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Cabotage fund hits N100bn, as House Committee laments non-disbursement

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  • As State of petroleum downstream worsens 

The Cabotage Vessel Financing Fund, CVFF, currently stands at over N100billion just as the House Committee on Maritime Safety, Education and Administration has lamented the non-disbursement of the fund.

Speaking to Vanguard at the sideline of the just concluded Harmonized Stakeholders interactive forum organized by the Nigerian Maritime Administration and Safety Agency, NIMASA, Chairman of the Committee, Honourable Mohammed Umar Bago, said that the Committee has already registered its displeasure against the development.

Bago also disclosed that some ministerial bottlenecks have been responsible for the non-disbursement, adding that the Committee would do all within its powers to ensure that the fund is disbursed to local shipping operators. He stated: “It is a shame that we have over a N100 billion in the Cabotage Vessel Financing Fund and our people cannot access the fund.

“There is a need for the Presidency to intervene in the    matter so as to ensure that local shipping operators are empowered with a view to growing the economy.’’ Vanguard gathered that the Cabotage Vessel Financing Fund is currently domiciled in the NIMASA and the fund has become an issue of controversy as past administrations of the agency were not able to disburse it.

However, Dr. Dakuku Peterside, the new Director General of NIMASA had stated appears to be working on possible disbursement soon He stated: “We are pushing for the early release of the fund once stakeholders comply with the prescribed way of accessing the fund. “We want to grow tonnage; we are in a hurry to grow tonnage, the more tonnage we have the better for all of us.

The more employment we will create. “As an agency we have grown the Fund in the past one year and we will continue to grow the Fund.”

In the meantime, with four refineries and its status as a leading oil and gas producer, Nigeria was expected process refine commercial crude oil for domestic consumption and export. But that has not been the case for many years as a result of the poor state of its refineries. Consequently, the nation has become a major fuel importer with very negative implications for its economy.

The nation’s new Petroleum Policy obtained by Vanguard indicated that Nigeria’s refining capacity is one of the smallest. ”On a per capita basis, Nigerian refining capacity (theoretical maximum capacity which is far higher than actual current operational capacity) is one of the lowest, even among other African countries: Libya: 6.17 bpsd/capita; Algeria: 1.37 bpsd/capita; South Africa: 1.11 bpsd/capita; Egypt: 0.96 bpsd/capita and Nigeria: 0.3 bpsd/capita.

”The following figure shows how the capacity utilisation of Nigeria’s refineries has underperformed by such a large extent. Globally, refining is a very low margin business and refineries have to be kept working very efficiently 24/7 in order to make any profit. The Nigerian refineries however are performing well below capacity.

”Across the refineries, capacity utilisation has fallen from a high of just under 60per cent in 2002 to just 14per cent in 2014 (left hand chart below). To have any chance of succeeding commercially, Nigerian refineries need to operate on a globally acceptable cost structure and need to operate at 90per cent utilisation or more.

”In addition, the yields from the Nigerian refineries are not optimum. The yield is the proportionate mix of each type of refined product a refinery can produce. The optimal yield for a refinery takes into account the characteristics of that refinery and the value of the value added products that can be produced.

The Nigerian refineries are producing less of the value added products than is optimal. ‘’It is important to describe these sub-optimal performances of the Nigerian refineries because (as is shown in the following sections of this Policy), a strong commercially viable and significant refining sector is an essential part of the Petroleum Policy.” But hope does not seem to be completely lost as the policy has adopted the $12 billion Dangote refinery as a strategy to escape from the importation trap.

It stated that: “Crude oil will not simply be exported but a significant and growing proportion of government equity crude oil will be sent to local refineries (whether private or public).

Under the implementation of the petroleum policy, oil will be refined within Nigeria and further used to create significant end products to create value for the nation.

“The Petroleum Policy intends to move the Nigerian economy away from using crude oil sales as a source of income to one with oil based petrochemical chemical industries and gas based industrialisation.

The intention is to: achieve a competitive supply of petroleum products; make Nigeria a refining hub; introduce petrochemical industries to realise the full value from oil refining.”

Vanguard

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NIMASA FLOATING DOCK: Born By Good Intention; Wrecked by Good Intentions! 

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NIMASA FLOATING DOCK: Born By Good Intention; Wrecked by Good intentions! 

…As Industry watchers gravely worry that, Mobereola’s ‘good intention’ may finally seal its fate!

It is the simplest question in the world: ‘If your community has a N50 billion investment, what would you do with it; manage it well or honestly wreck it?’

The Maritime industry is a Community. It has enjoyed a leadership succession of highly credible, good-intentioned, competent Chief Executive Officers. Yet, it has abysmally suffered and incarcerated and laid prostrate, more from good intention, perhaps, far more than anything.

Now, how do you blame a man, with good intentions, until you are berthed at the Nigerian Maritime industry?

A former Director General of NIMASA, Dr Patrick Ziakede Akpobolokemi has very good intentions. He imagined what life could be if the incoming students of the Okerenkoko Maritime University could have a N50 billion modular floating dock to play with, in furtherance of gaining enviable practicals, while acquiring the skills required to meet the high seafaring certificates.

Pronto, he secured Abuja approvals, to dip hands into the Agency’s coffers and procured a N50 billion modular floating dock. 

However, before the brand new equipment could arrive on June 11, 2018, Akpobolokemi’s tenure had ended, alongside, both his good intention and the ‘myopic desire’ to take such gargantuan, multi-billion Naira equipment to a remote riverine village in the Niger Delta.

L-R: NIMASA DG, Dr Dayo Mobereola and Ewalefoh the ICRC Chief Executive Officer, a few days ago in Lagos.

The emergence of Dr Dakuku Peterside was a testament to another CEO, who was not only good intentioned, alongside his amiable Deputy, Dr Bashir Jamoh, but also, arguably, more ‘patriotic’!

Arguably, their patriotism, perhaps uncoordinated, however, spelt doom for the modular floating dock, and placed it on the travails into limbo!

First, they discovered that the floating dock could serve its original purpose of providing practicals for Okerenkoko Maritime University students, as well as generate money for Nigeria, whose economy had begun to show signs of serious cracks.

Consequently, their wiser decision and template therefore, resulted in the need to shop for a better location in Lagos, where the dock could be deployed to drydock local and foreign vessels and thus generate tens of billions monthly; even as students are opportune to come to Lagos, do their practicals and still get paid.

The agency is a regulatory concern. They should have handed it over to any indigenous operator, masters of the art like the STARZS Ship repair yard and set standards; but they decided to first look for a conducive location. 

Those who believe that the government has no business running business probably have seen it all.

First, they secured a temporary parking site, where the agency allegedly paid about $30,000 per night, and moored it there. Religiously, the agency allegedly began to pay bills as if they were settling hotel accommodation!

It was possible that the agency later forgot its floating dock was actually parked where, it continued to demolish dollars, like the barracuda demolishes smaller fishes. Within a short period of three years, the agency had paid the first instalment of the first N3bn…!

It was possible that, during that period, the members of the National Assembly, from both the Red and Green Chambers continued to come on oversight functions. It was also possible that, during the same period, the agency continued to go to Abuja for its ritualistic budget defences!

NIMASA FLOATING DOCK: Born By Good Intention; Wrecked by Good intentions! 
Nigeria’s modular floating dock, decaying, corroding, providing remarkable shelters for water hyacinth and other reptiles in Tin Can Island waters…!

Responding to inquiries, Enyeribe Anyanwu in Ships and Ports, some five years ago, wrote in pain, demanding apologies from Dr. Dakuku Peterside.

“Dakuku owes Nigerians apology over N50bn floating dock mess”, Anyanwu cried out thus:

‘At a recent press conference in Lagos, the Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Dakuku Peterside, took time to explain the circumstances that have kept the modular floating dock the agency acquired at a whopping cost of N50billion idle since June 11, 2018, it arrived in Nigeria.

‘According to Peterside, the major reason why the floating dock has not commenced operation is because the agency has not secured an operational berthing space for the dock. 

‘He said where the floating dock is currently situated only serves as a storage berthing space where operation of a floating dock cannot be undertaken. 

‘He further explained that at the time the floating dock was acquired, NIMASA had intended to deploy it to Okerenkoko in Delta State but could not do so because of reports by experts coupled with security challenges in the region. Based on these factors, the agency decided to situate it in Lagos.

“Originally, it was designed to berth in Delta State but even at that time, there were lots of reports advising to the contrary. Those reports are still there to date. When we got here, we were forced to review all these reports and make a decision that we think will serve the best interest of the country and the shipping community,” said Dakuku.

L-R: NIMASA DG, Dr. Dayo Mobereola and Ewalefoh the ICRC Chief Executive Officer, a few days ago in Lagos.

But, if the Ships and Ports incisively provided an insight, the mmsplusng.com on 25 July 2021 alerted the industry: 

“N50bn NIMASA Floating Dock Loses Class, N21.6bn Potential Earnings”, calling attention to the fact that a management decay had become noticeable concerning the floating dock.

Three months earlier, primetimereporters.com on 18 March 2021 had mentioned this: NIMASA Floating Dock: Another conduit pipe to milk Nigeria’s scarce…”

But, while Dr. Dakuku was still explaining the situation, his tenure ended, and Dr. Bashir Jamoh took over.

Now, Jamoh happened to be both good-intentioned and enviably foresighted. 

He didn’t want to suffer the same fate as the Nigerian Ports Authority NPA Floating Dock V, which allegedly sank following neglect occasioned by mere faulty pumps and valves!

He therefore meticulously aimed for the best, involving the ICRC and the NPA. A portion of the Continental Shipyard Ltd was worked on until it was secured.

It was further learnt that a functional bidder, with the best intentions, by the name J MARINE was secured, to midwife the vision. Thereafter, bureaucracy took over.

Each time they promised to deploy the floating dock to the location where it would yield revenue and create employment for Nigerians, something was sure to change the date.

Never mind the fact that the ‘OnePage Africa (https://onepageafrica.com › nimasa…) had gleefully reported on 24 Mar 2021: NIMASA, NPA conclude arrangements for the deployment of … with Dr Jamoh stressing, “I am here to affirm that the modular floating dock has come to stay. We have concluded arrangements for its deployment…”

Yet, instead of making money, it was leaking money. 

*NIMASA’s N50 billion modular floating dock in its first baptism of fire state, before its painful, rapidly deteriorating travail began…!

In nature, just as in the global maritime industry, there is no room for stagnancy: equipment is either slowly appreciating or rapidly degenerating. 

By September 7, 2022, the Daily Trust story encapsulated it thus: “The Nigerian Maritime Administration and Safety Agency (NIMASA) has paid the sum of N13.5billion as wharfage charges for a floating dock, which it acquired three years ago, an investigation by Daily Trust on Sunday has revealed.

‘Wharfage is the fee charged to cover the cost of using a wharf. It includes the cost of nocking unto the dock electricity and maintenance service since a ship cannot be locked up and abandoned like a car.

‘A senior management source at the agency told our correspondent that they paid around $30,000 daily as wharfage charges and other expenses.

‘The source said the agency might have paid $32.9million in three years.

‘The claim is consistent with the disclosure of a former executive director, operations of the NIMASA, Rotimi Fashakin, who explained that insecurity in the Niger Delta region made it difficult for the agency to berth the dock at Okerenkoko as originally conceptualised.

‘He said, “Indeed, the floating dock was supposed to go to Okerenkoko in Delta State, but with the conditions that exist now, it is almost impossible. A dock is supposed to serve the shipping community as a commercial facility, but which company or vessel would be bold enough to travel to Delta State?”

‘The NIMASA is a regulator and not an operator, so giving the dock to an operator also needs to go through the bureaucracy of government”.

Seemingly seeking to get the best, the Dock wobbled into 2023, suffering one distraction after another. The agency was either trying to install a dolphin or a mooring pole or facing manmade obstacles from the NPA.

One day, nature got tired of it all; and by an act of the gods, a storm pounced on it, tore it out and dragged it out of its safe abode, until it became a threat to other costly equipment. 

Like a stray bull, by the time it was finally caught and restrained, it could not be said, that a few marine facilities had not been damaged.

*The nation’s floating dock, in its new, lonely location…

Now, when you catch a stray bull, hardly does it enjoy mercy. Needless to say, this has since become the painful fate of the Agency’s N50,000 modular floating dock. 

Of course, it deservedly got punished: it was taken to and beached in pathetic loneliness, in a not-so-safe place, far from the media’s prying eyes!

Se eyi t’o se, ore mi ojo nlo. Eyi t’o ba se, la o royin…is a popular song in Osun State. Both the DG and the Minister of Marine and Blue Economy might have sung that song in the early 80’s.

Presently, mum is the word at the agency. No one wants to talk about it, particularly its location, its growing loneliness, as well as its rapidly depreciating state. Yet, the N50bn, excluding other avoidable expenses, does belong to all Nigerians!

WORLD MARITIME DAY: We'll Adhere To Global Safety Standards, says Oyetola 
Minister of Marine and Blue Economy, Chief Adegboyega Oyetola

Ever since then, the agency has deliberately kept the media perpetually in the dark, panning fielding questions in ways that provided false hopes and optimism, creating dreams which consistently tilt to be a mirage.

Perhaps, this was the major reason which guaranteed the wholesome euphoria which welcomed Dr. Dayo Mobereola’s announcement, as the Director General.

Mobereola came in with stupendous academic certificates and an enviable wealth of experience, garnered from the Lagos Metropolitan Transport Authority LAMATA. He fielded the questions beautifully, each time he addressed the press. He says all the right words. He wonderfully says the hard words, softly. No wonder he enjoys the confidence and hearty goodwill of core industry operators which included Capt Emmanuel Ihenacho and Engr. Greg Utomwen Ogbeifun, amongst others!

However, weeks have grown into months since he assumed office; and industry watchers are sadly watching what remains of the NIMASA modular floating dock, sadly, finally turning into a wreck!

The ICRC Chief Executive Officer, Ewalefoh only a few days back was a hallowed Guest of the DG; pledging the assurances of the ICRC to go in search of Investors, to promote a Public Private Partnership PPP climate.

He probably does not know the current, wasting state of the Agency’s gold mine!

An industry watcher pointedly asked Maritime First: “What else did they discuss? Or, did they deliberately sweep the floating dock issue under the carpet?”

At this point again, one cannot but remember to ask that simplest question before NIMASA Director General, Dr Dayo Mobereola: ‘If your community has an N50 billion investment, what would you do with it as a CEO; manage it well or honestly wreck it?’

 The National Assembly may have forgotten about the NIMASA’s floating dock. But industry watchers are aware that the Senate Committee Chairman on Marine Transport, Distinguished Senator Eshilokun has not been so far from Lagos, not to understand that if the floating Dock is deployed tomorrow, a good fraction of those who will be employed there would be the good people of Lagos State!

Someone had expressed concern that the Minister of Marine and Blue Economy, Adegboyega Oyetola had not shown adequate interest in the welfare and deployment of the modular floating dock. But, his apathy can be understood, he had never been a maritime person in the real sense… and so, may not see the dire economic importance of a floating dock, especially in terms of employment and revenue generation!

Perhaps, Nigerians should by now be asking too, how the NIMASA’s modular floating dock unfortunately became an orphan: even after the Federal Executive Council FEC officially handed it over to a preferred bidder. 

The DG should confirm to Nigerians, the name of the preferred bidder and what the bidder has contributed, even if lamely, to the rapid development or deterioration of the floating dock!

Perhaps, President Bola Tinubu was 100 per cent correct, when he recalled the old national anthem!

Industry watchers are not expecting the NIMASA to be professionally administered like the Nigeria Customs Service, whose leadership, and CGC not only was grown through the ranks but was adequately prepared before the appointment. Yet, they do not anticipate a regime that like Nero, would diddle with flute and trumpet, while Rome burns!

The Yoruba adage succinctly says it with meaning: Se eyi t’o ba se ore mi ojo nlo. Eyi t’o ba se la o royin… (Do that which is needful, quickly; for time waits for no one!)

Mobereola is perhaps at the threshold of history: he will Save Or Sink the nation’s floating dock, along with its unrealized dreams, failed prayers and a plethora of good intentions!

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NIMASA: PPP Model, A Vibrant Necessity for Maritime Infrastructural development, Says Mobereola

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NIMASA: PPP Model, A Vibrant necessity for Maritime Infrastructural development, Says Mobereola

…As ICRC DG assures: “We are ready to Partner with NIMASA to Develop the Maritime Sector”

The Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dayo Mobereola has expressed a determination to adopt the Public Private Partnership (PPP) model, stressing that it remains the most viable option for a quick infrastructural development of Nigeria’s maritime sector.

Dr. Mobereola stated this, while hosting the Director General of the Infrastructure Concession Regulatory Commission (ICRC), Dr. Jobson Oseodion Ewalefoh, who swiftly assured the Director General of ICRC total support in his desired goals.

Dr. Mobereola noted that the maritime sector is uniquely capital intensive, hence government funds cannot solely be able to put in place the required infrastructure, therefore,

emphasized the importance of the Commission’s increased involvement in attracting private investors to develop infrastructural capacity in Nigeria’s maritime sector.

Accordingly, Mobereola said; “We appreciate the Management of the ICRC for being responsive. However, 

“You know that the maritime sector is capital intensive and government funds cannot solely put in place the required infrastructure. We need the ICRC to develop PPP-based business models that will be attractive to the private sector, both from within and outside the country”, Dr. Dayo Mobereola stated, while appreciating the ICRC management, for being responsive to industry needs and challenges. He then added:

 “There is the need to streamline processes by the use of technology, as we will continue to count on the support of ICRC to help drive the Agency’s PPP projects for effective and efficient service delivery to our stakeholders”.

Dr. Jobson Oseodion Ewalefoh, who supported the NIMASA DG’s position, however, underscored the significance of the maritime sector, to Nigeria’s economy, as he noted that the PPP model would facilitate increased funding and expertise from the private sector, thereby accelerating the growth and development of the Nigerian maritime sector.

Speaking further, Ewalefoh highlighted that the ICRC was prepared to engage with the Agency on its projects and ensure timely execution.

“There is no time to waste; our country needs lots of funding for infrastructure and we need to create an enabling environment for activities to thrive. 

“First, is service delivery, not revenue generation, and people will be willing to pay if they get the right services”, the ICRC boss noted.

The two Chief Executive Officers jointly agreed that the PPP model has proven to be the most viable approach worldwide, for driving government policies that promote development and economic growth; and as a regulatory agency and Nigeria’s Maritime Administration, NIMASA has consistently embraced collaboration and partnership through the PPP initiative to ensure the growth and development of the maritime sector.

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Naira Crude Sale Has Set Economy On Path Of Industrialisation – Edun

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Naira Crude Sale Has Set Economy On Path Of Industrialisation – Edun

On Tuesday, Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun said the sale of crude in Naira to local refiners had set the Nigerian economy on the path of industrialisation and modernisation.

Edun, chairman of the committee, said this while addressing State House correspondents after a meeting with President Bola Tinubu to review the sale of crude in Naira to local refiners at the Presidential Villa.

According to him, the bold initiative, endorsed fully by the Federal Executive Council (FEC), ensures crude oil is sold to local refiners in naira, who in turn sell refined products to marketers in naira.

He said although there was much to be done, there was a clear path to industrial development and modernisation of the Nigerian economy, because the key prices were right, which was encouraging private sector investment.

“With private sector refining of crude oil, we now have raw materials, not just for agriculture, but for industry, for chemicals, for paints, for building materials and textiles.

“And of course, this is Mr President’s strategy and his policy of making conditions right for the private sector to invest, create jobs and grow the economy.

“Likewise, the market pricing of petroleum products has also paved the way for NNPC to restore its balance sheet, restore its financial fortunes, and give the federal, state and local governments more funding.

“This allows them to meet their obligations, salary payments to workers, social services to the population generally, and key infrastructure development,” said Edun.

The Minister said the meeting reviewed the progress of the initiative to ensure that the initial obstacles to successful implementation of the sale of cruse in naira to domestic refiners and the correlating sale of petroleum products in naira were overcome.

He said Afrexim-Bank, the financial adviser, was a part of the meeting and would act as an intermediary to ensure that the parties – the seller of the crude, and the buyer of the crude – were able to complete their transactions.

Edun said the scheme initiated by the President, was made possible also by the courageous and bold investment of the Dangote group, in a local refinery of 650,000 barrels per day capacity.

He said the implementation committee and the sub-committee had worked assiduously with all stakeholders to ensure the initiative was implemented.

The stakeholders include the regulators, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NNDPRA) and the Nigeria Upstream Petroleum Regulatory Commission (NUPRC).

Others are the Nigerian Maritime Administration and Safety Agency (NIMASA), NNPCL, Nigerian Ports Authority (NPA), the Navy and a host of other stakeholders.

Alhaji Aliko Dangote, chairman, Dangote Refinery and Petrochemical Company, said his company would be able to satisfy local demand with the supply of crude so far by NNPCL.

“This initiative will revive a lot of industries in plastic, cooking gas, which is LPG, aviation, gas, Oil, not only PMS.

“At about 420,000 barrels per day, we still can grow. We are ramping up our capacity. Once we get there, we have enough Naira crude, we’ll be able to fully satisfy the market.

“But when NNPC refineries start working going forward, then Nigeria will be one of the biggest exporters of Petroleum products in history,” said Dangote.

He said the President pledged at the meeting to support domestic industries, allow local refineries to work, and attract more investment into the country.

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