17
Wed, Jul

MARITIME WORKERS FIGHT MPS TEMA PORT DEAL AS GPHA RISKS LOSING $70M YEARLY

Business & Economy

The Ghana Ports and Harbours Authority (GPHA) stands to lose a whopping US$70 million each year if its concession agreement with Meridian Port Services (MPS) is not reviewed, the Maritime and Dockworkers’ Union (MDU) has said.

The Ghana Ports and Harbours Authority (GPHA) stands to lose a whopping US$70 million each year if its concession agreement with Meridian Port Services (MPS) is not reviewed, the Maritime and Dockworkers’ Union (MDU) has said.

This is because, under the exclusivity clause in the agreement, all ships carrying 200 or more containers which berth at Tema Port will be handled by MPS, depriving the GPHA of 60 per cent of its present container business.

Clause 3.7 of the Deed of Amendment (DoA) of the concession agreement stipulates: “During the term, the concessionaire shall have the exclusive right to provide services to any Eligible Vessel entering the operational area.”

“Eligible Vessel” in the DoA is defined as “any vessel which is (i) a full container vessel or (ii) a vessel which is carrying two hundred (200) TEUs (twenty-foot equivalent unit) or more”.

According to the MDU, the exclusivity clause therefore prevents other operators from undertaking container business and allows MPS to operate as a monopoly in the container business.

This was contained in a statement from the union signed by its general secretary, Daniel Owusu-Koranteng.

Revenues slashed

The statement further says that in 2018 the container traffic at the Tema Port was about 1,077,066 TEUs. The exclusivity clause, in addition to an estimated tax waiver of $832m, is “simply unwarranted”, it says.

The MDU foresees a revenue loss in royalties, port duties, container shore handling and berth occupancy when the project becomes fully operational in June this year.

“Container shore handling (receipt, storage and delivery) revenues earned by GPHA will decline by 50 per cent, royalties currently earned by GPHA will reduce from 25 per cent to 5 per cent, port dues currently earned by GPHA will reduce from 100 per cent to 10 per cent, berth occupancy revenue will be zero for GPHA and concession area fees (rent) revenue will be zero to GPHA in Terminal 3,” it said.

The MDU finds it particularly worrying that “the exclusivity clause in the concession agreement and other generous provisions in the DoA that allow MPS to set its tariffs and exempt the company from paying port dues in addition to the payment of lower royalties will lead to loss of revenues for GPHA”.

“If MPS has to receive massive tax waivers to the tune of about 80 per cent of the investment cost, operate as a monopoly without competition and enjoy exemption from the payment of rents and port dues before it can operate profitably, then MPS wants to operate the Terminal 3 on a ‘zero-sum game’ principle where its survival should result in the demise of other businesses.

“Under the current agreement, the MPS Terminal 3 carries with it enormous social, financial and economic problems and the government has to renegotiate the agreement as a matter of urgency,” it urged.

Agreement

The 35-year concession agreement for the development of the new semi-automated terminal, according to an interministerial committee report issued on March 2018, bars GPHA from operating at the existing MPS Terminal 2 for container cargo business.

Similarly, issues of retention of port dues and determination of tariffs by MPS have seen the Trades Union Congress, the MDU and civil society organisations urging the government to review the agreement to protect investments of the port authority and jobs within the sector.

Workers of the Authority launched a 21-day protest on April 23, dubbed “GPHA Goes Red”, which saw the leadership of the workers’ union, in collaboration with the MDU, undertake a week-long protest march within the port enclave to pressure the government to address the problems.

The GPHA projects that roughly 1,400 of its permanent employees in Tema and Takoradi will be laid off if the new terminal becomes operational by July 1 and the agreement in its present form is made to stay.

MPS “falsehoods”

Meanwhile, the MDU statement also expressed concern about what it described as the peddling of falsehoods to stir anger and incite its members against the leadership of its mother organisation, the TUC.

The union found particularly distasteful instances where the MPS management had engaged in media propaganda to vilify the TUC leadership.

The MDU insists that assertions by Frank Ebo Brown, head of legal services at MPS, that the TUC has refused to engage the company in a meeting “are mischievous and palpable falsehood”.

“It would be helpful to explain that when the management of MPS expressed the interest to meet the secretary general of the Trades Union Congress, he whole-heartedly agreed to the dates proposed by the management of MPS, only for the management of MPS to give excuses to call off the meetings on two occasions,” the statement said.

Follow Us