Nigeria: Ban the importation of some categories of vessels used for cabotage trade.

[Dredging360.com]

Shipowner backs proposed embargo on cabotage vessels importation

The immediate past President, Shi-owners Association of Nigeria (SOAN), Engr. Greg Ogbeifun, has lauded a plan by the Federal Government to ban the importation of some categories of vessels used for cabotage trade.

The Federal Government had, through the Nigerian Maritime Administration and Safety Agency (NIMASA), notified the Nigeria Customs Service (NCS), the Nigerian National Petroleum Corporation (NNPC) and the Nigerian Content Development and Monitoring Board (NCDMB), among others of its plan to effect the ban beginning from December 2020.

Speaking in an interview with SHIPS & PORTS, Ogbeifun said the proposed ban on importation of cabotage vessels is an indication of the Federal Government’s renewed interest to develop indigenous capacity in the shipping sector.

He, however advised the government on the need to begin to look at reviving the local steel industry and ship building yards as a crucial step towards the implementation of the policy.

He said, “For me, this is probably the oldest policy statement that has been made in the industry with respect to genuinely wanting to grow in-country capacity in the area of ship building.

“The biggest single element that is critical to the actualization of this policy is the maritime infrastructure; the ship building yards. We have a few shipbuilding yards that can do shipbuilding and ship repairs including the Continental Shipyard, which belongs to government, but some of them are moribund. They need to be reactivated.

“We may initially start by importing steel. If we don’t also look at that sector to become functional, then you are weakening the implementation of the policy. With this type of policy statement we have heard, the government has no choice but to make the likes of Starzs Shipyard, Nigerdock, Continental and other shipyards to come into full operation, if they must back up their statement.”

Ogbeifun noted that the level of compliance, especially by government owned agencies who import vessels for their operation, will also determine how effective the ban would be.

“We have to understand that it behoves on everyone of us to make that happen. It behoves on people who acquire ships from abroad to see this as a positive step towards investing in this country.

“The Nigeria Ports Authority (NPA) and NIMASA are ship owners; therefore we have to come together to understand that the policy that the government has come out with, laudable as it is, will affect even the government because the government through NPA is one of the biggest buyers of ships in the country.

“Government cannot come out with the policy and tomorrow you hear that NIMASA is now ordering for security patrol vessels from Damien Shipyard.”

Ogbeifun called on government to review tax policies and create incentives especially on tariff to enable indigenous ship owners compete favourably with their foreign counterparts and for the actualisation of the long awaited national fleet.

Speaking on the timeline set to having the policy actualized, Ogbeifun said, “If at the timeline set, all they were able to achieve is to put infrastructure in place, and produce one ship in each category, that is an achievement.”

The Nigeria Customs Service, among the other agencies, is expected to begin enforcement of the policy upon the expiration of the deadline by 2020, considering the two schedules of vessels restricted.

Under schedule one, fishing trawlers of all sizes will no longer be allowed into Nigeria from the end of December 2020, while the importation of barges and tug boats is banned from the end of December 2021.

Offshore supply vessels, houses boats, tankers below 10,000 GRT and security patrol boats are also affected and would not be allowed into the country from the end of December 2022.

Schedule two affects offshore support vessels namely AHT larger than 5,000bnp with dynamic positioning PSV and offshore construction vessels, derrick crane vessels, pipe/cable laying vessels, surf laying vessels, and dive support vessels.

The vessels are banned from the end of December 2023 while the Drag Head Suction Hopper, Dredger Suction Hopper and Trailing Suction Hopper Dredger are restricted entry from the end of December 2024.

Also banned from December 2024 are Heavy Floating Cranes, Heavy Crane Badge, Survey Salvage Vessels, Seismic Survey Vessels, Geophysical Survey Vessels, Jack up Rigs, Semi submersible rig, Deepwater Drillships, Tender assist Rigs and Swamp Barge rigs.

[Dredging360.com]

Vessel importation: Lack of facilities threaten planned ban

The Federal Government has set aside five years to end importation of certain categories of vessels under the abotage arrangement into the country.

The move is to restrict the majority of the country’s seaborne traffic to local transport operators and to secure income for idle domestic fleet and local shipyards.

Challenge

Presently, there is dearth of shipyards in the country to build and repair ships of various sizes.

It is feared that shortage of funds, absence of investments, including the present shipping infra-structure and technology in Nigeria, would be a clog in achieving the objectives of policy.

Apart from infrastructural decadence in the maritime industry, the country does not have the technology to explore the shipbuilding sector when compared to other shipbuilding countries like Japan, South Korea and South Africa.

The vessels

Some of the vessels affected are the heavy floating cranes, heavy crane badge, survey salvage vessels, seismic survey vessels, geophysical survey vessels, jack up rigs, semi-submersible rig, deep water drill ships, tender assist rigs and swamp barge rigs.

Already, Nigerian cabotage policy is hinged on four major pillars, which include: Nigerians must wholly own cabotage vessels; cabotage vessels must be registered in Nigeria; cabotage vessels must be manned by Nigerian citizens and cabotage vessels must be built by Nigerian shipyards.

However, cabotage implementation in the country has not offered enough business opportunity for local vessel operators to participate in coastal shipping, as the tide of foreign domination of the industry persists since the enactment of the law in 2003.

The Coastal and Inland Shipping (Cabotage) Act 2003, which came into force in 2004, was enacted primarily to reserve the commercial transportation of goods and services within Nigerian coastal and inland waters to vessels flying the Nigerian flag, owned and crewed by Nigerian citizens as well as built in Nigeria.

Enforcement

Already, the Federal Government has directed the Nigerian Customs Service (NCS), Nigerian Maritime Administration and Safety Agency (NIMASA), Central Bank of Nigeria (CBN), Nigerian National Petroleum Corporation (NNPC) and the Nigerian Content Development and Monitoring Board (NCDMB) to be among agencies to enforce the import restriction from December 2020.

In the plans, customs is expected to begin enforcement of the policy upon the expiration of the deadline by 2020, considering the two schedules of vessels restricted.

Under schedule one, fishing trawlers of all sizes would no longer be allowed into the country from the end of December 2020, while the importation of barges and tug boats is banned from the December, 2021.

Similarly, offshore supply vessels, house boats, tankers below 10,000 gross registered tonnage and security patrol boats are also affected and would not be allowed into the country from the end of December 2022.

Also, schedule two affects offshore support vessels namely anchor handling tug larger than 5,000bnp with dynamic positioning Platform Supply Vessel (PSV) and offshore construction vessels, derrick crane vessels, pipe/cable laying vessels, surf laying vessels, and dive support vessels.

The vessels are banned from December 2023 while the Drag Head Suction Hopper, Dredger Suction Hopper and Trailing Suction Hopper Dredger would be restricted from coming into the country by December 2024.

Also banned from December 2024 are heavy floating cranes, heavy crane badge, survey salvage vessels, seismic survey vessels, geophysical survey vessels, jack up rigs, semi-submersible rig, deepwater drill ships, tender assist rigs and swamp barge rigs.

Commenting on the restriction, a former President of the Ship owners Association of Nigeria (SOAN), Engr. Greg Ogbeifun, said that the proposed ban on importation of cabotage vessels was an indication of the Federal Government’s renewed interest to develop indigenous capacity in the shipping sector.

He explained that those people who acquire ships abroad would see the decision of government as a positive step towards investing in shipyards in the country.

The ship owner advised government to revive the local steel industry and ship building yards as a crucial step towards the implementation of the policy.

According to him, this is probably the oldest policy statement that had been made in the industry to grow capacity in the area of ship building in the country.

Option

Ogbeifun added: “The biggest single element that is critical to the actualisation of this policy is the maritime infrastructure; the ship building yards. We have a few shipbuilding yards that can do shipbuilding and ship repairs, including the Continental Shipyard, which belongs to government, but some of them are moribund. They need to be reactivated.

“We may initially start by importing steel. If we don’t also look at that sector to become functional, then you are weakening the implementation of the policy. With this type of policy statement we have heard, government has no choice but to make the likes of Starzs Shipyard, Nigerdock, Continental and other shipyards to come into full operation, if they must back up their statement.”

He noted that the level of compliance, especially by government-owned agencies, which import vessels for their operation, would also determine how effective the ban would be.

“We have to understand that it behooves on every one of us to make that happen,” he added.

He stressed the need for government agencies such as the Nigeria Ports Authority (NPA) and NIMASA, which are also ship owners, to come together to understand the policy.

Ogbeifun noted that the laudable policy would affect government through NPA, which is one of the biggest buyers of vessels in the country.

He said: “Government cannot come out with the policy and tomorrow you hear that NIMASA is ordering for security patrol vessels from Damien Shipyard.”

Tax policy

However, the former president urged government to review tax policies and create incentives especially on tariff to enable indigenous ship owners compete favourably with their foreign counterparts and for the actualisation of the long awaited national fleet.

Ogbeifun further explained that if the timeline set to achieve the policy was to put infrastructure in place and produce one ship in each category, then it would be an achievement for the country.

Last line

If there were no ship building and repair yards, the policy would be an exercise in futility.