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Ripples over multi billion naira Apapa Port Terminals’ project

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  • As 11.35 tonnes of dead fish  washed up in Chinese lake

The redevelopment contract of Bullnose I,II and III terminals in Apapa, Port Complex by the Federal Ministry of Transportation and Nigerian Ports Authority (NPA) awarded to Eko Support Services (ESS) in 2008 at $124 million (about N40,920,000,000) is causing ripples in the maritime industry.

Maritime stakeholders said they were uncomfortable, not only with the cost of the contract, but also the process that led to the award of the project to ESS which they alleged was shrouded in secrecy.

The push for the redevelopment and the award of the contract which was through a letter from the Managing Director of NPA dated 3rd of June, 2008, to the then Minister of Water /Transportation, was said to have been done in response to Federal government’s initiative for private sector participation in ports development.

But maritime watchers opined that in line with due process and transparency, the initiative should have gone through a public tender to afford other interested private sector players the opportunity to bid. Officials of the Federal Ministry of Transportation last week declined comment on the issue. The NPA also refused to comment on the controversy over which some stakeholders are contemplating petitioning the Presidency, the ICPC, and the Bureau for Public Procurement which vets awards of contracts. They argued that since it was government’s idea that the private sector should be involved, then it was only fair that the contract award and pricing, should also have been subjected to private sector participation.

A maritime industry insider said it would be difficult not to assume that the beneficiary firm was handpicked by the awarding authority. ‘’Obviously, the NPA handpicked ESS and went ahead and recommended the company for this project,” the insider said, wondering why the supervising ministry did not raise any issue on the process leading  to submission of the proposal by only ESS.

It was learnt that in the proposal, ESS offered to handle the project at a cost of $127 million, but that following what the then NPA boss said was the approval of the proposal by a Technical Committee and vetting of the proposal by NPA’s Technical Channel Auditors, Messrs Coastal and Reclamation Engineering Services, (CARES), NPA recommended that the project be scaled down to $124 million, indicating a margin of just $3 million lower than what ESS proposed.

Said the insider: “Even by today’s standard, that redevelopment project could be achieved with a little over $50million,” stressing that a technical audit of what is on ground would tell you vividly that this is not a project that should cost what was allegedly approved.

Also being contested by ports observers is the fact that the project cost would be amortized through service boat charges in all the ports in Nigeria. “In simple term, said an investment analyst, NPA has awarded a Terminal redevelopment project to, as the insider put it, “ a so-called private player, with NPA providing the exorbitant and inflated cost of contract, through charges collected on behalf of NPA by the contractor,” adding, “yet NPA will not have control of the Terminal for 25 years.” What that means, the insider explained, is that the facility will be used exclusively by the same contractor for the quarter of a century.

Other stakeholders, in picking holes with the contract, pointed to loopholes with regards to the estimated cost of $124million recommended by CARES, with the proviso that it is accepted pending the determination of the actual cost from the final design; that the cost of financing of 16 per cent be applied to the cost of the project and hat the lease should be for an initial period of 25 years.

The stakeholders argued that the term which says $124million is accepted pending the determination of the actual cost from the final design is loose, What would then happen if the winners now make a detour, and insist from the final design analysis, that the cost has increased by 200 per cent, they queried?

They said on balance the development is quite troubling. “Since the money will be amortized from the service boat charges which belongs to NPA and is a sure stream of inflow, why should the cost be this high? they queried, saying the more crucial implication is that both the cost of the project plus the cost of financing put at 16 per cent would be borne by the Nigerian Ports Authority.

“Since that contract was signed the government may have incurred an interest charges equivalent to over 100 per cent of the $124 million price tag claimed by ESS. Ultimately this company could collect as much as $500 million for a project that its real cost should not be more than $50million. This is very saddening because there are even investors that are ready to acquire these terminals and redevelop them with their resources, not using government money and charging government interest on it,” another NPA insider said.

Another insider said it is because of alleged anomalies like this that experts have always called on Federal government to beam its searchlight on the running of the ports from 1999 to 2010.

They said past governments made efforts to bring sanity to the sector, but such efforts appear to have ended up being  frustrated by top government officials with more than professional interest in such questionable transactions.

In the meantime, at least 35 tonnes of dead fish have washed up in a lake in southern China.

The fish were found floating on the surface of Hongcheng Lake. Dozens of sanitation works have been put to work cleaning up the fish in an effort to prevent any of them being sold to consumers.

Reports in the Global Times say the government is still investigating the cause of the phenomenon, though experts have speculated that the death of the fish was a result of fluctuations in the waters saline levels.

Experts said the fish likely came from the larger, saltier Nandu River, before experiencing a sudden drop in salinity levels when the tide swept them into the freshwater Hongcheng Lake.

Saltwater fish cannot survive in fresh water, as more water is able to enter their bodies causing blood vessels to rupture.

Despite expert statements, reports say that the public are still concerned that the deaths may have been caused by pollution, which may also harm the human population.

In August 2014, a large number of fish died at northern China’s Tianjin port due to a warehouse blast that polluted the air and water with highly toxic substances.

Nation with additional report from MSN

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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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