maritime Transport

Nigeria loses billions of naira over deficient dry dock facilities

  • As Ghana takes shine off Nigerian Ports

Despite controlling about 70 per cent of shipping and international trade in West and Central Africa, Nigeria’s lack of viable dry docks is costing the country billions of naira. The cost is incured as there appears to be no deliberate attempt by the government to establish functional dry docks across the country.

Nations that own ships or receive vessels to its seashores normally see ownership of dry docks as a necessity since no nation can truly be called a maritime nation without a vibrant ship repair and shipbuilding activity.

Today, Nigeria’s economy is losing several billions of naira to capital flight due to the dearth of docking facilities to dry dock over 6000 vessels sailing into the country.

In line with International Maritime Organisation (IMO) regulations, every vessel must undergo dry-docking at least once every three years to retain their safety classification and insurance cover. It costs between $300,000 and $500,000 to dry-dock a vessel, according to prevailing international rates.

In some maritime nations, dry docks being an integral part of shipping business are established to conserve foreign exchange, build indigenous capacity as well as promote technological advancement.

However, Daily Sun learnt that most vessel owners both within and outside the country are dry docking their vessels at Ghana Drydock and Slipway facilities at the Tema Port. The Tema Shipyard is one of the largest shipyards and dry-docks on the African continent. Strategically located on 48.45 acres of land in the Centre of the West African sub-region, it is situated adjacent the commercial Port of Tema, Ghana.

In the past, Nigeria had few dry dock facilities rated world class and viable then. Few years after their establishment, they were either sold or parked up and converted to other enterprises. The dry dock facilities include, Nigerdock and the Continental Shipyard Limited

Nigerdock, the fledging ship repair yard, at the point of breakthrough, was sold to a private firm, which turned it to other business enterprise, thus terminating Nigeria’s dream of possessing a world-class ship building and repair yard that could have served it and the entire sub-region.

Another attempt was made in 1992 when the Nigerian Ports Authority (NPA) entered into a joint venture with a foreign firm, Dockyard Engineering Service Limited of Switzerland to establish the Continental Shipyard Limited. The company was established to undertake ship repairs and maintenance, construction of navigational bouys, steel structures and offshore construction and procurement.  The venture could not deliver on its promises due to mismanagement, bureaucracy, negligence and levity. Regrettably in 2010, the Company’s floating dock was grounded. The facility was consequently left to rot away.

After the two previous dry dock facilities went aground, the Nigerian Maritime Administration and Safety Agency (NIMASA) under its former boss, Patrick Akpobolekemi, negotiated for a N50 billion floating dock, which arrived the country in June 2018.

Since the floating dock arrived the nation’s shore, it has been lying idle and rotting away as it has never been put into operations.

Despite lying fallow, the vessel gulps millions of naira daily in running cost and maintenance.

Recently, one of the vessel management companies in the country, the Nigerian Liquefied Natural Gas (NLNG) Company, NLNG Ship Management Limited (NSML), said none of the dockyards in Nigeria can dry dock any of its LNG vessels. The company has to dry dock its vessels out side the country.

Speaking to Daily Sun, Advisory Head/CEO, Kamany Marine Services Limited, Charles Okorefe, said that there is no deliberate attempt made by the government of Nigeria to ensure that functional dry docks are established, despite being money-spinning enterprises.

“We are aware of the floating dock by NIMASA for N50 billion and that floating dock has not been able to be deploying for operations anyway. Those are the kind of things we should be looking at. Why spend so much money on such expensive facilities without proper plans to deploy it?

“Now we have Continental Shipyard at Apapa, whichhas been vibrant and has a facility, a floating dock that was busy all year round until it was parked up and there is no replacement. There is another one called Nigerdock where vessels are repaired also went aground, the place is now privatised free trade zone. These are the issues,” he added.

According to him, if Nigeria that commands about 70 per cent of shipping and international trade in West and Central Africa does not have dry docks, what would happen is that people will take their vessels elsewhere including those who are trading in Nigeria or sailing to Nigeria for one business and the other.

“So if Ghana is smart enough to provide such facilities, why not Nigeria? Business is about strategies. If we are not strategic enough to put in place facilities that will aid our trade and earn us income, smarter environment and nation will take the initiative.

“The NIMASA floating dock is a fresh thing and is still there. Instead of generating money, is losing money where it is anchored at the Navy dockyard. So these are the contending issues. We need to be smart and proactive because a dry docking activity is a money-spinner any day.

“That Continental dock yard I’m talking about, in 2008, when I took some Leadway executive there on a tour, we were told that floating dock was booked in March in following year. What that tells you that there is business. So if there is business and you’re not trading that thin that will give you money, others who have better initiative will take it up. I think that is the case in Ghana right now,” he added.

He said policy formulators in the industry should go back and fashion out ways that the nation’s dry dock floating facilities can become effective and efficient.

Speaking in Lagos recently, the Managing Director, NMSL, Abdul-Kadir, Ahmed said the Company takes its vessels out of the country for dry-docking because the Nigeria lacks capacity and facilities to dry-dock any of its LNG vessels.

But, the NMSL boss said his company would have wanted to dry-dock its 11 LNG vessels and one LPG vessel in Nigeria due to the huge revenue such would generate for the country, but for lack of dry-docking facility that can handle an LNG vessel in the country, the company is forced to dry-dock its vessels outside the country.

He said: “Yes, capital flight is an issue when it comes to dry docking of our LNG vessels. However, underpinning that issue of capital flight is the capacity and ability to do it here in Nigeria. As a Nigerian ship management company, it is so much easier for me to dry-dock our vessels here in Nigeria, that is if there is anywhere I can do it but, at the moment, there is no facility in Nigeria that can dry-dock vessels of the sizes that we manage.

“I don’t want to sound critical but realistic, there is currently no facility in Nigeria that can handle any of our LNG vessels. I am not saying there are no dry-docking facilities in Nigeria but, if you understand the nature and size of an LNG vessel, then we will all know that there is nowhere in Nigeria that such vessels can be dry-docked as at today.”

Ahmed, however, disclosed that the company planned to set up a standard dry-docking facility in the country to put an end to capital flight that is occasioned by dry docking vessels outside Nigeria.

“But, most importantly, underpinning ability is capacity development, and we have already embarked on that path. As part of our Bonny Gas Transport (BGT) Plus Project, there was a scheme to bring in Samsung and Hyundai together with some Nigerian investors to establish a dry-docking facility in Nigeria. Unfortunately, the scheme has not fully taken off, but we are still optimistic. We hope that when it fully takes off, it will commence effectively at the right standard.

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