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Ship owners oppose move to float publicly owned shipping firm

By Guardian Nigeria
30 September 2009   |   3:50 am
NIGERIAN ship owners have condemned in strong terms the move by the Federal Government to float a National Shipping Line, about 15 years after the defunct national carrier, the Nigerian National Shipping Line (NNSL) was liquidated.

The ship owners, under a national umbrella, Indigenous Shipowners Association of Nigeria (ISAN), said the proposed shipping line would fail like any other public institutions, as “government is a bad businessman.”


Chairman of the association, Chief Isaac Jolapamo told newsmen in his Apapa office, Lagos over the weekend that government was not properly advised on the matter.

He revealed that government had already earmarked N5 billion for the shipping line project, adding that the new move was disturbing.

“The reported approval of N5 billion for the establishment of a government owned National shipping line is to say the least, disturbing. Has the government not learnt bitter lessons from the demise of the Nigerian National Shipping Line (NNSL), its successor, the Nigerian Unity Line (NUL) and even the Nigerian Airways in the aviation sector?”

Jolapamo described the move for the establishment of a new national carrier as absurd, adding that it was coming on the heels of government divestment from businesses in line with modern global trend and practices.

Instead of the government to continue in this trend, it said, it was listening to: “Some unpatriotic elements that have been dragging it back into the same venture it is trying hard to wriggle out of.”

Continuing, Jolapamo said: “We believe that government has been wrongly advised by people who might be pursuing their own selfish agenda. The move to set up a government-owned national carrier could certainly not be in the country’s best interest because it will certainly be used as a conduct pipe by corrupt persons who in the face of narrowing avenues of fraudulently short-changing government of its revenue, conceived the idea as an alternative measure. It is absurd that while government is continuously divesting itself of the responsibility of running business in line with modern global trend and practices, some unpatriotic elements are trying to drag it back into the same venture, it is trying hard to wriggle out of,” Jolapamo said.

Warning the Federal Government not to yield to any temptation of floating a shipping company, he said what was necessary now was the encouragement and support for the private sector initiatives and enterprise for accelerated development.

“One of such initiatives is the formation of a mega shipping company known as ISAN shipping company with the take-off capital of N1 billion was formed at the instance of government which encouraged all Nigerian shipping companies to come together to form a formidable platform.”

According to the ISAN chairman, the domination and the stronghold of foreign shipping companies are formidable hence the floating of the ISAN shipping company as a national carrier, a company that will not only serve Nigeria coastal trade but one that will also acquire VLCC and ULCC to effectively participate in the afreightment of the national crude.”

He therefore urged the government to provide conducive environment for ISAN shipping company to thrive, instead of going into the business of shipping at a time government was divesting from active business.

On cabotage vessel financing fund, the ISAN chairman called on the government to avoid the ills that befell the defunct Ship Acquisition and Ship Building Fund (SASBF) by making sure that only genuine shipping companies benefit from the proposed vessel financing loans.

“It has come to our notice that over N14 billion has accrued into the Coffers of the Cabotage Vessel Financing Fund (CCVFF). ISAN welcomes the directive of the minister of Transport to NIMASA to commence disbursement of the fund before the end of the year so that it can serve the purpose for which it was created.”

He, however, cautioned the government not to allow the exercise to be hijacked by portfolio ship owners who might end up abusing its objectives.

“You may also recall that this was what led to the abuse and the untimely death of ship acquisition and ship building Fund (SASBF). We therefore advise the government to ensure that the CVFF disbursement guidelines are strictly adhered to for the benefit of the sector,” he insisted.

Jolapamo also announced the arrest of yet another vessel, MT Union Triumph to bring the numbers of vessels arrested under cabotage implementation programme to six.

According to him, ISAN had to commence the arrest of foreign vessels that failed to comply with the provisions of the cabotage Act because of the failure by the government to effect effective implementation and enforcement of the coastal and inland trading law.

“If anything, the plight of indigenous ship owners is worse off now than it was six years ago. It is not about competition, it is all about discrimination, while ISAN does not abhor competition, we abhor discrimination in our own country.”

He alleged that government agencies were conspiring and colluding against Nigerian ship owners and” have decided to assist foreign ship owners to disobey the provisions of Nigerian Cabotage law”.

“This is flagrant disregard of the law is not necessarily due to lapses in it, but essentially due to the inability of implementing agencies to enforce the provision of the law. There is serious conspiracy and collusion by all the government agencies as well as unscrupulous Nigerian business concerns. This had led to the stubborn resistance of the cabotage law on the part of foreign ship owners and operators.”

Because of discrimination, he said, virtually all Nigerian shipping companies are now going through a most difficult time. “Our vessels are lying idle and running costs without jobs to do. Most of us have been unable to pay salaries and service our loans facilities for upwards of eight months. Several of us have even pawned properties and other assets to make ends meet. We could not afford to continue to fold our arms and watch helplessly as foreigners destroy our sector. We had to make bold move by engaging the services of lawyers to arrest vessels that flout the cabotage law”.

So far the Nigerian ship owners have arrested six vessels; MT Makhambet, MT Lovell Sea, MT, Union Grace, MT Union Force, MT Torrent, MT Union Pride and MT Union Triumph.