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On the 3rd of June 1953, some fifty-one years ago today, Sir Robert de Zouche Hall then Governor of Sierra Leone changed the name of this Port from Deep Water Quay to the Queen Elizabeth the Second Quay (QEII Quay) to mark the coronation of the Queen of the United Kingdom and the Commonwealth. By that action Governor de Zouche Hall demonstrated the degree of national importance he attached to the Port.

On becoming President, I also appreciated the importance of the Port to the nation and had expected that its operations will contribute significantly to our efforts in developing the country. So far my expectations have been dashed, hence the reason for my visit on this 51st anniversary of QEII Quay.

For most developing countries a major source of revenue is derived from international trade taxes that are collected at sea ports. The volume and value of such trade also determines the volume of resources available to the government for use in providing services and other facilities to the people. It is therefore important that officials of the Sierra Leone Ports Authority (SLPA) and Customs Department of the National Revenue Authority (NRA) operating at QEII Quay at Cline Town execute their duties selflessly, in the public interest, since they are a vital source of revenue that Government needs to build the nation and provide service to the people. Regrettably, activities at the port have often been reported to be anything but that. Unfortunately it is common knowledge that there are systematic and institutionalised arrangements designed to make transactions through the port costly and a humbug for most people using the Port. Reports have reached me that almost 20% of some commodity imports are being stolen. Tariffs on imports are deliberately distorted by Customs Officers for personal gains. There are cumbersome procedures and long delays in processing documentation to clear goods. Illegal payments are routinely being demanded by some officials involved with the process of clearing goods. This culture of financial irregularities, inefficient management and occasional criminal violence and vandalism can no longer be allowed to continue.

Earlier this year I made a surprise visit to the port at Cline Town in order to gain first hand experience of its operations. At the end of the visit I was persuaded that government has to take immediate drastic action to address these problems as well as contain the drain on SLPA finances and promote efficient management. Financial mismanagement at the Port has had a long history as evidenced by two of the enquiries set up by Government. One was in 1976 chaired by Justice S.J. Forster and another in 2002 presided over by Mr. Chris Jasabe to look into the irregular purchase of a forklift. Appropriate disciplinary measures were taken as a result of these enquiries.

Some of the remedial actions that government is currently taking to transform the port include the privatisation of some of its activities and the other reforms taking shape at the NRA. To accelerate this transformation it was necessary to learn from the experience of similar institutions in the sub-region that have undertaken radical restructuring that induced profound changes in attitudes and operational systems and brought about significant financial benefits to both the institutions themselves and their national economies.

During one of my recent official visits to Ghana, I and some of my senior Ministers took the opportunity of visiting the Ghana Ports and Harbours Authority (GPHA) at Tema, which is reputed to be properly managed. We were deeply impressed with the professional and committed way GPHA management conducted its affairs. They have been able to post healthy levels of profits between 1998 and 2002 with operating profit rising from US$19.9 million to US$26.8 million. GPHA has paid corporate taxes of around US$18 million and undertook capital expenditure totalling US$32.5 million, and it has also loaned its Government US$14.4 million.

On my return to Freetown, I promptly decided to send to Ghana a high powered delegation comprising Mr. A.R. Turay, Chairman of the National Commission for Privatisation, Capt. A.R.N. Macauley, Chairman Sierra Leone Ports Authority and Dr. John Karimu, Commissioner-General, National Revenue Authority with a mandate to study the structure, organisation and operations of the GPHA and related agencies with a particular focus on the privatisation of selected functions of GPHA, and the collaboration that has been developed between GPHA and the Ghana Customs Administration. The delegation which left Freetown in April was also asked to learn useful lessons from the GPHA operations that could be adapted and dovetailed into the current reforms being undertaken at Sierra Leone Ports Authority and the Customs and Excise Department of the National Revenue Authority. Furthermore, I asked the delegation to make a diagnostic analysis of SLPA in order to identify the reasons for its poor financial performance over the years.


The delegation has returned and has submitted a report which, among other things, contains a financial analysis of the operations of SLPA between 1995 - 2002 and a set of recommended remedial actions that should improve the financial health of SLPA, promote its management's efficiency and streamline the management's functions and procedures of the Ports Authority and Customs Department.

Let me now share with you some of the highlights of the delegation's report. Between 1995 and 2002, the turnover of SLPA rose by a factor of more than three times from Le6.2bn to Le20.1bn whilst gross earnings increased by the same multiple from Le4.3bn to Le13.1bn. However, earnings before tax resulted in a loss of Le40m. in 1995. In 2002, administrative costs alone amounted to Le12.76bn. This huge difference between gross earnings and the net losses is explained mainly by the relatively faster rate of increase in administrative costs and irregularities arising from inflated supply contracts and fraud. The number of people employed at SLPA in 1980 was 2315 of which 300 were casual workers. In 2003 there was a steep increase in staff strength to 2662 with the number of casual workers rising to 1032, which is ten times higher than the level in 2002.

Interestingly, the business activities at the port have been on the increase. Total container volume traffic rose from 10,391 Tons Equivalent Units (TEUS) in 1999 to 34681 in 2002.

From the brief analysis that I have just shared with you it is quite evident that SLPA operations are potentially profitable. But I regret to say that my Government has yet to receive any dividends from SLPA since 1996. This is largely because revenue generated by the port is being absorbed by very high administrative costs, principally those relating to staff, operations and maintenance. It is notable that some of the maintenance costs contain inflated contract values for the supply of equipment and services.

Government has therefore decided to take immediate steps to check the growth in these major cost components in order to turn around the financial health of SLPA. Additional measures are also to be taken to review the management functions and procedures at the SLPA including those of customs and related agencies so that the port could have a comparative cost advantage in the sub region.

Government Action Plan

In addition to the current structural reforms at the Sierra Leone Ports Authority and Customs Department of the National Revenue Authority, the Government is developing a long-term strategy to contain escalating administrative and associated costs.

Instead of being directly involved in revenue generating activities, SLPA's role is to be limited to that of being the Port's landlord earning its income by charging fees on the turnover of the private sector franchisees at the Port. The NCP will therefore have to advance the time-table for the privatisation of the core activities of the Port, namely stevedoring, traffic handling and container terminals so that it is concurrent with the programme for delinking the non-core activities such as the clinic, security, ferry and slipway. These changes will undoubtedly bring about a reduction in the level of the labour force directly employed by SLPA while in fact increasing job opportunities in the industry as a whole. The Government is therefore exploring the possibility of setting up a Dock Labour Company (DLC) by SLPA, with the Dock Workers Union, the stevedores and other major stakeholders at the Port who will own shares in this company and share in the profits of the company. The DLC will become the sole supplier of labour to the Port and would protect and secure jobs as well as provide for pension and terminal benefits. SLPA has to fund the cost of its equity contribution to the DLC and the terminal benefits that may be necessary when it switches its role to landlord. The Government is also investigating possible revenue sources to assist with this project.

However, in the short term the SLPA management is urged to review its employment policy of permanent, casual labour and maintenance contracts to cut out all wasteful expenditure. Government is also reviewing the structure of the Board and management at SLPA with a view to putting in place an organisation that can manage the projected changes competently.

Effective from today the Government's mission statement for SLPA and NRA is "to make QEII Quay at Cline Town the least-cost Port in the sub-region that would enable it to develop a vibrant transhipment business". The corporate objective of SLPA is to make its operations profitable. The NCP is therefore urged to task the management and Board of SLPA to produce a five-year corporate plan which should aim at turning around the fortunes of SLPA within the first twelve months.

Finally Government expects that the Port and customs operations are to be streamlined jointly as soon as possible by the introduction of a system similar to the Ghana Community Network (GCNET) used at Tema Port. This system should be coupled with the installation of a container scanning facility to facilitate the speed of transactions and enable Sierra Leone to comply with the new International Ship and Port Facility Security (ISPS) code which becomes effective 1st July 2004.

Until the Dock Labour Company (DLC) is established the National Commission for Privatization (NCP) will monitor very closely the quarterly movements in revenues and costs of SLPA with a view to arresting any adverse trends.