FG approves disbursement of N150bn Vessel Acquisition Fund …As NIMASA forecloses extension of Dec. deadline for Single-hull vessels
The Federal Government has approved the disbursement of the Cabotage Vessel Financing Fund CVFF estimated at over N150billion nearly 17 years after it was created to enable indigenous ship owners acquire vessels and build local capacity.
Created under the Coastal and Inland Shipping Cabotage Act 2003, the fund is derived from two per cent of every contract awarded under the Cabotage regime, and was designed to be a revolving loan managed by the Nigerian Maritime Administration and Safety Agency NIMASA.
In another development, NIMASA has foreclosed any extension of the December 31, 2020 deadline given to single hull tanker vessel operators to upgrade to double hull or be thrown out of business.
Director General of the agency, Dr. Bashir Jamoh, who spoke in Lagos, disclosed that NIMASA has secured approval for the disbursement of the CVFF.
It was however gathered that the agency is currently fine tuning details of the processes that would culminate in the payment of the funds to eligible Nigerian shipping firms.
The DG, who held a virtual meeting Thursday in Lagos with members of Shipowners Association of Nigeria SOAN, warned that no single hull vessel would be allowed to operate on the nation’s waters from January 1, 2021 as prescribed by the International Maritime Organisation IMO.
“We are committed to the complete phase-out of single-hull tankers by December 31. Operators still using this type of tankers should make adequate preparation to comply because there will be no going back on this decision.
“We have discussed the timeline for discontinuing the use of single-hull tankers and were given five years to comply with the ban, which is, to all intents and purposes, a generous time frame”, he said.
While describing shipping as “the beacon and hub of any developing economy”, the DG argued that the journey to success for the current management of NIMASA depends on the shipowners. He said: “We shall continue to pursue our functions of promoting and regulating shipping in collaboration with shipowners and all relevant stakeholders.”
On some of the concerns raised by the ship owners over the proposed disbursement of the CVFF, Jamoh stated that the Minister of Transportation, Chibuike Amaechi, had approved the disbursement of the fund, meant to assist indigenous operators in the acquisition of maritime assets.
He noted that the details are being worked out with a view to avoiding mistakes that led to the flop of similar funds created in the past and ensuring effective and efficient utilisation of the fund by the indigenous shipping firms.
He added, “We have also submitted proposals to the Minister to seek fiscal and monetary incentives for our shipowners.”
In attendance at the webinar meeting include President of SOAN, Dr. Mkgeorge Onyung; First Vice President, Mr. Eno Williams; Former President and CEO of Starzs Marine and Engineering Limited; Engr. Greg Ogbeifun, CEO of C&I Leasing Plc; Emeka Ndu and CEO, Kameel Najjar, Oviebo Ambrose.
Recall that NIMASA had in 2015 revised the timetable for the phase-out of single-hull tankers operating in Nigeria. This followed the decision of the IMO to extend its deadline for phasing out of single-hull tankers for certain categories of tankers not engaged in international trade. NIMASA utilised the IMO extension window to shift the final phase-out date for single-hull oil tankers to December 31, 2020.
IMO’s Revised Regulation of Annex 1 to the International Convention for the Prevention of Pollution from Ships (MARPOL) required flag administrations to phase out Category 2 and 3 single-hull tankers by 2015. But it extended the deadline for some tankers not engaged in international trade owing to the difficulty in achieving wholesale fleet replacement.