Anxiety heightens at Tema Port as MPS demands 11% increase in handling charges

Demands for tariff increment by the Meridian Port Services (MPS) from the Ghana Ports and Harbours Authority (GPHA) are heightening tension over the operationalisation of the new terminal facility, come June 28, 2019.

The MPS, which, per a concessionaire contract signed in 2015, is expected to take over the operations of the Tema Port, is asking the GPHA to adjust container handling charges by 11 per cent.

Anxiety among port workers was raised by a letter from the MPS addressed to the Director General of the GPHA, Mr Michael Luguje, a copy of which the Daily Graphic sighted, asking the authority to grant an 11 per cent increment in port tariffs, including marine, cargo and terminal charges, to reflect provisions in the concession agreement and contract, after having earlier slapped a 9.1 per cent increment on handling tariffs on port users.

The letter, signed by the Chief Finance Officer of the MPS, Mr Sunil Bansal, on May 24, 2019, said the tariffs for the new terminal had been drawn in line with the provisions of the deed of amendment of June 12, 2015 and would, therefore, want the GPHA to grant the request within the schedule clauses of the original concession agreement.

The tariffs cut across container handling charges, vessel berth charges and other port user fees.

Some port users said when implemented, it would increase the general cost of doing business at the Tema Port.

MPS

In the letter, the MPS argued that considering that the new terminal would become operational on June 28, 2019, the request ought to be granted early to enable port users to become accustomed to them.

Similarly, it said, the granting of the remaining percentage was to enable the company to begin to recoup its investments.

While the players have questioned the timing for the tariff increases in the wake of moves by the government to review portions of the agreement, the Chief Executive Officer (CEO) of the MPS, Mr Mohammed Samara, maintained that the proposal was a matter of discussion between the company and the GPHA.

“Honestly, I don’t think it is appropriate to discuss this while the issue is being discussed with the GPHA,” he said in a terse response to the Daily Graphic when it sought clarifications on the issue.

Background

The MPS contract detailed up to 20 per cent increment in container handling tariffs when the new terminal, Terminal 3, opens for business.

Workers of the GPHA say the concessionaire has to wait for action from the Office of the President on their call and that of organised labour for a review of some aspects of the agreement.

The MPS is already test-running the new terminal, with refrigerated import facilities being tested with several containers positioned on them as of Friday, June 7.

With this new terminal, the GPHA’s 800 20-equivalent unit (TEU) refrigerated facility (Reefer Yard) may also be heavily affected, leading to a reduction in the revenue generated by the port authority. 

GRA

The Commissioner General of the Ghana Revenue Authority (GRA), Mr Kofi Nti, has also written to the MPS and the Tema Command of its Customs Division, directing that no container should be made to leave the new facility from July 1, 2019 without the payment of import duties.

The directive, players within the port space explained, effectively stopped the transfer of boxes (containers) from the new facility to the GPHA’s Golden Jubilee Terminal (GJT) for devanning (unstuffing of content), as well as other Inland Container Depot (ICD) terminals for the purposes of storage. 

MDU

The leadership of the Maritime and Dock Workers Union (MDU) questioned the rationale behind the action by the MPS, saying that tariff amendments ought to go through consultations with the relevant stakeholders.

According to the union, the setting of rates for the country’s ports was a regulatory function exercised by the GPHA, per  PNDC Law 160 of 1986 which guides the building and operationalisation of ports.

The General Secretary of the MDU, Mr Daniel Owusu-Koranteng, told the Daily Graphic in Tema over the weekend that the decision was disappointing, particularly as the government had made commitments towards the review of parts of the concession agreement which allows the MPS to set port tariffs and also handle about 95 per cent of all containerised imports calling at the port.

“We have always maintained that the exercise of regulatory function by the MPS under the concession agreement for the Terminal Three facility undermines the laws of Ghana,” he said. 

He also pointed out that the increase being demanded by the MPS, if granted, would increase the cost of doing business at the port and thereby defeat the government’s objective of reducing the cost of doing business there.

He said since January when the GPHA wrote to inform independent container depot operators to prepare to either fold up or devise new business strategies, about 50 workers with those operators had been laid off.

In the view of Mr Owusu-Koranteng, the operation of the new container terminal by the MPS would affect the living conditions of Ghanaians negatively, saying: “The government, as a matter of urgency, ought to speed up with any processes for some renegotiated terms if it has started anything to that effect.