— Reopens dying probe
The worsening relationship between the House of Representatives and APM Terminals has escalated further as the latter renew its investigation on the former operation in the country.
The tension, which has been on the low lately, has soared in recent days since APM Terminals out of surprise announced a 9.67 percent increment on all current charges of its services at the Free Port of Monrovia. In defense of its moves, the company said it violates no law and that the increment was necessary to raise more revenue to enhance its operations and equipment with more than US$3.3 million in 2021.
The new levy, APM Terminals argued, will also lead to additional revenue in terms of corporate taxes and concession fees for the government.
“Per our Concession Agreement, this adjustment is calculated by a predefined inflationary formula, and will have the effect of adjusting all charges in the current Tariff upward, by 7.032%,” the company said in a statement. “The first upward adjustment since 1st February 2015, as there was a tariff freeze for the years 2016 and 2017”.
However, it seems that the explanation from APM Terminals did not meet the expectations of the lawmakers, who appeared more interested in the customs brokers association of Liberia side of the story.
According to the brokers’ narrative, the new tariff will not be felt by importers rather consumers who will feel this as prices of commodities will increase. Buying into the brokers’ argument, the House of Representatives last week, during its 2nd day sitting, voted to revive the APM Terminals probe on the request of a motion from Bong County District #5 Representative Edward Kafiah.
In his motion, Rep. Kafiah asked the house to join him and mandate the Specialized Committee set up to probe APM Terminals to submit a report including a comparative analysis of the company’s operations in Liberia and the Republic of Ghana.
It may be recalled in March 2020, the Specialized Committee went to Accra, Ghana to ascertain the workings of APM Terminals comparing the two countries and report to Plenary. The Specialized Committee was setup by House Speaker Bhofal Chambers on January 15, 2019 making it the oldest specialized committee. The committee is tasked to scrutinize (review) all tax incentives and concession agreements, but since then, it is yet to make report on APM Terminal.
In addition, Rep. Mathew Joe of Grand Bassa County District #3 argued that APM Terminals’ tariff is untimely and unhealthy for the country since the economy is experiencing some hardship.
“It will interest you to know that APM Terminals has financially benefited more than the Republic of Liberia. According to APM Terminals financial report, which was also accentuated by the Managing Director of the National Port Authority, Bill Twehway, the company made a windfall profit of [US$45.7 million] in 2018,” Rep. Joe said. “Of this amount, the government of Liberia received US$7,950,212) as a remittance. If you subtract what the government of Liberia received, you will realize that APM Terminals walked away with a whopping US$37.8 million in 2018.”
Rep. Joe further argued that APM Terminals has made windfall profit at the detriment of the Liberian people, and if the port operator is allowed to continue, the people will suffer more. According to Rep. Joe, the situation is frustrating, embarrassing, and leaving the country poor as more Liberian importers now divert their containers to Guinea because of the exorbitant nature of clearing containers at the National Port Authority.
“Furthermore, APM Terminals also made another huge profit of US$46,563,230, in 2019. Of this amount, APM Terminals remitted to the government of Liberia an amount of US$9,000,000. So, this means, APM Terminals walked away with US$37.5 million as profit,” Rep. Joe debated. “As we have resumed our 4th session, I beseech the acquiescence of my esteemed colleagues to comprehensively review, and subsequently amend the APM Terminals concession agreement in the interest of the Liberian people.”
Rep. Joe newest plea comes in the midst of several communications he has submitted to the house plenary calling for an amendment to the APM terminals agreement. In some of his complaints, Rep. Joe mentioned the issue of service rate in section 7.07, a section gives that gives APM Terminals the sole authority to increase tariff on the handling charge. This, in his mind, is very wrong. He also mentioned APM Terminals violating section 7.17, which talks about appointing five Liberians to senior management positions, and section 7.06, which mandates the port operator to turn over the service to the NPA after five years.
Meanwhile, the Specialized Committee, which is now probing APM Terminals is a chair by Rep. Clarence Massaquoi of Lofa County District #3, and co-chaired by Montserrado County District #8 Representative Acarous M. Gray.