firms, legal practitioners (maritime lawyers), journalists, and importers/exported cadaverous from different associations and corporate organizations viz Nigerian Association of Government Approved Freight Forwarders (NAGAFF), autochthonal Shipowners Association of Nigeria (ISAN), the Nigerian Chamber of Shipping (NCS), Mariti me Reporters Association of Nigeria (MARAN), Maritime Lawyers and Arbitrators of Nigeria (MLAN).In view of the vastness of the population for this study, a sample size of 150 respondents consisting of people that were randomly selected from the above organizations/bodies was served questionnaires. Only 100 returned questionnaires were considered valid for use/analysis as fifty (50) were either badly fill or not returned. However, the size be and the returned questionnaires represent reasonable percentage of the total population of the study to whom questionnaires were distributed for the purpose of data collection which could allow for better generalization of results after necessary analysis. 3. 5Sampling Techniques The sampling technique used for this research work was random sampling for different respondents of the selected organizations/bodies in the study area.This technique prevented any form of biases, and provided for fair and equal opportunity to all respondents identif ied for this research study to freely express their views of the foregoing subject matter. The survey research design was used to investigate the respondents opinions on the research problem. 3. 6Sources of Data Collection The information required for the successful execution of this project was obtained from two sources viz primary and secondary sources. The primary sources included the use of structured questionnaires and oral interviews/personal observations as made by the researcher while secondary sources included data and information collected from textbooks, journals, magazines, newspapers, neat papers, the Internet and unpublished works. 3. 7Questionnaire DesignThis research employed the use of structured questionnaire to see primary data from respondents. The questionnaires consist of two (2) sections. dent A contained six (6) items which emphasized on the characteristics of the respondents (bio-data or personal compose). Section B of the research legal document has twe lve (12) items which were designed to provide answers to the questions raised in the study and to test the hypothecate hypotheses. And consistent with Hamilton (1997) and Patry et al. (1999), a 5-point Likert scale, was used to measure the extent to which each respondent agrees and/or disagrees with any statement as contained in the questionnaire.The statements were concise and comprehensive enough to aspire home the points of the research aim and objectives in simple and understandable language and also allowed for good responses from the respondents with the view of capturing the essence of the topic. 3. 8Standardization of Research Instrument The research puppet was tested for content validity to determine if it could measure what it was intended to test. In order to achieve this procedure, the questionnaire was reviewed by the an independent research equip with bias in maritime policy development and operations, and other seasoned professionals in industry to assess technica l terms, brighten ambiguous statement and comment on the obvious validity of each item.The internal consistency of the items as contained in Section B of the questionnaire was tested for dependability using Croncbach Alpha method with other ready(prenominal) functionalities of the SSPS software product megabucks. The overall result of the 12 items on the research instrument clearly shows that the designed questionnaire was valid for the conduct of this study as the reliability coefficient of 0. 8636 was obtains which tends to 1. 3. 9Questionnaire Administration The questionnaires were distributed to all the respondents identified for this study in all the selected organizations who expectedly conveyed their opinions by providing fair and unbiased responses to the statement.A total of 150 questionnaires were administered through personal efforts by hand delivery of hard copies and through the internet as tie file sent to the recipients/respondents e-mail addresses followed by pho ne calls to confirm receipt of same. The cost of mailing was financially irrational as retrieving answered questionnaires may be catchy to achieve while the needed thoroughness in the analysis and presentation of data may be compromised and jeopardized. Of the total 150 questionnaires distributed, 124 were returned fill while 26 were not returned by the respondents. Upon careful examination of the returned questionnaires, only 100 were considered useful and adequate for thorough analysis as 24 were either badly filled as represented in the following graphical (pie chart) illustration. pic 3. 10Techniques for Data AnalysisFor the purpose of thorough analysis of the data collected for this study a conventional reliability rate of 95. 0% with a sample error of 5. 0% was allowed using version 10. 0 of the Statistical Package for kindly acquaintances (SPSS) program and Microsoft Excel in treat the data. Inferential statistical method was used to present data in relative frequency Ta ble and Simple Percentage. The used of chi-square (x2) was adopted to test formulated hypotheses. 3. 11Limitations of Research Methodology The research of this scope cannot be carried out without facing one or two constraints. Time posed a serious challenge as research appointments in most case coincided with academic lectures and work demands at office.The seemingly reluctance of some respondents in filling the research instrument designed to collate data posed yet another challenge especially among top-ranking officers of NIMASA, NPA, Customs and APMT staff. Resource materials needed for necessary deskwork were not readily available. Handling the SPSS package posed yet a great challenge in terms of analyzing and interpreting the data as there was no firsthand experience of its usage. Financing this project in term of logistics associated with this research work almost marred this academic pursuit. However, efforts were made to put these challenges under control through effective a nd prudent use of available, nay limited fund, thus the emergence of this work in its present form.As regards the apt and theoretical arguments, critics have expressed doubts about the reliability and propriety of this kind of performance evaluation. Some contend that port impact studies of this kind were designed by port authorities to justify or attract port investment. Others argue that it is misleading to refer regional development to the ports, which are only one element in a large number of producing and distributing systems which generate economic changes in a given region (Goss, 1990). It may also be noted that accurate quantification of the regional impact of ports is difficult to achieve in the face of the diffusion (that is, of origins and destinations) of port traffic beyond the constringe confines of a region or nation (ibid 216).Whatever reservations that one may have about the reliability of the quantification of the social and economic impact of ports and their al lied industries on the adjoining cities and regions, it is hardly debatable that port activities and shipping generate employment, and induce industrial enterprise and overall economic growth. The striking example of Maritime Industrial Developments Areas (MIDAs) in post-Second World War Europe aptly illustrates the spacious growth-pole potentials of ports. Even so, it must be conceded that there is a symbiotic relationship between the port itself, on the one hand, and the port-city and port-induced industries, on the other. Economic boom or stamp in either a ports forelands or hinterlands immediately affects the port and the silting of the port or the loss of its comparative degree advantage to rival ports would be reflected in the fortunes of its hinterlands, particularly those that are dependent on it. CHAPTER FOURDATA PRESENTATION, ANALYSIS AND interlingual rendition 4. 1INTRODUCTION This section is designed to present and crumple data used for this research study. With the aid of computer based application software packages Statistical Package for Social Science (SPSS) version 10. 0 and Microsoft Excel (2007), data generated through the administered research instrument (questionnaire) were canvass at the conventional 95% level of confidence. To further validat