disbursement

DEPUTY Registrar of Ships for Liberian Government, Capt. Tony Onoharigho, has advised Nigerian government against direct disbursement from the Cabotage Vessel Finance Fund, CVFF. This, according to him, is to avoid another mismanagement of ship acquisition scheme like happened with the Ship Acquisition and Ship Building Fund, SASBF.

The Minister of Transportation, Rotimi Amaechi, recently announced that the Federal Government will be ready to disburse the CVFF in 2020.

Onoharigho said government has a responsibility to avoid the past mistakes where ship owners failed to utilize grants responsibly under the former scheme.

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Earlier, Captain Mohammed Bashir, former Managing Director of Apapa Bulk Terminal Limited and erudite master mariner warned about the integrity of some of those lining up for the CVFF, and suggested a stringent risk control system for the disbursement of the Fund.

The experts who are concerned about high credit risk on the part of Nigerian ship operators suggested risk management oversight from the government.

Onoharigho who doubles as President of Nigerian Institute of Shipping, NIS, advised that government should use the CVFF proceeds to buy crude oil tankers and set up a committee to oversee management of the vessel rather than give the money directly to ship-owners.

He argued that the crude tankers have the capacity to reasonably drive Cabotage Trade under a Public Private Partnership, PPP, arrangement.

His words: “Government should not release the money to individuals as it used to be. The first ship acquisition fund that was released before now was given to individuals and some of them did not buy good vessels.

“What the government can do is to form a PPP arrangement. The government and the business men should come together, where government would acquire the vessel and form a committee that would oversee management of the vessel.

“The committee can be made up of government officials, ship-owners and others. If you leave it for the government alone just like the Niger Line, it would go under because government alone cannot manage a shipping line.

“My recommendation is that they should concentrate on acquiring tanker vessels and not cargo vessels. They should buy one or two VLCC (Very Large Crude Carriers). Government should also make it mandatory that whenever the VLCC arrives at NNPC, it should be given priority to load our crude oil to the international market. By so doing, we can generate more money to buy more vessels and put life into the Cabotage Trade.”

Capt. Bashir suggested that until ownership syndrome is set aside and ship-owners are able to merge for higher capacity to participate and drive Cabotage Trade, foreigners will continue to dominate the coastal and crude transportation sector.

He said: “I keep telling people that the best you can do when there is no local capacity to participate in Cabotage is to merge, forget about wanting to be managing director with rusted ships that dare not go near NNPC platforms.

“Apart from Admiral Kanu, Engr. Ogbeifun and two others we have pretenders all over the place. Ship is different from a car. If your car handbrake is not working well, you can decide to postpone the repairs till next month, a ship must be done by a certain date or it will be documented out of class, a ship has maintenance manual and date.”

“Both government and many individual players in the shipping sector are bad business people who lack maintenance culture, and a ship cannot tolerate that. “Most of the people who got SASBF are also in the race for CVFF. There should be risk control mechanism before funds are disbursed otherwise CVFF will end up the way SASBF ended.”

The CVFF domiciled with the Nigerian Maritime Administration and Safety Agency, NIMASA, is believed to have accrued to the tune of $300million.

Early this year, the immediate past President of Ship Owners Association of Nigeria, SOAN, Engr. Greg Ogbeifun called for an audit of the Fund.

 

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