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Ogbeifun: Nigerian leaders only interested in political palliatives

Chairman, Starzs Investments Company Limited, Engr. Greg Ogbeifun, in the interview with Bayo Akomolafe, says the shipping sector was most hit by coronavirus pandemic in 2020, even as government’s responses have left the ship owners defenceless

 

How has coronavirus pandemic affected the shipping industry in the country last year?

 

Let me say it quite clearly that the fate of ship owners in the country is not entirely the making of the ship owners.The pandemic, coupled with crash in the oil price, has dealt a devastating blow to most nations of the world, their economies, the oil and gas industry both upstream and downstream, the service providers and the ship owners were all affected.

 

What I am saying is that the drop in oil price has negatively affected the economy, the oil and gas and the international oil companies (IOCs), the ship owners and other service providers.

 

The only thing that happened was that everybody wanted to survive the shock. So, government ran to the IOCs and appealed to them to reduce all their service operating cost by 40 per cent because they cannot survive the shock with the way it is now.

 

So the IOCs, who were used to generating $60 or $70 per barrel of oil they produced when the price of oil dropped down to zero and in some countries, the person selling the crude oil, will even beg the buyer that he should let him pay and take the shipments because his haulage is overflowing and can’t stop it.That was how bad it was. So, oil price was actually a minus if you were really following them.

 

For a country like ours, which operates a mono-economy, as oil is the mainstay of our economy. We have only been doing diversification with mouth. What is the implication of relying on oil as the mainstay of the economy?

 

Now every month, all the state government run to Abuja for allocation. Isn’t it? And where is the FAAC money being funded from? It is from oil money So, if now oil money is zero, then, there is no FAAC.

 

So, it means everybody goes back poor because they can’t pay salaries to anybody. Since the oil companies still depend to a large extent on the services of ship owners to be able to even fund themselves to stay alive, what did they do?

 

They brought the list of the ship owning companies that were providing services for them; decisively kept some of those they considered reliable or able ones that do deliver based on track records, particularly in terms of safety standards, high security and then, they weeded out those they considered not very serious or those they believe got in through influences and things like that they pushed off.

 

For the remaining few of us, they called and then said government said we should reduce cost by 40 per cent and they started negotiation. For expamle, when I commissioned OSAYAMO, the contract was awarded at $19,000 a day, at the time we got the contract to go and build that boat.

 

After they called us, that boat was now $11,750 a day and it is take it or leave it.

 

Now, the banks that funded that ship gave me the facilities based on $19,000 a day. Even though we appeared to be working, we are working and bleeding. But, it is now left for you to either take it or go and pack the ship and you get nothing. So, that’s where I see the industry today. The industry is suffering or struggling to survive.

 

Can you compare what happened in Nigeria to other countries?

 

In other countries, they gathered their ship owners and asked them, what are your challenges? Each ship owner would say, for instance, in my own case, I took so much loans to buy so, so and so ships and this is the debt and banks.

 

They would then collate all the chunks and come out with palliatives and go to their banks. But it may not be 100 per cent, but they want their people to keep working so that they can keep employing people and keep the economy alive because they believe that they will come out of this thing and if they die now, they will have no ship owners anymore and no ship will be operating.

 

So, that is what a country that knows what they are doing has been doing. Do you think I was making a profit of $8,000 a day on OSAYAMO? And I’m forced to shed so much? Now, in some cases, if you go to Lagos Island, you will find several ships that have been laid off; ships that have been funded by banks, with owners that cannot even keep paying the people to stay on board, and nobody cares.

 

The money they could have used to cushion them is sitting in the Cabotage Vessels Financing Fund (CVFF) account and somebody is talking grammar. So in days of ship owners association, this is when I carry the microphone and come out and I call a press conference and I’ll reel out statistics of what other countries are doing for their ship owners’ association as institutions.

 

Can you explain the negative impact to the nation’s economy?

 

You will wake up one day and find out that our country has no ships and then foreigners will bring in ships and it is then we will back to what we tried to stop 18 years ago, Cabotage.

 

Are you saying that they don’t know what to do?

 

If you don’t know what to do, then why don’t you read the newspapers, listen to the news, read the papers and learn what other countries are doing. But it should not only be in the area of shipping alone. It should be in every sector that is relevant to the nation’s survival.

 

A country comes out as a body, the Ministry of Finance, the Central Bank of Nigeria should sit and ask where to do palliatives?

 

But here, all the palliatives are political palliatives. You go to Kebbi and be planting rice. They have even gone to set up fishing ponds in Bayelsa on the creek. That is political palliative.

 

Lack of ship repair yards is one of the major challenges in the country. What is your opinion?

 

You have heard me mentioned on how to expand our existing ship repair facilities to meet the current realities in terms of what a country like Nigeria should be doing in the area of ship repairs, and more importantly, ship building. It is a pity that not a single ship was built in a country like ours that has close to 850 or more ships of different types, sizes and specifications operating in our coastal waters.

 

You can imagine the capital flight to build a large percentage of those ships outside this country and brought into this country. As am telling you, 80 per cent to 85per cent of these fleets have to leave this country every year to look for docking facilities for repairs.

 

We’ve all folded our hands for a long time and have accepted that this is our fate and this is what it should be. As you may be aware that Starz has been operating her current shipyard for 20 years and Starz actually is the first privately owned indigenous ship repair yard in this country, using a small dock, 500- tonnes floating dock. As at today, we have carried out dockings of over 1,000 in our ship facility. You know our clients cut across the private, public sector, foreign and indigenous owners.

 

A few years back, about six to seven years ago, most of our customers began to ask us to think of expanding the capacity of the com- pany’s yards, because we have capped a niche in t e r m s of quality and delivery,

 

The Navy patronises us, Nigerian P o r t s A u – thor- ity p a – tronises us f o r d r y docki n g , Nige-rian Maritime Administration and Safety Agency and virtually every ship owner in the country, local and foreign whose ships can fit into our floating docks have patronised us over time.

 

Six years ago, I began to think of how we can expand the facility and between the six years and now, we have tried to look at various processes.You can have a grading dock like Niger Dock and you can also have a floating dock like we have, WASS has and recently Nestol oil has one, but these systems have limitations in the sense that you generally dock one ship at a time.

 

 

So, you go to most of these yards in the good days and you find customers waiting two-three months chance to go up dock. At a time Starzs used to have the floating dock booked for six to nine months in advance.

 

So, after trying various options, we realised that the best option is the one they call a ship lift and a ship transfer system and one of the known names of that system is the Synchrony-lift – ship lift- ship transfer system.

 

So, we zeroed in on that and we began to work with different consultants, different specialists until we came to what we concluded on would be a workable venture to get our teeth into.

 

That’s the model of what we want to build in our present yard in Onne. This facility can repair between six and 10 vessels at the same time, depending on their lengths. Whereas, the present floating dock has a lifting capacity of 500 tonnes but the new facility has a capacity of lifting 7,500 tonnes.

 

 

 

Initially, we designed the ship lift facility to be able to pick up vessels up to 90 metres long; along the line in developing this idea, we decided to go on a road show because we realised that a project like this is not about Starzs.

Why did you venture into shipyard project?

 

It is about the country, Nigerian Ports Authority, which has the largest fleet of boats in the country and it is about all the ship owners who are providing vessel services to the IOCs.

 

It is about ship owners, who are operating in our coastal waters, coastal tankers and above all or more importantly, it is about NIMASA as a regulatory body responsible for maritime Infrastructural development.

 

It is also about the relevant agencies responsible for Flag State Control and Ports State Control services to ensure that ships operating in our waters and coming into our waters have the required standard of condition to make them meet our local requirements as a country in terms of the safety condition of the vessels, anti-pollusion condition of the vessels and many other factors the ports state and the flag state control require.

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