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Terminal Operators Expend More As NPA Declines Reinvesting – Report

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• Firm Audits Ports Concessioning 10 Years After
• Darkness Prevails At Nigerian Ports
• 24 Hours Operations Not Working

Ten years after port reforms, which transferred ownership of no fewer than 27 terminals to private concerns, the Nigerian Port Authority (NPA) is yet to provide the necessary infrastructure that will reduce cost of doing business. The ports are yet to be connected to the national grid. There has also been no provision for full port access to enable effective operations.

This was the observation of an independent report by an audit firm, made available to The Guardian recently.According to the report, the NPA had signed concession agreement with the terminal operators in 2006, to provide reasonable assistance for the supply of independent power plant at the ports premises, but till today, nothing has been done, making the operators to spend part of their profit on private electricity generation.

The NPA is said to have partially complied with the agreement relating to the provision of general security of the port, comprising land and sea entrances to the ports, beside the provision and maintenance of perimetre fencing at the port boundaries.

The NPA had also agreed with terminal handlers to maintain suitable number of navigational aids, such as floating lights, lighthouse and radio-navigational system such as GPS, DGPS and beacons among others. The NPA, according to the report, is yet to comply fully with the agreement.

The report also said the NPA has partially complied with the aspect of port concession agreement relating to provision of port services and vessel management, provision of pilotage, towage berthing, unberthing and shifting of vessel services required by vessels intending to call at the port premises.

In the area of the provision of access to Port premises, road and rail access to the ports, the authority was accused of only partially honouring the agreement, making cost of doing business to skyrocket.

The only aspect of the agreement, which NPA has nearly complied with, is channel dredging, which has increased the draft on the channel to 13.5 metres, from about seven metres before the reforms.

This is on the heels of compliance by the operators, to secure the terminal, provide infrastructure and equipment, as well as agreed on the throughput volumes and remittance of fees.

The reports also identified factors working together to increase cost of doing business at the port despite concession.One of such factors, it said, is the lack of compliance with necessary documentation procedure by shippers.

It said incorrect documentation and lack of proper compliance by consignees to Customs policies is still prevalent at the Nigerian ports, leading to incorrect declaration of goods and massive revenue loss to government.

It also said incorrect documentation could be as a result of negligence or deliberate attempt to evade payment of Customs duty and tariff.
Aside the observed discrepancies, time of operation pegged at 24 hours is not realistic, as Customs, working hours are between 8a.m. and 5p.m.

“The restriction on the working hours negatively impact the shipping line, terminal operators and consignees, as in the event of a ship needing to leave at night, shipping lines have to wait extra hours for the arrival of tug boat drivers and, therefore, incur extra overhead cost,” it said.

The report bemoaned the increasing number of overtime cargoes, saying it has reduced efficiency of operations at the gateways through congestion, while terminal operators continue to be the losers.

“Majority of cargo in the Nigeria Container Terminals spend more than three days free storage allowances in the port and there is an increasing number of overtime cargo to the detriment of the terminal operators,” which it said are not able to recover full revenue from overtime cargo, while the yard ends up congested with overtime cargo.

The spiralling inflation and declining value of the naira have reduced seaport terminal operators’ earnings by over 230 per cent, according to the report, which is about to be made public by the consultancy firm.

It said although terminal operators invested over N200b between 2006 and 2015, they have also incurred revenue loss of about N58.9bn within the same period.

The report also identified insufficient power supply, dilapidated port access roads, traffic gridlock and uncertainty of policy direction among others as some challenges hindering port operations in the country.

According to the report, the 2006 port concession had resulted in significant improvement in port operations in the country.“For example, there has been the emergence of larger vessels with improved cost effectiveness, improved cargo-handling technology and delivery speed, as well as reduced unit freight cost.

“In addition, the concession has increased Nigeria’s port competitiveness, while reducing waiting time for ships and enhanced movement of goods across international borders and offshore manufacturing,” it stated.

The report further explained that the sector witnessed increased participation of foreign and private investors in terminal operations, investment in new port facilities and equipment, as well as investment in automated computer tracking system and establishment of new ports.

Explaining further, the report said private sector developments and Nigerian Ports Authority (NPA) were responsible for the improvement in the overall key performance indicators (KPIs) at the ports, including ship waiting time, ship turn around time, dwell time, container moves per hour, Customs examination time and overall cargo clearance time.

 

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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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