IMPROVED SERVICES, CULMINATED INTO A BETTER NPA- FUCHS

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Danny Fuchs, LCM Boss

…Debunks notion that Landfall neglects its workers’ welfare

We conclude our interview today, with the Managing Director of the Lagos Channel Management on how the Nigerian Ports Authority (NPA) has become, cumulatively, a better NPA

Excerpt please:-

We want to assume that the Landfall is being paid about $7,000 per ship it handles. Whereas, it is costing you only $1,500 per tug boat to hire a tug boat; so, how do you rationalize the collection of $7000 for the handling of a ship, when in actual fact, you may only need $1500 to hire a tug boat?

Let me first re-emphasize the fact that we do not collect any money from any ship-owners. We only have our commercial relationship with the NPA and on this, we are basically collecting our money from them, at the end of each quarter. And every time we come to them, we need to prove that we have done our job. It is part of the agreement.

LCM BOSS, Danny Fuchs
LCM BOSS, Danny Fuchs

But, that does not justify the collection of $7000 when anyone can easily hire a tug boat for $1500?

Look, I will come to that very shortly.

But, are you saying that there is somebody out there who can bring in an internationally standard tugboat to do the job we are doing for less than the amount we collect? Do you also realize that we are talking of a standard tugboat with insurance cover and is in class? Or just any tug boat? Now, the $1500 per tug boat hire you talk about, is it for an hour or a full- day? Honestly, if you find anyone able to offer less than that, please help us to bring him along with a proposal, and we will hire them, and begin to freely use them, to do the job for us! Why not, if is in class. Has insurance cover and has the right engine power of thrust and the crew is well trained and maintained; and they are ready to offer their service for $1500 per tug boat hire! Let them come to us!

Even then your argument is still wrong. Do you realize that for each ship, we use a minimum of two tug boats when it is coming in and two tug boats when it is going out. That means on the basis of your wrong calculation $6,000 dollars would have been gone per ship without adding any other value to it.

I am in Nigeria. I know what the small canoe, with a 25-horse power engine thrust earn per day. Honestly, if we find such a tug boat, I’m willing to talk with them; and we will explore how they can further extend their services. Why not, if I should find it so highly economical.

Danny Fuchs, LCM Boss
Danny Fuchs, LCM Boss

We understand that the Landfall is engaged and paid on the basis of its activities in Lagos; yet, some have noticed that Landfall is not extending its services to some areas of Tin Can Island Port and the Kirikiri creeks. Why is this so? Are those Kirikiri creeks and TCIP areas not in Lagos?

Well, the Landfall do not determine what areas constitute Lagos and which area is not. What you must therefore understand is that we only follow instructions from our Principal, which is the Nigerian Ports Authority (NPA).

You need to understand that, because the NPA is the only authentic authority in the pilotage business, for which they are collecting revenues, in ship dues; and as such, are also the ones that puts the pilot on board the ship, we need to adhere strictly, to their instruction.

We cannot attend to any vessel, on the basis of our own will. Even if an agent or stakeholder comes, we cannot talk to him. Don’t forget that we only manage the fleet of the tugboats of the NPA. And these tugboats are under the firm control of the Habour Master.

We do not dictate to any tug boat: “You go there’ or ‘you go there’. We only provide the Habour Master his working tools. So, we ensure we make the tugboats ready for his instructions or assignments. So, if he decides to send the tug boat to Kirikiri or to TCIP, it is his decision, in so far as he is sending those tugboats to the navigational channel. This is part of what has been agreed on.

Now, you must at this point understand that there are some areas in Lagos that are not navigational channel; because they have never been surveyed for wrecks or maintained or dredged. So, for such areas, nobody knows what their depth is or what is under them; and nobody wants to take the risk.

The tugboats are precious assets which belonged to the Nigerian public; and it would be wrong to take a tugboat that has cost the Nigerian tax payers a lot of money, and send it to a place you don’t know either its depth or what is there under, and damage the boat.

This is why the Habour Master consistently acts on decisions that ensures that the tug boats are only sent to places, where he knows can be considered by anybody reasonable person, as a safe place to work.

Unfortunately today, Kirikiri is out of the navigational channel. But as of Tin Can, if you go there now, you can see our tugboats working—even now in line with the instructions of the Habour master!

 

We understand that your workers are merely being paid peanuts, despite the good budgets you earn from your Principal. Is it not the truth that you pay them peanuts and put them under inhuman conditions?

 

I am glad to recall now that I earlier told you, that we always prioritize our workforce, because we have invested heavily on them. So, I should want to tell you right now that this your observation is to say the least, bogus and frivolous! This is purely, false information.

Let me quickly remind you here, that there is a standard agreement between the Landfall management and the two in-house unions, in terms of an enviable conditions of service. It also helps us, to understand each other, not only in terms of boosting our indigenous capacity alone, but also ensuring they are not neglected.

About three years ago, we agreed on a condition of service, (he brings out a booklet: LTT Landfalls internal Conditions of Service).

If you look at this (booklet), you would see that the agreements therein, were both signed by the leadership of the in-house unions, and the leadership of their mother union; and we have been following strictly, the letters of these agreements.

I don’t want to tell you we have been following these agreements to the letter; I only want to tell you that if we have deviated, by now, you would have started witnessing industrial crisis. Right now, there is none…

Now, if the unions are not complaining; the workers are not complaining; I should be interested in knowing who actually complained to you, as a journalist!

But then, while I agree that anybody can complain, I should also expect such complaints to be backed by facts. But, the facts as far as I can see, have not shown that we have deviated, from agreed terms.

But, as for what is peanuts, I don’t know. I also want you to know that when our crew works six weeks aboard their ships, they also go home and rest for six weeks; but they get paid for all the 12 weeks—the six weeks they worked, and the six they rest with.

We also have certificates from the Pencoms—which means we do not play with their long-term benefits too, in line with the Nigerian Labour law. In addition to these, we also make sure they get good food, (free) while on board, and good salaries, to back their efforts.

I want to emphasize this again and again: we value our workers; because we have invested heavily in them. So, when they work six weeks; they also rest for six weeks—and we pay them their 12 weeks correctly.

We believe that they are our capital investment, because they are attached to the vessels. We believe that the workers must be connected to their vessels; for them to put in their best. So, when they are resting for six weeks, another group of crew take charge, on shift basis. This is the international standard stipulation, that they must not only work; they must also enjoy adequate rest. So, I honestly do not understand what you mean by ‘in-human’ conditions of service.

 

Supposing we assume that the NPA is not earning anything from towage business in Lagos; but the authority expends as much as $1.8million on the services annually, do you think it is wise for the authority, to continue to sink money into it?

May be I should take this question by explaining to you, how the ports industry is working.

When a ship comes into a port, there are lots of dues the ship pays; some are on behalf of the ship owners, some on behalf of the importers and some on behalf of other terminal operators.

One of these is called the Ship dues. The ship dues are based on a formular that is calculated in ports language. But, basically, it is based on the size of the ship. So if the ship is bigger, the ship owner pays higher ship dues. And thus, some ships may as a result, pay thousands of dollars as ship dues, before leaving a port. How many thousand, would depend on the size of the ship. Such payment here, would directly go to the NPA.

As for us, we do not collect any money from any ship for NPA.

You must understand that ships dues are divided. Ships dues are paid by the ship owners or their agents to the Port Authority account. The parameter for this is their gross tonnage; and it determines how much money a ship is going to pay.

There is another due called Harbour dues, which also go to the NPA. But there is another one called Cargo dues, which is collected by the terminal operators, agents etc., and it is from this that they pay their rent, lease royalty etc. to their landlord

But of the ship dues, the NPA is also expected to pay for towage, light house, etc. the ship dues can be seen as the revenue; while the cost of maintaining common user facilities, the access roads, towage, light house etc. may be considered as the expenses.

But, while I am not the accounting officer of the NPA, I must let you know that the individuals there are men of integrity.

So, I don’t think they will invest in towage, it is not meant to further boost their operation, efficiency and revenues.

So, towage is also part of the service that the port must render to the trading ships that are coming in.

So, you must look holistically at the operation of shipping. Is the ship-owner going to see the salary of the ship captain as loses or expenses and therefore refuse to pay him?

So, I do not see any investment in towage by the NPA as losing money, because, I am looking at the entire operation from a holistic point of view. It is a service the authority must give in order to enhance its revenue. It is like the fuel a taxi driver buys in order to keep running and picking passengers.

The diesel is a loss, but if you don’t invest in it, how can you operate your bus? So, also the food you buy is a loss; but if you don’t invest in it, you also don’t live!

We learnt that your contracts neither pass through the due process for clarification, nor does it pass through the Ministry of Justice, for scrutiny. Is this true?

Well, you know that for our company, it takes two to tango. I would have expected you to take that your wonderful question to NPA, rather than to us.

Because, by now, I would have believed that you should have known that we are a private company; and the NPA is our Principal and partner. So, I would expect you, to know that it is the NPA that should go to the ‘Due Process’; not the Landfall—except you are expecting us, to also go for due process, on the same issues that the NPA has secured ‘due process’ endorsements.

 

From an initial budget of about $13million, we could understand that your budget has increased; yet you havre not made any addition to the number of fleet you manage. Is this not cheating to the Nigerian economy?

A very hard question, yet a very simple answer.  However, I should also want you to know, that you may have asked this question, because of your lack of the relevant knowledge or understanding… of how we work.

Now, as I said before, the budget of this company, is based on the number of ships we handled. So, if this number, when compared to the initial earning figure, has shown increase, then, that should give you the clue that the number of ships coming into Lagos has also, correspondingly been on the increase.

Now, like I was telling you at the beginning of this interview, we started with slightly over 2000 ships; and now that we are handling slightly over 3000 ships, obviously, you should not expect us, to still earn same revenue as of when we handled 2000 ships. And don’t forget that we manage the fleet, not the operation…

So, every morning, the Landfall is supplying at least, four tugboats to the Habour Master, to enable him meet the demands on his hand. And these he efficiently distributes, so as to be able to do his job, effectively. But we are not the one to decide which tugboat go to which ship.

Now, if you think we have been using only the same tug boats we started with at the beginning, then, you should also realize that they should be worn out by now. Or that, we must have been doing something, consistently remarkable, to ensure that they remain functional, and in class, because the wear and tear on these boats must have been going up increasingly. And it also means, that we must have ensured that the tugboats are well maintained to override the tendency towards wear and tear; and we must have been spending more on fuel, because they must be working more and more to meet the increasing demands on them.

In fact, our tug boats are working 24|7. And for both of this shift, we have more than 10 persons, every time, everyday, because you cannot ask a shift to work more than 12 hours.

So, on each vessel, we have to shift; i.e. two captains, two ship engineers, two…everything is in two. And this is the only way we can work to meet the supply need of the increasing demand.

It is at this point that you may also ask us, how has the money we collect, our income, also been going?

If you are not there; and you are not in a position to watch us work, then we can understand if you don’t understand the peculiar nature of the task.

And from the record that the NPA has published, the incoming tons have been growing, from 24 million tons, a couple of years ago to over 75 million tons.

Of course, the feat has mainly come from the basics of better towage, better services, better channel management, better dredged and cumulatively a better NPA!

 

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