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Obasanjo awarded $841.6m rail project without MoU –Chinese firm

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  • As Senate explains why there were problems with 2016 Budget

The Project Manager of a Chinese civil engineering and construction company, Etim Abak, on Monday told the Senate Committee on the Federal Capital Territory that former President Olusegun Obasanjo awarded the Abuja Rail Project in 2007 without an engineering design or a Memorandum of Understanding.

The Minister of FCT and current governor of Kaduna State, Mallam Nasir el-Rufai, allegedly signed the $841.645,898m contract based on an uncalculated estimate.

The committee was also told that the contract, which was for 60.67-kilometre rail project, was inflated by $10m per km and that the length was later reduced to 45km without refund of the cost for the 15.67 km that was dropped off from the project.

The Senate committee, led by Dino Melaye, who were at the site of the project to carry out oversight functions, therefore, demanded the refund of $195,878,296.74 being the amount for the 15.67km that was cut out, from the Chinese firm handling the project.

Abak told senators that the contract was signed by the then FCT minister without design and MoU, and that it was carried out based on conceptual design.

Abak said, “The contract was awarded based on conceptual design and estimates were not properly done. There was no formal design submitted and rail bridges and crossover bridges were not captured in the contract.”

Melaye said his findings revealed that the rail project was inflated by over $10m per km and wondered why such an act was perpetrated by the handlers of the project.

The senator added that the contract sum was $841.645,898m and that the project completion period was 48 months while the scope of work was 60.67km standard gauge, with double railway tracks and associated permanent way within the FCT.

He wondered why the 60.67km project was later reduced to 45. 245km without reduction in its cost.

He said, “Now, you have reduced the length of the standard gauge from 60.67km to 45.245km, meanwhile, there is no concomitant reduction if you juxtapose the length in kilometres and the reduction in terms of the cost.

“If we are to spend $841m for 60.67km and now you have reduced to 45.245km and the only reduction in terms of monetary value is from $841.6m to $823m and with a reduction of just about $17m, that to me is not commensurate to the reduction in terms of length.

“The Federal Government has so far invested N31.5bn and another N7.6bn from the SURE-P fund and if you put these together, we have altogether N39.1bn invested in the rail project, leaving the balance of N113. 233,155.32.

“The N3bn proposed in the 2016 national budget for the FCT was for the rail project. If you look at this, I would want to say that I did a personal research and looked at rail construction of the same specifics, of the same technology across the globe and one cannot but complain that the cost of railway project in Nigeria is on a very high side.”

He wondered why it was costing the Federal Government so much to construct a railway of just 45 km unlike the construction of the same specifics across the globe.

He questioned the rationale behind the government’s loan of $500m from Exim Bank of China for the project, saying that the money which the Federal Government had so far injected into the project was enough to execute the entire project.

He said, “From my own calculation, in fact, from my comparison with other rail projects across the world, the Federal Government investment in this project is enough to execute the project without taking a loan as high as $500m from China.

“From our research and it’s very simple, the world is now a global village. As you are sitting here now, on your phone you can google, even in India and Egypt.

“Fortunately, one of those projects in Zambia was also done by this same company, CCE. We have six countries and the average cost per km, none is above $4m per km. Why is the Nigerian project costing $13.8m approximately $14m?”

In the meantime, the Senate Leader, Ali Ndume, on Monday said that the problem the 2016 budget is presently having is because it was rushed before submission to the National Assembly by President Muhammadu Buhari.

He spoke with State House correspondents after meeting with President Buhari at the Presidential Villa, Abuja.

According to him, the problems associated with the document would however be sorted out to enable the budget to be signed into law.

He said: “We are working on the budget daily. We are working on it collectively for the first time.

“The Executive and the Legislature are looking at the budget collectively. This is the first time we will be doing it this way.

“The matter is not about a date. If we can finish it today, we will hand it over for signature tomorrow.

“In those days, we just pass budgets that are normally not implemented. This is the first time we are doing a budget that the President is looking forward to implement.

“This budget was done in a rush and you know there are some issues that are cropping up. It is no longer going to be business as usual.

“So, those unusual things, if detected, we will work on them. It is not as if we are holding on to the budget. We are working collectively,” he added.

His consultation with the President, he said, was necessary because there were other bills pending before the National Assembly which requires such consultations.

He said: “There are issues that are really on ground. One is the budget. We also have two bills before the Senate that we need to start working on when we resume tomorrow. The Money Laundering Bill and the Criminal Information Sharing Bill.

“There are issues other than those ones that are really on ground. This is how we are supposed to be doing it earlier. That is, coming into the Villa to consult and guide the proceedings in the Senate appropriately.

“Other than that, I don’t want you to see it as an unusual visit. I will be doing this often because this is how it is supposed to be.

“Again, I normally consult with the President on a personal basis long before he became the President, so it is not unusual. ” he stated.

He disagreed with the suggestions that he was at the Villa to intercede on behalf of Senate President, Bukola Saraki over his ongoing prosecution at the Code of Conduct Tribunal (CCT).

He said: “I am not the Senate President. The question should be directed to the Senate President. “You are asking me what I do not know. I consult and if I have to mediate on anything, there should be a problem. I do not know of any problem,” he said.

Punch with additional report from The Nation.

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WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners

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…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development. 

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA  to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity. 

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years. 

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

Mike Igbokwe (SAN)

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further. 

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA. 

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers. 

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being. 

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained. 

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Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live

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The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: www.maritimefirstnewspaper.com and on Youtube: Maritimefirst Newspaper.

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Wind Farm Vessel Collision Leaves 15 Injured

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…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg. 

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt. 

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital. 

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News

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