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Business News of Friday, 9 April 2021

Source: The Nation

Three years after, N50b floating dock still in limbo

The floating dock on Lagos water The floating dock on Lagos water

When will the Nigerian Maritime Administration and Safety Agency’s (NIMASA) multi-billion naira floating dock be deployed. Soon, says its Director-General, Dr. Bashir Jamoh.

But how soon? ask stakeholders in the industry.

The floating dock topped discussions when Jamoh visited the Managing Director of the Nigeria Ports Authority (NPA), Ms. Hadiza Bala-Usman, in her office recently.

Jamoh recounted the process of securing the NPA Continental Shipyard for the floating dock, and getting approval from the Federal Ministry of Transportation as well as the Infrastructure Concession Regulatory Commission (ICRC). He emphasised that obtaining these approvals were important preliminary conditions “because of the need to engage managing partners and ICRC is in charge of the mode of operations and Public-Private Partnership (PPP) arrangement”.

He also explained that the agency had signed a Memorandum of Understanding (MoU) with international oil companies (IOCs) doing business with the Nigerian National Petroleum Corporation (NNPC), to take their ships to NIMASA’s dockyard for dry-docking when the dockyard begins operations.

Jamoh stated: “I am here to affirm that the modular floating dock has come to stay. We have concluded arrangements for its deployment and operation. The date for its inauguration would be announced soon.”

The N50 billion equipment was purchased by NIMASA in 2018, and it has remained in limbo since then.

Stakeholders said the deployment of the floating dock would save the country billions yearly in capital flights due to lack of dry-docking facilities in-country.

A maritime lawyer, Dr. Dipo Alaka, said there was a significant market opportunity for the floating dock. “Nigeria loses over $500 million yearly to foreign shipyards due to vessels using docking facilities in countries such as Cote d’Ivoire, Senegal, Cameroun, Ghana, Namibia and South Africa.

“There would be significant economic impacts and benefits in the country and across the region when the floating dry dock is deployed by NIMASA. They are cheaper to maintain compared to graving docks and can get higher resalable returns. They can be installed near or away from the shore inside the harbour, making them a portable and space-saving structure without taking space of the shore facility,” Jamoh said.

Dry docking

Dry docking is an essential process for shipping firms. Regardless the type of ship, each should be operated through a set of regulations or it will be banned.

The regulations are set by the International Maritime Organisation (IMO) and the United States’ Coast Guard for safety..

The role of NPA

In an interview with reporters, Ms. Bala-Usman stressed the need to promote NIMASA’s dry dock to the maximum capacity by agreeing to place the NPA’s Continental Shipyard at the agency’s disposal.

“We believe the floating dock is an integral part of the maritime sector and we like to commend NIMASA for starting this and NPA will continue to provide the necessary support as it relates to the aspect of our shareholding within the SPV being guided by the Infrastructure Concession Regulatory Commission (ICRC),” Bala-Usman stated.

She added: “As it is, NPA has confirmed and reiterated that it will support and hand over those facilities within the next few weeks to enable NIMASA to conclude the movement of the modular floating dock from the Naval Dockyard to the Continental dockyard. This is a very welcome development for the sector and we look forward to patronising and using the dockyard facility for our vessels and other vessels of government agencies.”

Jamoh said: “You have heard from the MD of NPA. Within the next few weeks, the continental shipyard would be ready to house the floating dock. The second aspect is the issue of operation; we have obtained the approval of the ICRC and we have been directed to move to the Federal Executive Council.

“As far as we are concerned, the confirmation of certain aspects of the operations will be run concurrently. While we are seeking the Federal Executive Council’s approval, the issue of a managing partner will be considered and Expression of Interest will be published. So, we are good to go.”

Benefits of deployment

When fully operational, the floating dock will provide a lot of benefits to the industry. They include conserving foreign exchange, providing employment, boosting indigenous capacity, developing shipping, and providing training exposure for students of the Maritime Academy of Nigeria, Oron, and the Maritime University, Okerenkoko.

Deplorable dry docking capacity

Stakeholders have, for years, lamented the deplorable dry docking capacity. They lament that shipyard facilities are inadequate and are constrained by inadequate infrastructure and obsolete facilities; hence, they do not have the capacity to take bigger vessels for repairs.

Vessels visiting the port

The result is that over 1,200 vessels that operate within the nation’s territorial waters are forced to go outside the country for dry docking. The stakeholders said they were also not happy as over 6,000 vessels that call at the ports yearly are leaving for other African countries for dry docking.

Aside the revenue loss to the country, the non-availability of dry docking facilities translates to huge job losses, as an average small shipyard has the capacity to employ over 100 skilled and unskilled staff.

“A lot of jobs are lost, when vessels leave the country to look for dry-docking facilities in other countries that are even smaller to Nigeria. More jobs would have been created in the country, if we have operational ship repair yards in the country. Dry docking of vessels outside the country hinders its opportunities for skill and technology transfer. The continuation of this practice means that Nigeria will never improve its capacity to repair vessels, which in turn, diminishes the possibility of shipbuilding in the country,” lamented an analyst, Mr. Felix Ajato.

A former General Manager, Public Affairs, NPA, Chief Michael Kayode Ajayi, said the implication of dry-docking vessels abroad was grave, adding that it encouraged capital flight. He urged FEC to give NIMASA the nod to deploy the floating dock and provide an enabling environment for the emergence of high capacity shipyards in view of the huge market for such services.

Also, a ship broker, Mr. Kolapo Johnson, said despite Nigeria’s maritime position in Africa, the number of shipyards was small, and the few we have could not compare with what is in Senegal, South Africa and Cote d’lvoire.

Preparing a ship for dry docking

A marine engineer, Mr. Frances Friday, said: “Preparing a ship for a dry dock is not an easy task. A lot of planning is required to ensure smooth repairing work along with optimum ship repair cost.

“Every ship undergoes major repairing work during dry-dock period. Though there are several intermediate docking surveys and repairs scheduled in between, a five- yearly dry dock is the one which involves major revamping of the ship.

“Needless to say, dry dock is an expensive process which requires systematic and efficient planning and cost estimation to minimise overhead costs along with other unnecessary spending,” he said.

According to him, cost estimation plays an important role in keeping a check on a ship’s dry docking budget and to ensure a sensible quotation for the repair work. There are three important aspects of ship repair cost estimation.

He pointed out that cost grouping is mainly done on the basis of ship’s departments. For example,  deck, engine, electrical, engine room, accommodation area, navigation equipment, anchor and deck machinery, cargo, hull, rudder and tail shaft, cargo tanks, fuel tanks, ballast tanks, and slop tanks.

Areas where revenue are generated include: dry docking fees and repairs yard costs; agency costs, classification, surveyors’ costs, cost of the stores; repair and maintenance costs, damage repair costs and costs of spares, among others.

Purpose of dry docking

The main purpose of a dry dock is to expose the underwater parts for inspection, repairs and maintenance. The ship to be repaired is hence manoeuvred into the lock and the gates are sealed post which the sea water accumulated in the vessel is drained for better inspection and repairs.

According to SOLAS, active ships that fall under the 100A5 category have to be subjected to a bottom survey twice every five years. Also, a merchant vessel, which is older than 15 years, needs to be checked for breaches or any defaults twice in every five years. In case of passenger ships, the repair period is every two years.

“Each ship working in service has to comply with a regular maintenance called dry docking, a regular, periodic overhauling process founded primarily because of the very special nature of ships’ environment which is under water operations. Dry-docking can cost hundreds of thousands U.S. dollars (sometimes millions) to maintain the ship in the standardised working condition.

“Dry-docking is a term used for repairs when a ship is taken to the service shipyard in the (dry dock). The ship is removed from the water to enable maintenance and inspection work to be performed on the exterior part of the ship that stays below the waterline. Usually, dry-docking is done at periodic intervals (generally three or five years), and there are regulations as mentioned above that mandate inspections of the ship’s bottom to be carried out at regular intervals to ensure safety of the vessels.

“Types of repairs vary widely according to many circumstances such as the operating environment and water reaction with the hull of a ship because of salt water reactions with steel, the hull thickness, the humidity and temperature effects on various parts of the ship, from the hull to the main engine, passing by the accommodation of the crew,” Friday said.

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