The sad story of another floating dock

The sad story of another floating dock

PHOTO CREDIT: Guardian

Dry docking is an integral part of shipping business. Ships must be in good shape to crisscross the world’s vast oceans. To ensure that a ship is always seaworthy, the world’s regulator of shipping, the International Maritime Organization (IMO), requires that every ship that trades internationally must be in class by being dry docked periodically. Every country that owns ships or receives ships to its shores usually sees ownership of dry docks as a necessity. In fact, no country can truly be called a maritime nation without a vibrant ship repair and shipbuilding industry.

Unfortunately, Nigeria as a maritime nation does not have a viable shipbuilding and repair industry. Dry docking facilities are very inadequate. The country’s giant step as far back as the 1970s which crystallized in the establishment of Nigerdock was truncated some years ago during the first tenure of former president Obasanjo’s civilian administration. Nigerdock, the fledging ship repair yard which had started finding its rhythm, was sold to a private firm which turned the facility to other uses, thus ending Nigeria’s dream of owning a world-class ship building and repair yard that would have served Nigeria and the entire sub-region. Consequently, the country has been losing billions of Naira in capital flight as it has to take its ships to other countries for dry docking, as well as losing the patronage of the over 5,000 ships that call at her ports annually.

Another attempt by Nigeria, through the Nigerian Ports Authority (NPA), to have a thriving dry docking facility was also an unmitigated disaster. In 1992, 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 promised a lot but delivered so little. Mismanagement, bureaucracy, negligence and levity were its undoing. In 2010, the company’s floating dock was submerged. The facility was said to have drifted and beached somewhere and was consequently left to rot away.

With all these still fresh in the memory of maritime stakeholders, they could not help raising alarm when the Nigerian Maritime Administration and Safety Agency (NIMASA) under its former DG, Patrick Akpobolekemi, dabbled into the acquisition of a floating dock. Though shipping operators and maritime stakeholders could not downplay the need for dry docking facilities in the country, they advised against NIMASA’s engaging in such a business venture, maintaining that it was outside its mandate as the industry regulator as well as being beyond its core competence. They also cautioned that despite the country’s need for dry docks and the seeming attraction and viability of venturing into ship repairs, it was better left for the private sector. NIMASA was also reminded that its enabling law gave it the mandate to empower local shipping operators, and to create the enabling environment for maritime business activities to thrive.

But all these admonitions and advice fell on deaf ears, as the Agency went ahead to negotiate for a floating dock. One would have thought that the business plan for the acquisition of the floating dock was just part of the impunity and profligacy that reigned supreme in NIMASA during Akpobolekemi’s regime, and that a saner management would either cancel the plan or make a tidier arrangement for the business venture.

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But that was not to be. Akpobolekemi’s successor, Dr. Dakuku Peterside, jumped on the business case as prepared by his predecessor, extolling its benefits to Nigerian ship owners and the nation. He maintained that the multimillion dollar floating dry-dock will save the country millions of dollars in capital flight once operational. Hence, he pursued the project with vigour.

“The decision to embark on the project was based on the realization at that time that “85 per cent or 90 per cent of those who own vessels dry dock their vessels outside the country, and we felt it encourages capital flight and that it doesn’t support the industry. So, it was at that point that we got into a relationship with a firm in Netherlands to build a floating dry dock in the Netherlands and in Romania. That project is on. When we joined the NIMASA team, we resolved to continue and follow it to its logical completion.” he explained.

On June 11 2018, the floating dock arrived Nigeria. The arrival of the facility caught the Agency napping. While expecting the arrival of the dry dock, it did not make the necessary arrangements to receive it. The floating dock floated on Nigerian waters for days before it finally found a berthing space at the Naval Dockyard in Victoria Island. Ten months after, the N50bn dry dock is still at the Naval Dockyard, lying idle, rotting away while the Agency appears bewildered as to what to do with it. NIMASA is yet to decide the location of the facility, how it is to be managed and who will manage it. Meanwhile, according to a source, while lying fallow, the vessel gulps about N3.6m daily (over N100 million monthly) as running cost.

Industry stakeholders are not sympathetic with NIMASA, since they see the unfolding scenario as a disaster foretold. What they did not expect, however, was that the disaster would begin with the arrival of the vessel. Speaking on the development, foremost ship owner and repair yard operator, Engr. Greg Ogbeifun, attributed the idleness of the N50 billion facility to lack of due diligence by NIMASA.

“It would have been a big help if the floating dock was put to work but the whole thing is just shrouded in secrecy. I do not think that enough due diligence was done before that dock was procured. It is not just enough to acquire a floating dock; that is just a fraction of the requirement. Operating a dock and getting it to function is even more critical than owning one, and I think that is where NIMASA is right now.

“As it stands now, nobody is talking about ´where do we take this dock to, where do we operate it from, who is going to operate it and which market are they targeting. Will the ship owners be safe to operate their vessels from where the floating dock will be located considering the security situation in the country at the moment? Who is going to be the main workforce? Is NIMASA into partnership with any experienced local or international entity that will operate and run the dock?” Ogbeifun queried.

Lamenting the huge investment NIMASA had committed in acquiring the floating dock, Ogbeifun expressed fear that the facility may turn out to be “another white elephant project” if not immediately put to use, as ship owners will continue to patronize ship repair and dry dock facilities outside the country.

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According to a report by SHIPS & PORTS, an anonymous source in NIMASA had confirmed that the agency was at a loss as to what to do with the floating dock after spending N50 billion in acquiring it and more than N1 billion in daily maintenance cost since June 2018. The source regretted that acquiring the floating dock and not putting it to use was a disservice to an industry that was struggling under heavy financial burden.

He said, “It is sad that we are still where we are at this time. NIMASA has invested a lot in that facility. The management did not think through what they wanted to do with it and it is incurring money and it is going to be deteriorating at the facility where it is kept.

“The government should not be in the business of owning a floating dock. With the way things are going, it might even rust and go down eventually if not put into use immediately.”

The management of NIMASA in its trepidation has hinted on the possibility of handing the dry dock over to its builders to manage, or entering into joint venture with them. “We are planning to ensure that the permanent location of this facility would benefit our students for training and we have also engaged the builders to manage the facility for a one-year period at a naval facility while further arrangements are being worked out,” the agency’s DG had said. This sounds like another Continental shipyard in the making!

The source at the Agency who was pissed off by the untidy affair, described the cost implication in securing the dock as a colossal waste of the country’s resources. He said the acquisition shows lack of planning and gross incompetence by the management of NIMASA.

“The building and delivery of the dock did not catch them unawares. If a private company is to deploy such facility, they would have planned and deployed it to be put into immediate use. The floating dock is at a private jetty in marina and it is costing NIMASA approximately $10,000 per day. This shows lack of planning of the present management.

“Even if we say the last administration paid for it, and the present management knew about it, couldn’t they have planned for it to know when it will be delivered than spending tax payers money, and they have not told us up till now what they want to do with it.”

As the cards are currently stacked, where the dry dock is eventually deployed, who manages it and what role government will play in the business venture will determine the viability of the facility as well as its survival.