Uneasy calm at Tema Port over operation of container terminal in July

There is an uneasy calm at the Tema Port over possible job losses following a notice served by the Ghana Ports and Harbours Authority (GPHA) that some inland container depots (ICDs) will no longer receive consignments when the new Terminal Three (T3) project is opened for business in July this year.

The GPHA, on January 11, 2019, held a meeting with ICD operators to discuss, among other things, how the new terminal being developed by Meridian Port Services (MPS) on a public/private partnership basis would be operating.

It was gathered that terminals such as Africa Coastal Services (ACS), Overseas, Global, Tema Bonded Terminal (TBT), BMT Container Freight Station and the recently licenced operator, Amaris Terminals, had all been asked to either fold up or develop new business models.

The meeting, according to sources privy to it, was occasioned by the government’s inability to review the concession agreement which has vested so much operational concession in MPS to operate the inland container terminals.

The stakeholders, including the Tema Port itself, fear that once the ICDs do not have consignments, it will lead to job losses.
A source at the Tema Port told the Daily Graphic that the port would lay off a minimum of 1,200 workers.

Although the government, through the GPHA, holds a 30 per cent stake in the T3 project, checks indicate that it will not receive any dividend for the next 10 years.

Committee

An inter-ministerial review committee was set up by the government in January 2018, headed by a Deputy Minister of Transport, Mr Daniel Titus-Glover, to assess the proposals submitted by the GPHA for the review of the 35-year concession agreement.

Sources said although the committee presented its recommendations to the government in February 2018, a White Paper was yet to be issued on the recommendations.

When contacted, Mr Titus-Glover said the committee recommended a review of the entire work done because it was not in the interest of the GPHA and the country.

"This was an amended agreement signed under the previous government, it is a bad deal for the port and the entire country and our hope is that we can correct the wrongs," he said.

Contract agreement

The deed of amendment, which has been sighted by the Daily Graphic, grants the MPS the exclusive right to handle eligible vessels such as full container vessels carrying 200 twenty equivalent units (TEUs) or more, a situation many industry players claim has priced Ghana out of the arrangements.

Similarly, provisions in the agreement give MPS the right to charge and retain all payments made in respect of vessel dues, as well as berth occupancy charges.

The agreement further grants MPS the right to charge and retain port dues until discharge date of all the concessionaire’s obligations under the financing agreements, as confirmed by the lenders.

“As such, 90 per cent of the dues retention goes to MPS, while the GPHA has a 10 per cent stake from year one to the 10th year," it states.

Sources at the Tema Port said the provisions would result in the GPHA losing out all container vessels to MPS, leaving it with only roll on, roll off (Ro-Ro) vessels which often had limited carrying capacity.

“The implication of these is that the volume of containers handled by the GPHA by way of stevedoring will decline from 92,539 TEUs to 37,294 TEUs for 2019/2020, a situation which will result in a reduction of revenue from containers from $10.68 million to $4.22 million,” the committee’s report sighted by the Daily Graphic posited.

The committee, therefore, recommended a renegotiation of the agreement to raise the limit of vessels to be handled by the GPHA in Terminal Two (2) to 800 TEU from the less than 200 TEUs proposed in the deed.

“This will ensure that the GPHA and the numerous stevedoring companies will have some amount of containers to keep them in business,” it said.

The report also expressed the apprehension that container shore handling revenue would be halved, from the present $38.75 million to $17 million by 2020, while royalty revenue from MPS operations would also see a massive decline from $24.12 million to $6.57 million for the 2019/2020 operational year.

“If this agreement is implemented unchanged, the GPHA will be in financial crisis by 2020 and may be prompted to do away with idle labour, as space and equipment may not be able to generate enough revenue to pay salaries, service existing loans and develop basic statutory port infrastructure,” the report stated.

Meeting

“The Tema Container Terminal (TCT) and the APM Terminals, which are affiliates of the Bollore Group, also involved in the project, would, however, not be affected by the operations of the new terminal,” some sources said.

The January 11, 2019 meeting, chaired by the acting Director-General of the GPHA, Mr Michael Luguje, asked the affected ICDs to withhold the renewal of their operational licences.

However, a letter dated January 17, 2019 and addressed to all the ICDs, a copy of which the Daily Graphic has sighted, asked the operators to go ahead with the renewal, although they would not be allowed to receive any containers from July.

“Kindly note that the port will cease to transfer containers to the ICDs when Terminal 3 commences operations in July 2019. Notwithstanding, the ICD licence shall be renewed for a full year,” the letter stated.

It added that the renewal was to allow the ICD operators to continue to handle containers that would remain on their terminals after the commencement of operations of the new terminal.

Representatives of the ICDs the Daily Graphic contacted declined to comment on the issue, except to say that the GPHA had asked them to furnish it with their staff strength.

GPHA

The General Manager in charge of Marketing and Public Affairs at the GPHA, Mrs Esther Gyebi-Donkor, confirmed to the Daily Graphic that the authority had held a meeting with the ICDs to sensitise them to consider other opportunities, since the commencement of MPS Terminal 3 would mean redundancy of the container terminals.

“The ICDs will have to decide, since the GPHA would also have to deal with over capacity of labour at its end,” she said when asked about the impact on the labour force at the port.

Mrs Gyebi-Donkor added that “Since our operations will reduce drastically, we at the GPHA also anticipate some idle labour, equipment and space which are likely to affect revenue generation. But the authority is strategising on how to retain some of the operations and also diversify to help the GPHA to survive.”

Writer’s email: delarussel@gmail.com