INFRASTRUCTURE FINANCING AND MANAGEMENT: THE IMPACT OF CONCESSION ON THE OPERATIONS AND PERFORMANCE OF NIGERIAN SEAPORTS

ABSTRACT

Using pre- and post-privatization data, this paper investigated the effect of privatization on the performance of Nigerian seaports. A Mann-Whitney Wilcoxon (MWW) test was used to analyze secondary data on two major port operation indices (average berth occupancy and average turn-around time). The analysis revealed that the average berth occupancy and turn-around time increased from 51.35% to 72.47% and 8.18 days to 4.83 days, respectively. At a 0.05 level of significance, it was also discovered that the concession of Nigerian ports has significantly improved average berth occupancy and average turnaround time of vessels calling at Nigerian ports. The study emphasizes the importance of creating an enabling environment through the development and implementation of effective policies as a means of ensuring

The concession model performs optimally.

1. introductory 

Maritime activities may be regarded as a lifeline for any developing economy. In the international exchange of goods, shipping has become the most efficient mode of transportation. The most cost-effective way to transport bulk goods over relatively long distances is by sea. This is further aided by technological advancements, which have resulted in more efficient, dependable, and demand-oriented transportation systems. Over 90% of global trade is estimated to be carried by sea [1]. This reflects the degree to which international trade transactions rely on shipping for the movement of goods.

Port reforms are government policy measures aimed at increasing port efficiency and productivity by revitalizing and strengthening operational and functional modalities.

in the ports [2]. Port reforms in Nigeria were designed to make Nigerian ports more user and investor friendly, resulting in smoother port operations.

The Nigerian government chose the port concession reform model, in which the government retains ownership of the infrastructure while contracting out management and operation of the facilities to the private sector on a competitive basis for a set period of time. According to Bousquet and Fayard [3], a concession arrangement is one in which the government (or her agency) grants a private sector operator the right to fund, build, own, improve, upgrade, maintain, or operate a public infrastructure and charge users for the cost of services for a limited period of time. The official

The Infrastructure Concession Regulatory Commission Act (2005) appears to contain a view on concession in Nigeria, where concession is defined as:

a contractual arrangement in which the project proponent or contractor undertakes the construction, including financing, of any infrastructure, facility, and its operation and maintenance, as well as the supply of any infrastructure’s equipment and machinery and the provision of any services [4].

Concession in port operations refers to the leasing of port terminals and the reorganization of stevedoring companies [5]. The contractual agreement embodies service criteria and specifies the technical qualities and practices that the concessionaire is expected to provide. Perhaps it is the government’s remaining stake in the venture that motivates the government to ensure that her policies are followed.

[6] mentions implementation in both technical and social terms.

Improving port efficiency or productivity appears to be the primary driver of port concessions in Nigeria. This objective’s level of achievement, however, has yet to be determined. As a result, the purpose of this paper is to assess the impact of the reform by examining the major indices of port operations performance in the port. This effect would be determined by:

a. investigating the impact of port concessions on cargo berth occupancy in Nigerian ports

b. investigating the effect of port concessions on the turnaround time of vessels calling at ports, and

c. making conclusions and recommendations based on research findings

This study only looks at the effects of concession on two variables.

Major port operation indices (average berth occupancy and average turnaround time) in Nigerian ports from 1995 to 2012. The ways in which concession has improved the efficiency of services in Nigerian ports have been highlighted, with recommendations capable of assisting in the realization of the exercise’s aims and objectives.

Several studies, including [7, 8, 9, 10], have investigated the concept of privatization and how its application in seaports has increased competitiveness and efficiency; however, these have not been specific to Nigeria. This study will add to previous research by determining the impact of privatization (port concession) on average berth occupancy and vessel turnaround time in Nigerian seaports.

 

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