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CVFF: More experts warn against unprotected disbursement

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Stories by Eguono Odjegba


MORE experts in the  maritime industry have joined in calling for a proactive risk control mechanism to be put in place in the disbursement of the Cabotage Vessel Finance Fund, CVFF.

Speaking to Vanguard Maritime Report on this, Capt. Tony Onoharigho, Deputy Registrar of Ships for Liberian Government, advised the Nigerian government to avoid another mismanagement of ship acquisition scheme like what happened with the Ship Acquisition and Ship Building Fund, SASBF of the early 1990s.

Onoharigho who doubles as the President of Nigerian Institute of Shipping, NIS, said government should ensure that beneficiaries utilize the fund appropriately and recommended 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.

READ ALSO:Lack of financial plan hinders indigenous ship ownership – Prof Ajogwu

He argued that the crude tankers has the capacity to reasonably drive Cabotage Trade that has been under the firm domination of foreigners since its inception in 2006.

His words: “Government should not release the money to individuals as it used to do. The first ship acquisition fund that was released before now was given to individuals and some of them did not buy good vessels. This was what brought about the stringent measures in accessing the CVFF fund.

Acquisition of tanker 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 it would go underground 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 live into the Cabotage Trade.”

Also, Captain Mohammed Bashir, former Managing Director of Apapa Bulk Terminal Limited, who is also a master mariner, urged government to carry out proper profiling of beneficiaries to weed out individuals without loan servicing integrity, and who may divert the fund to other base ends.

Bashir warned that without stringent risk control system in place, the disbursement may end up as a national cake sharing, and specifically suggested that FG should advise merger option that can boost the efficient administration of the fund to meet its desired objective.

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. But 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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