Category: Maritime

The Akran of Badagry, an ancient city in Lagos, De Wheno Aholu Menu Toyi 1,has raised the alarm over the threat of the Atlantic Ocean to his domain.

He blamed illegal dredgers for the ocean threat, warning that if their activities along the creeks were not checked it would spell disaster for Badagry.

He spoke at the Seventh National Dredging Summit and Exhibition in Badagry.

He said unlawful dredging was impacting negatively on the environment, citing two peninsula communities in Badagry – Ajido and Okogbado – where illegal dredgers activities have reduced the distance between the sea and the communities to about 50 metres.

The monarch also decried the activities of sand miners whose jobs, he said, were also threatening some parts of the Mile 2-Badagry Expressway, noting that such activities have formed artificial lakes. When such artificial lakes are formed, they (sand miners) will abandon there and relocate to another area. He cited an area where sand mining has created a big gully that is threatening to break a major road into two.

If these illegal activities are allowed to continue unchecked, he said, the proposed road construction from Takwa Bay to Badagry might be stalled.

He praised the Lagos State Government for its intervention in fighting illegal dredging and surface mining. He said Governor Babatunde Fashola visited the areas and directed that the activities be stopped, warning that whoever is caught would be jailed.

Besides keeping security personnel to watch out for offenders, he said helicopters also conduct aerial survey from time to time, adding that he gave approval to legitimate dredging firms to provide sand to meet the needs of the people of Badagry.

According to him, there are legal dredgers on the stretch from Topo to Marina, that pump sand from the river to serve the needs of the people as a measure to discourage illegal dredging.

He noted that if not for the efforts of the Lagos State government in controlling the activities of illegal dredgers that part of the state might have sunk by now.

The summit Coordinator, Mr Edmund Chilaka, said the programme was a yearly gathering of dredging, maritime and marine sector operators and stakeholders to deliberate on the state of the industry to improve services, expanding the knowledge base of practitioners and contributing to the growth of indigenous operators.

He stressed the need for improvement and development of indigenous dredging firms, saying that most of them are not properly managed and lack the right calibre of personnel.

Chilaka said: “The observation over the years is that Nigerian dredging outfits managed by Nigerians are constantly run as one-man family ventures, which struggle from project to the next in spasms of neither poverty nor affluence, with staff salaries and debts to service providers not regularly paid, while the managing director or chairman is busy flying from Europe to America usually with the first advance payment.

“You constantly find that in many of these companies, essential staff like accountants, clerical officers, site engineers and supervisors are not officially employed. Rather the owners would deploy family members to man these and any position at will.”

The Nigerian Maritime Administration and Safety Agency (NIMASA) Executive Director, Maritime Labour and Cabotage Services, Mr Nwabueze Calistus Obi, represented by the Head of Department, Maritime Labour Services, Mrs. Juliana Gunwa, stressed the importance of dredging to the maritime sector and the economy.

She said: “Dredging is used for port developments all over the world because it enhances shipping routes and depth of water for vessels to avoid grounding and accidents. It is also serves as a big source of employer for both skilled and unskilled workers. It boosts import and export trade, and used to shorten navigational distances for ships, thereby saving cost and time for ship owners as in Panama Canal, Kiel Canal and Suez Canal, just to mention a few, for without dredging activities, this could have been very difficult to achieve.”

 

Background

The countdown has begun to the end of their job at the ports. By the end of December, service providers will call it a day at the seaports, paving the way for the Customs to take over their job. The snag is can the Customs cope?

The service providers, including Cotecna, Global Scansystems Limited and others, use the Risk Assessment Record (RAR), an information communication technology (ICT) platform, to process cargoes for clearance. This process involves the use of scanners to detect contraband and under-declaration of goods’ value.

Although Customs Comptroller- General Abdullahi Dikko says his officers are prepared for the took, whose information generation will be based on Pre-arrival Assessment Reports (PAAR), stakeholders’ believe that the agency will revert to 100 per cent physical inspection after the service providers’ exit.

The implication of 100 per cent inspection is the resurgence of congestion as cargoes will be delayed, with importers paying more on demurrage. The end-users bear the brunt as such costs are passed on to them.

 

Concerns

When Apapa Port was transferred from Cotecna to Global Scansystems, cargo processing was upset, causing delays and problems between the Customs and the service provider to the detriment of importers.

For instance, an importer whose cargo was wrongly lifted by the terminal operator is suffering the non-alignment of roles between the Customs and the operator. The duty on the importer’s cargo was assessed at $106,125 (about N16 million) by the terminal operator. The operator, through a letter to the Customs, admitted error on valuation, and requested that the goods be released to the importer. But the Customs held on to the goods and the demurrage kept rising.

Besides, congestion is building up at the ports, thus defeating the essence of the ports reform, particularly the concession to private terminal operators which is intended to reduce the cost and time of cargo clearance.

In a petition to President Goodluck Jonathan, the National Association of Government Approved Freight Forwarders (NAGAFF) expressed worry over the rising, but avoidable congestion at the ports.

In the petition signed by its Secretary-General, Increase Uche, the association said: “It is a fact that the concept of automated custom examination is to facilitate trade. It is also a fact that the contract terms with the service providers are to enable automated custom examination for all imports into Nigeria. These are deliberate efforts on the part of government to make our ports friendly, competitive and to add value.

“It would seem that proper home work was not done, or that it is a mere neglect of responsibility on the part of those who did the verification of contract terms and performance duties. This has led to a seeming uncoordinated process. The situation at the ports, especially Apapa and Tin Can Island ports (TCIP), is that the operational capacity of the scan unit cannot work upon more than two hundred containers a day out of the expected 700 containers per day, thus leaving a balance of 500 TEUS per day, each way.

“On the average, for five working days, the backlog of 2500 containers are left unscanned in each of the ports. You may wish to know that out of the 2000 containers scanned; about 750 are entered as “suspect” leading to physical custom examination. This is a case of double handling and waste of time. The so called suspected containers, most times were because the parking arrangement of the laden containers were unprofessionally done leading to a shift in position of cartons, added to the fact that the hydro scanners are the analogue model whose image output are laughable because you may not make anything out of it in terms of image analysis and goods description.

“The above situation is a clear signal of avoidable congestion with its negative consequences to the economy. It is our considered advice and opinion that you consult with the Comptroller General of Customs with a view to addressing the situation. There is no doubt that the service providers may not have taken into consideration the inward cargo throughput of Nigeria ab- initio, before deploying these analogue scanners.”

 

Stakeholders’ view

The National Secretary, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Uchu Block, expressed doubt over the effective implementation of PAAR after the service providers’ exit.

He said there were lot of things that service providers, such as Cotecna, did not do at its former controlled Apapa Port.

“There are lots of problems between Customs and Global Scan as a result of improper handover from Cotecna. The Customs claimed they have a platform which has not been unveiled to stakeholders at the ports. They would have been operating the platform alongside the service providers’ to be able to identify their teething problems before the terminal operators leave. With what is on ground, there may be a breakdown in service on exit of the service providers,” he added.

The Customs spokesman at Tin Can port, Chris Osunkwo, however, told The Nation that he couldn’t understand the fears of stakeholders on the ability of the Customs to competently manage the ports on the exit of the servcie providers, confirming that men of the agency have been properly trained to take over.

He said: “The truth is that I cannot understand their fears. Anything that happens at the port, they blame the customs but the problem is strictly between Cotecna and the terminal operators. The terminal operator should know the capacity of the terminal, if it takes 1000 containers, why go for 5000 containers?

“The terminal operator positions the containers for Customs’ examination, generates data for customs’ image interpretation and analysis, among others. We facilitate trade and don’t collect demurrage. Our duty is to protect our borders and government’s revenues. The problems are none of the Customs.

“On our readiness, I can assure you that we are more than ready to take over. We are carrying along the importers, the agents and other stakeholders on PAAR.”

Dikko also warned terminal operators who do not have the necessary cargo handling equipment. He said such terminals would be shut down.

Stakeholders are concerned that the Customs and the service providers are not collaborating to ensure a seamless transition at the point that the agency would assume control of goods clearing.

They said without integration now that the service contract is subsisting, service delivery may not be easy when the Customs assume control.

 

Background

THE marine logistics subsector is set for greater things. Two local firms have acquired five ships to boost their operations. The Ocean Marine Tanker (OMT) brought in two tankers, MT Abiola and MT Igbinosa; CNS Marine Nigeria Limited acquired three vessels – Adessa Ocean King, Adessa Legend, and Adessa Sea Protector.

While Ocean Marine vessels are for cargo, the CNS Marine’s are for offshore support and conveyance of personnel on offshore engagements. The vessels, according to the Nigerian Content Development and Monitoring Board (NCDMB), will benefit the country immensely, both in capacity development and job creation. The board has since its establishment, and passage of the Nigerian Content Act in 2010, been spearheading campaigns to promote ownership of vessels by Nigerian firms. It encourages banks to fund such projects to build in-country capacity.

 

Benefits

The Executive Secretary, NCDMB, Ernest Nwapa, told The Nation that before the introduction of local content in 2006, over 95 per cent of the yearly budget in oil and gas industry, including maritime activities and logistics, was spent on foreign companies.

Nwapa identified the marine sector as one of such areas with high impact in employment, retention of industry spend, technology transfer and value added services. He said the Board has endeavoured to protect the sector, making it one of its focus of Nigerian Content Act implementation strategies.

He said the board stood against the issuance of Temporary Import Permit (TIP) for indigenous marine vessels, as it discourages indigenous ownership and registration of marine vessels in Nigeria, thereby conferring advantage to foreign vessel owners.

He stated Nigeria has lost over $100 billion in revenues in the last five decades to lifting and conveying of crude oil by foreign owned tankers, saying the trend is being reversed as Nigerian firms are increasingly getting involved in the subsector.

Nwapa explained that vessels owned by foreigners undergo repairs and maintenance work outside Nigeria, while Nigerians have the capacity to do the jobs, saying under the new development, such jobs would be carried out in-country in ship yards in Nigeria.

He said: “The TIP not only discouraged the ownership and registration of marine vessels in Nigeria, but also gives advantages to foreign vessel owners, who are allowed to pay a token to the government for bringing in their vessels. Furthermore, it promotes the practice whereby vessels that work in Nigeria, sail to neighbouring countries to meet their TIP conditions and undergo repairs concurrently, whereas such maintenance can be done at ship yards in Nigeria.

“The sector used to be dominated by foreign owned vessels, crews and rig operators, resulting in $3 billion capital flight. But with the Board’s marine vessel and rigs ownership strategy, the trend is changing with increased indigenous participation.”

Nwapa said indigenous players are currently participating fully in the smaller vessel category, thereby retaining about $1 billion out of the annual expenditure in that area, adding that a structured intervention for more Nigerian ownership of the larger offshore vessels has been put in place, with a potential for retaining a further $1.5 billion in the next two years.

He said with the drive by the Board, it would ensure that by the year, 2020, the ownership profile in the marine sector would be more locally-driven with retention in excess of $4 billion per year, 250,000 employment and training opportunities.

 

Job creation

Nwapa said with the trend, an estimated $191 billion can be retained in Nigeria as activities are carried out here, and besides, over 300,000 new job opportunities can be created in engineering, sciences and technical services with over 65 per cent of the total industry budget domiciled in-country.

During the inauguration of MT Abiola and MT Igbinosa in Warri, Delta State, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, said the Nigerian Content initiative has attracted foreign direct investments worth over $500 million in the manufacturing of equipment components for the oil and gas industry, as well as marine logistics.

She said the equipment components manufacturing initiative of the NCDMB, is an effective way to drive industrialisation of Nigeria, which has created over 1000 skilled jobs in the country.

She frowned at the domination of the downstream sector of the maritime industry by foreign tanker ships, with indigenous ship owners having minor role to play in the lightering and seaborne transportation of imported refined petroleum products destined for Nigeria.

MT Abiola and MT Igbinosa will transport crude oil to refineries and the international market.

The Director, Corporate Banking, Diamond Bank, financier of CNS Marine Nigeria Limited’s vessels, Samuel Egube, stressed the need for banks to support the marine logistics and support subsector.

He said Diamond Bank is the lead supporter for marine logistics in the country, adding that the bank is happy to see CNS Marine cross this major milestone. It is not just a milestone for this company, it is a milestone for Nigerian Content, he said.

“We will continue to do this because as we support companies that do this business, the companies will in turn support human capital development, and also create jobs for Nigerians. Divers, welders, among other professionals will benefit from the project,” Egube said.

The Managing Director/Chief Executive Officer of CNS Marine, Barry Adedamola, said: “The three vessels would help the company work offshore to serve international oil companies in offshore diving services, pipeline and seabed services. With the saturation vessel, we can dive down 300 metres, it also has a 50-tonne crane on it and at any given time we can take about 90 personnel offshore to do work.”

He said the project would create a lot of jobs and capacity in the economy. “We are hoping that with the training we will put in place, we can train more local people to work on these assets. We look for the support of the government in trying to do some of those things for we are fully committed 100 per cent Nigerian company.”