The House of Representatives on Wednesday issued a 7-day ultimatum to the Minister of Transportation. Hon. Rotimi Amaechi and Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Mele Kyari over the award of multi-billion naira contract for coastal shipping of petroleum products in the downstream sector to an unregistered foreign shipping company named UNIBROS in breach of the Coastal and Inland Shipping Act (also known as the Cabotage Act) of 2003.
Chairman, House Committee on Nigerian Content Development and Monitoring, chaired by Legor Idagbo, issued the notice at the end of the investigative hearing on the petition from Ship Owners Association of Nigeria (SOAN).
Chairman, Federal Inland Revenue Service (FIRS), Mohammed Nami in a letter addressed to the Committee, affirmed that the foreign company did not register in the service’s database and has not paid any tax to the Federal Government.
On his part, Director General of Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Bashir Jamo, who accused NNPC of frustrating indigenous shipping companies, disclosed a vessel must be owned by Nigerians, manned by Nigerians, registered and built in the country, adding that any vessel that does not comply with the provisions of the Cabotage Act violates the extant laws.
He observed that the Minister of Transportation is empowered by Section 15(1) of the Cabotage Act to grant provisional licence to an indigenous shipping company by way of waiver for a year, in order to ensure that it does not cripple the nation’s economy.
“Even if the indigenous shipping companies do not have the capacity, the provisions of the Cabotage law should be respected,” Jamoh said.
While stressing that NIMASA lacks the statutory powers to grant waiver, he affirmed that the agency was saddled with the responsibility of processing the waiver approved by the Minister.
Also speaking at the investigative hearing, SOAN President, Mkgeorge Onyung alleged that NNPC, which conducted a closed bid, awarded the contract to 11 foreign flagged coastal tanker vessels belonging to UNIBROS in breach of the Cabotage Act and the Presidential Executive Order No 5 signed by President Muhammadu Buhari.
Onyung, who frowned at the breach of extant local content laws, also accused NNPC of abuse of Customs regulations to gain unfair advantage in the award of contracts to foreign vessel owners for coastal shipping of petroleum products in the downstream sector of Nigerian maritime industry.
According to him, Africa has market share of $1 trillion out of the $14 trillion global market share, which Nigeria is yet to benefit from.
He explained that 11 shipping companies in the world which are owned by the Norwegians and Chinese made about $50 billion half year profit, not minding their capacity but based on available opportunities.
The SOAN President further lamented that though Nigerian ship owners were willing to accept Naira denominated payment, NNPC gave the contract to a foreign ship owner in dollars.
He argued that the contract award will result in amplification of capital flight, valued in excess of $100 million annually to the detriment of Nigeria’s economy, adding that no Customs import duty has been paid for any of the 11 vessels in breach of our nation’s fiscal and monetary policies.