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Response to articles: Ė Independent Observer 23rd May 2012 ďWhose Interest is Mr. Abu Bangura of NCP Serving? and For di People 23rd May 2012 ď NCP Chairman Accused of Clandestine ActivitiesĒ
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May 28, 2012, 14:00
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PRESS RELEASE BY THE NATIONAL COMMISSION FOR PRIVATISATION (NCP)


Response to articles: Ė Independent Observer 23rd¬†May 2012 ďWhose Interest is Mr. Abu Bangura of NCP Serving? and For di People 23rd¬†May 2012 ď NCP Chairman Accused of Clandestine ActivitiesĒ¬†

 

NCP would like to address the inaccurate statements made in the above newspaper articles which are both misleading and defamatory to both the Chairman and the Commission


The award of contract to Bollore was done in a transparent and fair bidding process and the evaluation of the bids was done by an evaluation committee comprising of various stakeholders of which the NCP Chairman took no part. The contract, negotiated and signed with Bollore has been commended by the International community and is seen as one of the best Ports privatisation contract ever signed. Details of the Ports contract (as with other NCP contracts) have always been made available to the media and public and this has been evident in the press articles during the signing of the contract and the handover to Bollore.


All proceeds received by NCP are paid into the Consolidated Revenue Fund (CRF) and to date Bollore has paid in excess of $10m (ten million dollars) to the Government of Sierra Leone. SLPA receives income from throughput fees from the operations of Bollore. In the first two years there will be a total investment of $20m in civil works and equipment in the Ports and this will be evident with the delivery of cranes and other machinery within the coming weeks. During the entire 20years concession the total investment for both civil works and port handling equipment will be in excess of $122m.

 

The Ports Authority is not bankrupt and has no difficulties in paying staff salaries. Recently the Ports paid end of service benefits of over $5m to several employees as part of the retrenchment programme approved by Cabinet without recourse to public funds.

 

SLPA currently has surplus funds to operate and manage the business as a Landlord Port brought about by the restructuring and privatisation undertaken at the Ports.

 

Break Bulk Ė a competitive bidding process was conducted and Bollore was the successful bidder and awarded the licence for break bulk cargo for a period of 10years, with a second licence to be issued to another operator after certain volumes have been exceeded or after 5yrs, whichever comes first. The objective was not only to enhance efficiency in port operations but also to allow private companies to invest in much needed port handling equipment (previously leased by SLPA at a much higher price from private companies) and to ensure personnel are well trained in line with standards of the sub-region. Some of the current challenges at the Ports include and not limited to the followingÖ.


-       Short-landing of cargo; whereby cargo is off loaded without documentation

-       Insurance claims arising from activities and seizure of ships with court cases resulting in huge sums of compensation

-       Under declared break bulk quantities imported with resultant loss of revenue and taxes due to SLPA and the Government

-       Extremely low charges negotiated by importers with SLPA resulting in lower labour rates as compared to the sub-region while the selling price of these items remains high.

 

The effect of all the above means that importers continue to generate revenues with high profits at a lower cost base without reflecting the lower costs to the end consumers, so itís clear to see why the importers would be resistant to change.

 

The Commission has continuously engaged all stakeholders including the importers to discuss the new concept of the break bulk licence and the future development proposals at the Ports but to no avail, as the importers have been consistently absent at meetings. The charges referred to by the importers are SLPA 1997 rates (harbour dues, stevedoring and shore handling charges) which are not reflective of the present day market cost. These extremely low charges have resulted in importers paying more for offloading and packing bags of rice into the warehouse from the delivery vehicle than what they would pay to SLPA for port handling charges, hence the poor state of the Ports and the lack of income to invest and operate a modern day Ports that is of similar standards to the sub-region.

 

It is indeed unfair and short-sighted to blame high prices on the Concession of the Ports. Basic economics would tell us that there are other micro and macro economic factors that have led to high market prices and not the operations of the ports. Privatisation has brought in proper structures, systems and transparency which are good for the Government and people of Sierra Leone as it brings in efficiencies, savings and much needed income.

 

The airport security charge Ė Once again an International Competitive Bidding process was conducted with all stakeholders involved in the evaluation process. SLAA has issued information to the media relating to the security equipments and systems which would enhance and make our airport compliant with International security standards, attract more airlines to commence operations and reduce insurance costs. Security charge is not unusual and in comparison to other airports in the sub-region, the rates are very competitive and lower in some cases.

 

This was a difficult decision for both the airport and civil aviation authorities and several other options were explored in consultation with all stakeholders. 


The Commission has been successful in its role - reforms, privatisation and supervision of public enterprises and continues to work with Government, Public Enterprises and other stakeholders in transforming public enterprises and bringing much needed efficiencies and benefits to the Government.

 

We ensure that in all negotiations (through the leadership of the Chairman), NCP negotiates from a position of strength and technical competence to derive an equitable agreement that will provide long term.


© Copyright by Awareness Times Newspaper in Freetown, Sierra Leone.

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