Experts propose PPP ownership pattern for floating of Nigerian shipping line 

Industry experts, who took turns to review the Federal Government’s renewed intention to re-establish the national shipping line, have proposed the need to allow the new venture to be public-private partnership (PPP) driven so as to help eliminate the errors that resulted to the demise of the foremost Nigeria National Shipping Line (NNSL) in the 90s.

By so doing, entities like the Nigerian National Petroleum Corporation (NNPC), the targeted cargo owner, indigenous ship owners and some international oil companies would be allowed to own equity stakes, according to their individual capacity in the new business.

“To effectively run the new shipping line, it should be a PPP arrangement, where government can only create an enabling environment for foreign investors to partner Nigerians in the business, while the Nigerian Maritime Administration and Safety Agency (NIMASA) would be required to finance the project through the Cabotage Vessel Financing Fund (CVFF),” said Adewale Ishola, a master mariner in a telephone interview with BusinessDay.

According to Ishola, the renewed interest of government in re-floating a national shipping line is a step in the right direction, and it needs not to be left in the hands of government to use political appointees to mess up the project.

“I think the arrangement like that of the Nigerian Liquefied Natural Gas (NLNG), where Nigeria holds 49 percent stake through NNPC and the three foreign partners hold 51 percent, is a good one. But I think the equity shares in the new national shipping line should follow a different dimension where Nigeria holds a larger share than the foreign partners,” he said.

The new shipping line, he said, needs foreign partners with the technical know-how for managing vessels, who can also provide some of the vessels needed. “But if the project is left in the hands of government, it would be ran down like the defunct NNSL, where government made use and refused to pay for the services rendered, thereby depriving the ship of adequate freight with which to maintain the business,” he said.

Continuing, he said: “The management of the shipping line should be out of government hands so that when the government wants to use the vessel, they have to charter it and in terms foreign assistance like the ECOMOG operation that took place during the time of NNSL, must be paid for.”

Bolaji Akinola, a Lagos-based maritime expert, who applauds the renewed attempt to float a new shipping line, also advised the Federal Government to distant itself from the business, because “government has no business being in business.”

Akinola, who doubles as the CEO of Ships & Ports, suggested that ownership model for the shipping line (national carrier) should purely be a private sector driven venture, and recommended the NLNG model as an ideal ownership structure because it had the capacity to ensure the buy-in of critical industry stakeholders.

“I suggest that NNPC, the likely cargo owner targeted by the new national carrier, should own 25 percent stake, indigenous ship owners should own 49 percent stake through their recognised groups, while three oil majors – own the remaining 26 percent share while the Federal Ministry of Transport or any of its agencies does not need own shares in the new venture but to promote shipping development,” Akinola said.

Thompson William, director of inspections and survey, Ghana Maritime Authority (GMA), said in Lagos recently that over 5 million Nigerian seafarers would likely benefit from the employment opportunity that would be created, if the Federal Government succeed in re-floating the NNSL.

William, who advised that professionals should be engaged to supervise the resuscitation of the national shipping line, also suggested that the government needed to invest in building more manpower, especially through the training of ship inspectors to protect the nation’s waterways.