It is a path that had been walked before with a familiar tale of perfidy. In its haste to acquire a floating dry dock, it overlooked a schoolboy procedure in project planning. How does an organisation begin the process of acquiring a floating dock in 2013 and five years later after the platform arrived Nigerian shores, it occurred to the organisation that no plan had been made to build a facility where the vessel would be docked.
That is the story of the Nigerian Maritime Administration and Safety Agency (NIMASA) when against the advise of industry professionals, it over reached itself to venture into acquiring a platform for dry docking vessels.
However, it is not only the failure to set up base for the platform that NIMASA was found wanting. By the time of the arrival of the multi- million dollar platform, it was yet to decide where the dock will be located and, more remarkably, it had no plan on how the platform will be managed and operated. In effect, even though the facility was brought into Nigeria earlier on June 11, 2018, it will remain idle for the coming months while the agency figures out how to deploy the floating dock.
It was a scenario that had been anticipated by indigenous shipping operators who had repeatedly cautioned that the venture was outside the purview of NIMASA’s core competence and calling. They had cautioned that despite the attraction and seeming viability of venturing into ship repairs, it was better left for the private sector. Going into ownership of platforms is an uncharted territory for NIMASA whose enabling law gave it the mandate to evolve measures to prop up the fortunes of local shipping operators and get Nigeria involved in competitive international shipping.
“We explained to them that such venture will ultimately amount to a waste and go the way of NPA’s partnership in setting a ship repair company. The idea was a good one, but the partnership was not well structured and the running of the company was still tied to the notoriously sluggish civil service procedure. In the time-bound international business of running ships on strict schedules, it only requires a number of defaults in completing dry dock repairs for ship owners to make up their minds and go elsewhere,” the chief executive of an indigenous shipping company told Business and Maritime West Africa.
Indeed, the Nigerian Ports Authority had set up Continental Shipyards Limited, a joint venture investment between it and Dockyard Engineering Service Limited of Geneva, Switzerland. The partners pulled together an equity share participation of 60 percent and 40 percent respectively in favour of NPA. Ten years down the line, it’s a story of woes. The shipyard has been abandoned and today stands as a giant metaphor for waste and a reminder of the intolerable high level of indiscipline in the management of public organisations. Years before its final abandonment, the shipyard had been rendered idle following mismanagement and willful vandalism of spare parts by those in whose custody the management of the facility was placed.
During the period this negligence and levity lasted, the management was incurring running costs and paying salaries to over 200 staff for doing virtually nothing.
The high level of indiscipline in the management of public organisations was on full display in the entire process of NIMASA’s acquisition of the floating dock. It was only after the arrival of the dock in Nigerian waters on June 11 that NIMASA began scampering for a facility where it could berth. Terminal operators at the ports demanded daily berthing charges of between $35,000 to $52,000 while Nigerdock, the Snake Island, Lagos-based ship repair yard, offered to receive the platform at $26,000 daily. Of course, NIMASA was put off by the high fees which do not include the over $5,000 per day cost of running the platform even while it is idle.
“If the reasons for buying the dock was altruistic, the arrangement would have been tardy. You do not just go and acquire a floating dock which takes some year to build only to realise on delivery date that you don’t have where to deploy it. No business venture is done that way,” a master mariner said.
On the way forward, experts are unanimous in their recommendation that the platform should be deployed to the Niger Delta area, the core operational base of the oil and gas industry. “Actually, it was what NIMASA used to justify its insistence on acquiring the dock. They maintained, and rightly so, that Nigeria was losing a lot of money from the hundreds of vessels servicing the oil industry that are forced to patronise docks in Cameroun and Ghana. The floating dock was supposed to target those vessels. But with no plan on ground on how to manage and operate it, there is real danger that the dock will remain idle for many months or may end up never really deployed. And that will be a shame,” the master mariner said.
The partnership model NPA adopted in managing its Continental Shipyard does not appeal to industry experts. “Using partnership with a private organisation as NPA did is a sure recipe for disaster. The private company will not be given a free hand to run the venture under partnership. What I think is best now is for companies to be invited for screening to take over the running of the dock,” he stated.
Under the arrangement advocated by industry experts, the most competent company should be appointed to manage the platform with a performance bond entered into. Using industry templates, the bond should clearly spell out the duration during which the floating dock can be amortised and determine how much should be remitted to NIMASA annually. They said NIMASA should focus on an exit strategy and should not delve into the day to day running of the dock.
The dockyard project was initiated in 2013, while the actual construction work started in 2014 at the world’s largest ship building firms, Damen of Netherlands, but was stopped and started again in 2016.
The dock has a length of 125metres, breadth of 35metres, fitted with three inbuilt cranes, transformers and a number of ancillary facilities.
According to stipulations by the International Maritime Organization (IMO), every vessel undergoes dry-docking once every three years in order to retain their safety classification and insurance cover. It costs between $300,000 and $500,000 to dry-dock a vessel, according prevailing international rates. Information gathered by Business and Maritime West Africa has it that on the average, 5,000 ships, 400 active coastal vessels and several hundred fishing trawlers call at Nigerian ports annually. This factor alone ensures a steady rise in the demand for ship repair and maintenance facilities in Nigeria.