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Business & Finance | Dec 19, 2004

Stevedoring companies gear up for competition from Jan. 1

GNA

Tema, Dec. 19, GNA - The Ghana Ports and Harbours Authority (GPHA) has released modalities and procedural policies to ensure the smooth implementation of competitive stevedoring operations scheduled to re-start at the Tema and Takoradi ports from January 1, 2005 The "Free For All System", which would replace the quota system, would allow ship owners and their agents to select any of the nine stevedoring companies to load and/or unload their cargo without being imposed on them.

Mr Gordon Anim, Director of Ports, GPHA, told the GNA in interview that the modalities cover issues such as tariffs, royalties, performance monitoring mechanisms, punitive measures against long berth occupancy. GPHA, he said, had invested in equipment, spare parts and training of staff to strategically position itself to thrive in the competitive era.

It had also initiated negotiations with shipping companies and agents to secure jobs.

"We have geared ourselves up for the new system because, unlike the quota system, which guaranteed a company at least one vessel a week, your ability to secure a job depends on your productivity and efficiency," he remarked. "You have to impress a ship owner to get a job."

Mr Anim said GPHA was only awaiting the announcement from the Ministry of Ports, Harbours and Railways that the free-for-all system would commence as scheduled, adding that Ghana appeared to be the only country operating the quota system.

No formal protest has been received in recent times from stevedoring companies against the reintroduction of the system, whose implementation was met with protests from stevedoring companies who wanted the maintenance of the status quo, the quota system. The Ports Director gave the assurance that GPHA would maintain its neutrality and ensure that its berthing policy did not adversely affect any company. GPHA said it would also strengthen its supervision to avoid discriminatory practices by shore handling operators. Meanwhile, the Ship Owners and Agents Association of Ghana (SOAG), the direct beneficiaries of stevedoring, has hailed the move to reintroduce the free market system as scheduled, saying the competition would promote efficient and quality service delivery.

Ms Perpetua Osei-Bonsu, Executive Secretary of SOAG, told the GNA that the Association was relieved that its several petitions against the quota system, which undermined productivity and efficiency, had been heeded.

Experts say the Free-For-All system would lead to a substantial reduction in berthing costs as turn around periods for ship would be faster. As the cost of loading cargo reduces, Ghana would become an attractive destination in the shipping world.

However, under the current system, Ms Osei-Bonsu said, ships could be unduly delayed by companies, which lacked the resources, equipment and competence for proficient operations.

"The quota system denies us our right to choose the companies that would load and unload our ships, thus leaving us at the mercy of the stevedoring companies, our clients," she complained.

"But from January 1, we would be able to freely select the most efficient ones to best serve our needs and reject the incompetent ones," she said.

The competitive system would also afford us the opportunity to negotiate with companies, build fruitful business relationships and loyalty, she said.

Ms Osei-Bonsu said it was unfortunate that the free-market system was suspended only after a month's operation when it was introduced in January last year. "If it had been allowed to run, we would have overcome the teething problems by now."

The Government introduced the "Free For All System" last January, after three postponements, as part of efforts to encourage competition for increased efficiency in the provision of services at the ports.

However, the system was suspended following protests from some stevedoring companies whose performance and equipment position prevented them from getting vessels.

Under the quota system, stable jobs are guaranteed for the stevedoring companies, including GHPA, as they are allocated specific percentages of port traffic, irrespective of their performance ratings. Ms Osei-Bonsu expressed the hope that companies would be ready to compete for jobs having been given two years to prepare and better position themselves for an open market system.

Prior to 2002, GPHA, Atlantic Port Services and Speedline were the only companies licensed to undertake stevedoring operations. But from 2002, six new companies have been licensed to join the business.

They are Express Maritime Services, Golden Gate Services, Carl Tiedemann Stevedoring, Odart Stevedoring, Dashwood Stevedoring and Fountain View.

GPHA, which earns about 70 per cent of its revenue from stevedoring, said to be the most lucrative service at the port, is allocated 25 per cent of current traffic, with five of the companies getting 10 per cent each. Two other companies receive five per cent each, while one of the pioneer companies gets 15 per cent.

The companies were all granted one year operating license on allocated quotas with the understanding that the quota system would be abolished on 1st January 2003 to allow free competition in line with the Gateway Programme, which aims at making the ports the model port hub in the sub-region.

However, the process has been stalled by four postponements of the abolishing of the quota system to give some stevedoring companies the opportunity to resource themselves for the competition. Last year, the port handled a total of 7.4 million metric tonnes of cargo with 800,000 tonnes being transit goods for C=F4te d'Ivoire.

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