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Company News on Friday, June 7, 2019
Source: clbadfmonline.com
2019-06-07
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Freight forwarders in the port of Tema, Ghana, oppose a proposed 10.9% increase in port tariffs by Meridian Port Services (MPS).
Mr. Johnny Mantey, Vice President of the Institute of Freight Forwarders of Ghana, said, "I am shocked and I want to believe that this is not true. I do not even know what kind of tariff lines were increased by 11%. I think the timing is very bad.
Oheneba Akwasi Afrawua, president of the Association of Freight Forwarders and Affected Traders, also told the media: "We expect MPS to maintain the existing rate. Why are they rushing? They are 35 years old to operate the port. They can make a profit in 10 years.
MPS, the concessionaire responsible for the Tema port expansion project, wants the price increase to coincide with the opening of the Port Terminal 3 facility, ClbadFMonline.com, collected from preferred sources within the company .
After the project, the Port of Tema will be West Africa's largest freight port with a capacity of 3.5 million equivalent 20 feet (TEU) per year.
The MPS management said in one of its many correspondences with the upper hierarchy of the Ghana Ports and Harbors Authority (GPHA) – of which CopF was spotted by ClbadFMonline.com – that the proposed tariff increase was "duly negotiated, accepted and included ". in the concession agreement, which was the basis of its investment 'in the port project in the first place.
MPS, which owns 70% of the project while GPHA owns the remaining 30%, insists that "delaying the implementation" of the new tariff would have a "catastrophic impact on the company's cash position and its contractual commitments with third parties ".
"The concession contract tariff should not be broken," said in a correspondence from MPS management to GPHA management, adding, "The appropriate adjustment must be implemented on the date of the first surgery [of Terminal 3] as stipulated in Appendix F of the Agreement of Act '.
However, according to the sources of ClbadFMonline.com, the leadership of the GPHA, while supportive of the agreement and its implementation, is concerned about the immediate financial and social impact that it will have. she will have on the Authority and the port jobs because she believes that the cost of the contract in these respects is too difficult to face in the expectation of future benefits.
According to sources, the management of GPHA remains convinced that its call for a review of certain relevant parts of the contract is justified.
The MPS management further clarified in its correspondence with the GPHA – through which it requested a meeting on this subject on Tuesday, June 4, 2019 at 15:00 GMT "on your arrival". [GPHA] office "- that:" It should be noted that the restoration of the tariff represents only an increase of 10.9 percent of the main handling rates and restoration of value in Ghana Cedi, which was clearly understood by all the stakeholders who raised the issue yesterday at the GSA – open day organized with stakeholders in the building of TPS MPS authorities.
MPS stated that "given the anticipated opening of Terminal 3 on June 28, 2019, as well as the consideration of giving customers 30 days' notice, we would like to meet you [GPHA management] as soon as possible, review the status of the updated MPS tariff publication in accordance with the conditions and levels agreed in the concession agreement.
In addition, we would like to take this opportunity to also consider the future transhipment tariff, which the shipping companies are waiting for at the earliest ".
In a letter dated May 24, 2019 to the Director General of the GPHA, Mr. Michael Luguje, and signed by the Financial Director of MPS, Mr. Sunil Bansal, MPS said: "Please find attached the tariff of the new terminal 3 The tariff has been established in accordance with the provisions of Amendment Act No. 1 of 12 June 2015.
"The rates shown in the attached sheet are adjusted by 20% in accordance with the provisions of the Agreement. We also send electronic copies of the attached fee and calculation for ease of reference and understanding.
"We also wish to draw your attention to the fact that the actual payment by the customer would be made in accordance with clause 1.2 of Annex 5 of the original concession agreement, as it is reproduced below:" Any ship or ship that lands in the dealer area shall pay: in US dollars or equivalent convertible currency to the dealer, the appropriate contributions, rates and charges [the] said times. Any shipper or consignee using the services of the concessionaire shall pay to the concessionaire, in United States dollars or an equivalent convertible currency, the appropriate duties, taxes and charges in accordance with [the] said times. Any ship or vessel or shipper or consignee that does not earn foreign currency, which moorings or uses [the Concessionaire’s services], will pay the dealer the cedi equivalent of appropriate charges, rates and charges, as specified in [the] these hours.
Section 3.14 (c) of the Agreement "grants MPS the freedom to adjust tariffs to reflect inflationary trends without the approval of the GPHA".
The GPHA warns of serious consequences if the agreement is implemented
Listling the potential consequences of the implementation of the agreement on the act on revenues and activities of the port in a document entitled "Analysis of the impact of the act of modification of the MPS concession agreement for the management of Terminal 3 as of July 2019 ". , the GPHA stated that "using the 2017 cargo / ship traffic data for comparison purposes," the volume of containers handled by the GPHA and other approved container handling companies will decrease. 39, at least 60% ".
"What do we do with unused equipment for work and cargo handling?", Says GPHA in the document.
He also warned that if the Agreement were implemented as is, the revenue generated by the GPHA would decrease as follows: container handling revenues would increase from $ 10.688 million to $ 4.21 (-60.54%), down from $ 38.75 million to $ 17 million (down -56%), MPS transaction fee revenue will increase from $ 24.12 million to $ 6.57 million (-73.67% decrease) ), terminal MPS terminal rental revenues will increase from $ 826,000 to (0,100% / zero), MPS terminal berth occupancy revenues will decrease from $ 1,915 million to -100 (-100 % / zero), the harbor dues revenue on MPS container operations will increase from $ 29 million to $ 2.9 million (down -90%), and ticket / goodwill – a ticket from Single entry which should account for at least 5% of the cost of the project – will be lost even though, in the contract of concessio n of MPS 2, $ 5 million had been paid as goodwill.
The GPHA also warned that: "If this agreement is implemented without change, the GPHA will go through a financial crisis in 2020", "will have unused labor, space and equipment" and " will not generate enough revenue to pay wages, existing services. " loans and develop the basic statutory port infrastructure ", adding:" We must avoid redundancies, whether in 2020 or in the following years ".
Contract between GPHA and MPS
The GPHA, which is the donor, was established by the Government of Ghana in accordance with the Ghana Port Authority Act 1986 (PNDCL 160), to plan, construct, develop, manage, maintain, operate and control ports in accordance with the laws of Ghana.
The dealer, MPS, is a private limited liability company incorporated and registered in Ghana under the Companies Code 1963 (Bill 179) under the business number CA-4171.
On August 17, 2004, the parties entered into a concession agreement (the "Contract") under which the Concession Holder undertook, among other things, to design, redesign, construct and construct, as the case may be, and then equip, operate, maintain, manage and repair the Tema port container terminal and provide facilities and services in the Tema port area.
Due to national economic growth and increasing volumes of containerized cargo handled in Tema port, the transferor has decided to expand the port of Tema in order to accommodate larger container ships and increase its handling capacity. containers in accordance with the GPHA. master plan.
As a result, the grantor decided to develop additional facilities, relocate and expand the areas that the concessionaire would operate under the agreement, in accordance with the GPHA Master Plan, so that the concessionaire could continue to perform its obligations under the Agreement.
In light of this planned expansion, the licensor and the concessionaire acknowledged that the areas operated by the concessionaire under the concession agreement had to be moved and extended in the GPHA Master Plan and that the concessionaire was then to operate in the new area. expanded.
The parties acknowledged that: "The expansion project (as defined below) will require improvements to the road network, including the upgrading of road access between Tema Port and the Accra-Tema Highway, as well as as the modernization of the Accra – Tema motorway. six lanes with slipways (the "road project" whose scope is described in more detail in the Roads Agreement) ".
The concessionaire confirmed to the transferor that its majority shareholder, Meridian Port Holdings Limited, had agreed to enter into binding agreements to finance, design, build, operate and maintain the road project on time.
The transferor offered, and the concessionaire agreed to engineer, finance, construct and operate Terminal 3, subject to the terms and conditions set out in the Amending Document and the Contract.
Reference value reduced by half
In April of this year, Vice President Mahamudu Bawumia announced that the reference value of imports had been reduced by 50%, while import duties on cars had been reduced by 30%.
Mr. Bawumia, on Wednesday, April 3, 2019, said the reforms were part of measures to combat smuggling at various points of entry into the country and to help businesses in Ghana.
"To reduce the incidence of smuggling and increase revenues, the reference value of imports will be reduced by 50%," said Dr. Bawumia at a public meeting in Accra.
A week before the announcement of Dr. Bawumia, President Nana Addo Dankwa Akufo-Addo had indicated that reforms to Ghana's import tariff regime, aimed at reducing high tariffs in the country's ports, were underway .
"From the studies we conducted, we found that our ports were not competitive and that the import regime in our country was far too high. We are taking care of that and, very soon, the measures that the government will put in place will be known to all of you. I do not speak next year or in six months, I speak very very soon, "promised the president on Saturday, March 30, 2019, during a speech to a city council gathering Ghanaians residing in Worcester ( Mbadachusetts). United States of America, as part of his visit to that country.
Paperless system reduces shipping costs
According to Finance Minister Ken Ofori-Atta, the introduction of the paperless port system has already reduced the cost of transactions in ports.
Before Parliament in response to a question posed by Adaklu's MP, Mr. Kwame Agbodza, a few months ago, had the introduction of the paperless system increased the cost of transactions in the United States. the ports, said the minister This initiative has reduced the cost of doing business.
"The results [of the Paperless Port system] showed that the cost components of activities in the country's ports have been reduced from 7 to 3 components. This then reduced the total costs from 1,280 to 320 GHS, "said Ofori-Atta.
He added: "This means that the paperless system has allowed the GHS960 to reduce the cost of transactions in the ports, which represents a saving of 75%. As a result, he said: "Importers are now saving 75% through the implementation of the paperless system."
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