The National Assembly’s Public Enterprises Committee (PEC) has raised concerns regarding an outsourcing agreement between the Gambia Ports Authority (GPA) and Shore Handling Management Group (SMG), according to the committee's report on its scrutiny of 2022 financial statements. This arrangement was reportedly entered into without board approval or a cost-benefit analysis. The committee noted, "The arrangement passed on the handling of empty containers, as well as exports of both full and empty containers to SMG for an annual royalty payment of 7% and an Annual License fee USD 5,000 to be paid to the Authority." These observations are contained in the committee’s report on its scrutiny of the 2022 financial statements, activity reports, and management letters of State-Owned Enterprises (SOEs), noting several areas of concern within the GPA’s operations.
Outsourcing Deal Lacks Oversight
Auditors discovered that the Gambia Ports Authority (GPA) outsourced its shore handling services to Shore Handling Management Group (SMG) through an agreement. This arrangement specifically covered the handling of empty containers and the export of both full and empty containers. Under the terms of this agreement, SMG was obligated to pay the Authority an annual royalty of seven percent, in addition to an annual license fee of $5,000. Under the arrangement, SMG was required to pay the Authority an annual royalty of seven per cent together with an annual licence fee of $5,000.
The agreement was reportedly entered into without the necessary approval from the GPA Board. This lack of board oversight is a significant point of concern for the committee. No cost-benefit analysis was conducted to ascertain whether the outsourcing of these services would enhance the Authority’s revenue, operational efficiency, or cost management. No cost-benefit analysis was carried out to determine whether outsourcing the service would improve the Authority’s revenue, operational efficiency, or cost management. Auditors stated, "GPA did not seek board approval nor did the Authority conduct a cost-benefit analysis on the outsourced shore handling services to SMG to determine whether this arrangement has a positive impact on GPA’s revenue performance, improved efficiency in terms of resources and cost of operations." The GPA did not seek board approval for the outsourced shore handling services to SMG, nor did the Authority conduct a cost-benefit analysis. The committee emphasized that such an analysis is key for ensuring that outsourced services genuinely benefit the public enterprise and its stakeholders.
Questionable Ferry Service Loans
The National Assembly's Public Enterprises Committee (PEC) also voiced concerns regarding loans extended by the Gambia Ports Authority (GPA) to the Gambia Ferry Services (GFS). The committee noted that the outstanding balance of GFS loans might be challenging to recover due to the ferry company's financial performance. The committee also expressed concern over loans granted by the Ports Authority to the Gambia Ferry Services (GFS). The outstanding balance of GFS loans may be difficult to recover because of the ferry company’s financial performance, raising questions about the prudence of these financial arrangements.
Original loans granted to GFS totaled D104.6 million, with D40 million subsequently converted into equity. Loans previously granted to GFS amounted to D104.6 million, of which D40 million had been converted into equity. During the period under review, the Ports Authority advanced an additional loan of D92,277,629 to the ferry company. Despite these advances, no repayments had been made towards the outstanding loan balance of D60.4 million. The GPA had already recognized an impairment loss of D336,879,455 relating to previous loans granted to GFS, according to the committee's findings. This substantial impairment loss further shows the financial difficulties faced by GFS and the potential risk to GPA's assets.
Revenue Collection Discrepancies
Revenue had been wrongly posted under the shore handling revenue account, according to the Public Enterprises Committee (PEC). The revenue had been wrongly posted under the shore handling revenue account, leading to potential misrepresentation of financial performance. The committee also examined revenue generated from aids to navigation stemming from a contractual arrangement between the Gambia Ports Authority (GPA) and the Gambia Maritime Administration (GMA). This agreement mandates GMA to collect all dues for aids to navigation, distributing proceeds with 70 percent to GPA and 30 percent to GMA, payable quarterly. The agreement requires GMA to collect all dues relating to aids to navigation and distribute the proceeds on the basis of 70 per cent to GPA and 30 per cent to GMA, with payments to be made quarterly. However, during the review period, the Ports Authority received only 30 percent of the collected revenue, instead of the agreed 70 percent. During the period under review, the Ports Authority received only 30 per cent of the revenue collected instead of the agreed 70 per cent, indicating a significant shortfall in expected income. Revenue for buoys and lights in the fourth quarter of 2022 was incorrectly calculated and overstated by D2,042,806.50. Revenue relating to buoys and lights for the fourth quarter of 2022 was incorrectly calculated and overstated by D2,042,806.50, further complicating the accurate assessment of the Authority's financial position.
Committee Recommendations
The committee recommended that the Gambia Ports Authority (GPA) Board and Management review the shore handling arrangement. The committee recommended that the GPA Board and Management review the shore handling arrangement to ensure its terms are equitable and beneficial to the Authority. It also recommended that the Board and Management ensure full repayment of existing loans before granting new facilities. The committee recommended that the Board and Management ensure that loans are fully repaid before additional facilities are granted to entities like the Gambia Ferry Services, to mitigate financial risk. It also urged the Board and Management to ensure the Gambia Maritime Administration (GMA) complies with its contractual terms. The committee recommended that the Board and Management ensure GMA complies with the terms of the contract and pays the full amount due to the Ports Authority, rectifying the revenue collection discrepancies. The GPA Board and Management were directed to submit the revised Memorandum of Understanding by June 30, 2026, outlining clear terms and responsibilities for these critical financial arrangements.