General Secretary of Maritime and Dockworkers
The Maritime and Dockworkers’ Union (MDU) has expressed concern about what it said was the peddling of falsehood to stir anger and incite members against the leadership of its mother organisation, the Trade Union Congress, (TUC).
A statement signed by Mr Daniel Owusu-Koranteng, General Secretary of MDU, said it found it distasteful the situation where management of the Meridian Ports Services, (MPS), deliberately engage in media propaganda to vilify the leadership of the TUC.
The MDU insists that assertions by Mr. Frank Ebo Brown, Head of Legal Services of MPS, that the TUC has refused to engage its outfit in a meeting are mischievous and palpable falsehood.
The statement noted: ”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 wholeheartedly 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 management of MPS proposed a new date for the third time which was not convenient to the leadership of TUC. It is disingenuous on the part of MPS management for Mr Frank Ebo Brown to state that the management of MPS had tried reaching out to the TUC leadership without any success. We have heard similar statements made by the CEO of MPS, Mr Samara Mohammed in the media campaigns of MPS management”.
Mr Owusu-Koranteng said the conduct of the MPS was a clear betrayal of trust and a stab in the back of their mother union.
It added, ”It is unfortunate for the management of MPS to use the JSNC platform to pursue the agenda of management especially when the workers have no knowledge of the content of the Terminal 3 concession agreement and they have not been party to the flawed process that led to the contracting of an agreement which had generated so much public rage against it.
”We expect the management of MPS to develop the courage to fully disclose the content of the Concession Agreement on Terminal 3 to the workers if the management of MPS want the workers to have a dispassionate discussion of the agreement”.
PRESS STATEMENT OF MDU
CORRECTING THE FALSEHOOD, MYTHS AND MISCONCEPTIONS OF
MERIDIAN PORT SERVICES(MPS) IN RELATION TO THE TERMINAL 3 CONCESSION AGREEMENT
In recent times, the management of Meridian Port Service(MPS) has churned out a lot of untruths, myths and misconceptions relating to the Terminal 3 concession agreement in its hyped Public Relations strategies.
We have the responsibility to let the people of Ghana who are the owners of the resources to understand the implication of the concession agreement on revenue losses to the state, huge job losses relating to direct and indirect jobs, collapse of maritime businesses among others.
It is also important that we correct some of the untruths being churned out in the pure PR gimmicks role out by MPS in relation to the engagement of MDU and TUC on our campaigns to draw the attention of government and the public to the bad concession agreement of a good maritime project.
The Maritime and Dockworkers’ Union (MDU) of TUC engaged with the management of Meridian Port Services on the impact of the operations of the Terminal 3 on GPHA and other operators in the Tema port and when the union did not have convincing response from the management team of MPS which included Mr Frank Ebo Brown, Head of Legal Services of MPS, the MDU scaled up the engagement process to involve the leadership of TUC, Ghana.
So far, the leadership of TUC and the leadership of MDU have jointly engaged the management of GPHA and the Minister of Transport on the concerns of labour on the MPS concession agreement.
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 wholeheartedly 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 occassions .The management of MPS proposed a new date for the third time which was not convenient to the leadership of TUC.
It is disingenous on the part of MPS management for Mr Frank Ebo Brown to state that the management of MPS had tried reaching out to the TUC leadership without any success. We have heard similar statements made by the CEO of MPS, Mr Samara Mohammed in the media campaigns of MPS management.
We are aware that the management of MPS led by Mr Frank Ebo Brown had carried the propaganda and vitriolic attacks on the leadership of MDU espcially the General Secretary of MDU to the Joint Standing Negotiating Committee (JSNC) meetings where discussions are by law defined to focus on negotiating terms and conditions of service of employees and not propaganda and campaigns on concession agreements which relate to shareholder interests.
It is unfortunate for the management of MPS to use the JSNC platform to pursue the agenda of management especially when the workers have no knowledge of the content of the Terminal 3 concession agreement and they have not been party to the flawed process that led to the contracting of an agreement which had generated so much public rage against it. We expect the management of MPS to develop the courage to fully disclose the content of the Concession Agreement on Terminal 3 to the workers if the management of MPS want the workers to have a dispassionate discussion of the agreement.
We wish to indicate some of our concerns with the MPS Terminal 3 concession agreement as follows:
EXCLUSIVITY OF SERVICES
Clause 3.7 of the Deed of Amendment (DoA) states that,“During the term, the concessionaire shall have the exclusive right to provide services to any Eligible Vessel entering the operational area” where 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 or more.”
The Exclusivity Clause thus prevents other operators from undertaking container business and so MPS operates as a monopoly in the container business. Marc H. Juhel in his book titled, “Container Terminal Concession Guidelines” explains that,
“Although competition restriction provisions are not generally not advisable, there are situations where some kind of limited exclusivity may be considered when existing container traffic at the time of concessioning is only marginally sufficient to make a balanced operation possible for a private operator. Typically, if fully privately financed, even a small-scale terminal, two berths for instance three/four gantry cranes and corresponding yard equipment will need around 100,000 TEUs per year to break even under average Container handling tariff.”
It is worthy to note that the Container traffic is about 1,077,066 TEUs in 2018 for Tema port indicating that the Exclusivity clause in addition to tax waiver of $832 million are totally needless and unwarranted . The Exclusivity clause does not promote competition and efficiency among operating terminals. It is for this reason that most countries in the subregion such as Togo, Nigeria, Ivory Coast etc have two or more terminals operating and competing independently under different companies.
The Exclusivity clause which requires that all ships carrying 200 or more containers that berth at Tema Port should be worked on by MPS would deprive GPHA of 60% of its container business and GPHA would be confronted with total revenue loss of about $ 70 million per annum.
GPHA spent about $ 60 million to construct the Terminal 2 and GPHA must be allowed to operate the container business in Tema 2 without any restrictions to stem the tide of huge revenue losses for GPHA and other operators which would then compel GPHA to shed off labour in order to survive.
The solution to the problem of job losses of GPHA and other operators is for government to renegotiate the Exclusivity clause out of the Deed of Amendment of the MPS concession agreement. Maintaining the Exclusivity clause in the concession agreement and seeking a piecemeal and adhoc solutions would not address the root cause of the problem but would end up as a palliative that scratch the surface of the problem. Our union would reject any solution to the problem which does not address the foundation of revenue losses and job losses of GPHA and other operators.
REVENUE LOSSES
The Exclusivity clause in the concession agreement and other generous provisions in the DoA that allow MPS to set its tariffs and exempts the company from paying port dues in addition to the payment of lower royalties will lead to loss of revenues for GPHA. It is envisaged that when the project becomes operational in June 2019, GPHA will lose revenues including the following :
Container shore handling (receipt, storage and delivery) revenues earned by GPHA will decline by 50%.
Royalties currently earned by GPHA will reduce from 25% to 5%
Port dues curently earned by GPHA will reduce from 100% to 10%
Berth Occupancy revenue will be zero for GPHA.
Concession area fees (rent)revenue will be zero to GPHA in Terminal 3
It is important to mention that the port authority being the landlord is entitled to port dues but the concession agreement of MPS denies GPHA the right to collect port dues.
Payment of Goodwill/Initial Downpayment
It is a standard practice for all terminal operators to make initial payment before commencing business. MPS made an initial payment of $4 million in 2004 but GPHA and the state would not benefit from the intial payment before commencing operations. The following examples of downpayments in the West African sub region would buttress our point : 2004 Tema $ 5.0 million -2005 Tin Can Island $ 3.5 million-2009 Cotonou $ 25 million -2013 Abidjan $ 120 million.
Flawed Bidding Process
International projects of such magnitude should go through international competitive bidding so that Ghana would achieve the best deal from the investment .The bidding process which was truncated through political influence cannot pass the transparency and competitive bidding test. The bad concession agreement which is not in the interest of GPHA and Ghana is a reflection of a flawed procurement and bidding process.
Conclusion
After taking over the whole container business in the Tema port and becoming very comfortable with high tax waivers, exemptions from payment of port dues, rents etc, MPS is peddling ideas on how to use terminal 2 to generate revenues through rents and other businesses except agreeing to the renegotiation of the Exclusivity Clause out of the Deed of Amendment which would allow GPHA to operate Terminal 2 as a Container Terminal .
If MPS has to receive massive tax waivers to the tune of about 80% 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.
Daniel Owusu-Koranteng
General Secretary of MDU
