Apapa crises: Terminal operator pulls out of concession
The crises rocking the Apapa Container Terminal operated by APM terminals took a new twist on Sunday when management of Lilypond Container Depot Nigeria Limited (part of the AP Moller Maersk family) announced that it would no longer operate the Lilypond container depot at Ijora, Lagos.
This is coming four weeks after the Apapa Area One Command of the Nigeria Customs Service (NCS) ordered the transfer of 1300 out of Apapa container terminal to Lilypond and Kirikiri Lighter Terminal (KLT) in order to ease the pressure on APM Terminals, whose inability to promptly handle the volume of containers was creating long waiting time, which repulsed importers and clearing agents.
Lilypond manager, Tristram Denyer, said in a press release on Sunday that the decision to pull out was communicated to the Nigerian Ports Authority on Thursday.
What intrigue port users is the sense behind pulling out at time Customs ordered the transfer of enough containers for them to handle after several months of inactivity, resulting in Lilypond management declaring in March 2013, a loss of N500 million within a year due to inactivity at the terminal occasioned by low container volume.
Denyer said that the decision was a very difficult one and followed a concerted effort by Lilypond management and staff to develop a viable new and sustainable long term business model over the last 8 months. “This effort has been frustrated by a number of factors including the lack of overflow container volume available for depots generally, the high cost of operating the depot and increased capacity in Nigerian marine container terminals.”
Denyer added that discussions with NPA over the period for transition to another operator would commence shortly but he expected this was unlikely to exceed 6 months, sayinng that the management of Lilypond would co-operate with NPA to ensure the successful handover to a new concessionaire should, as anticipated, NPA decide to tender the Lilypond concession.