DRY DOCK FACILITIES FOR BUILDING AND REPAIR OF MERCHANT AND NAVAL SHIPS

Transcription

1 DRY DOCK FACILITIES FOR BUILDING AND REPAIR OF MERCHANT AND NAVAL SHIPS Abstract By E IJIOMA 1 DSS psc (+) ensp FRINA MNSE MIIMS The paper Dry Dock Facilities for Building and Repair of Merchant and Naval Ships identified the main dry dock facilities in Nigeria, factors militating against the ability of these facilities to actualize their shipbuilding and repair objectives and how both international and national laws have influenced their development and performance. A review of Nigerian maritime industry revealed that shipping and offshore related activities in Nigeria s Exclusive Economic Zone (EEZ) portend enormous opportunities for ship building, repair and maintenance. A fact that makes it a sine qua non for ship building and ship repair business to thrive in Nigeria. Why this has not reflected in the number and size of dry dock facilities in the country was traced to gaps identified in the NIMASA Act 2007, inadequacy of the Nigerian Content Act 2010, investors apathy for long-term investment as a result of political uncertainty, poor security environment and inconsistent government policies on maritime transportation. The recommendation is to review both the NIMASA Act 2007 and the Nigerian Content Act 2010 to ensure that Nigerians participation in shipping can be made easier through vibrant shipbuilding and repair facilities. REVIEW OF THE MARITIME INDUSTRY IN NIGERIA 1. Marine transportation is one of the various modes of transportation especially for littoral countries and it is on record as the largest carrier of freight worldwide. In fact about 90% of world trade is transported by sea 2. Nigeria is a littoral state with a coastline that stretches about 420 nautical miles, a territorial sea of 12 nautical miles and Exclusive Economic Zone (EEZ) of 200 nautical miles. Furthermore, Nigeria has a total of about 8,600km of inland waterways including Rivers Niger and Benue and 1 Views expressed in this paper are those of the author and should not be construed as reflecting the views of the Nigerian Navy or the Ministry of Defence. 2 Source: International Maritime Organization ( 1

2 smaller rivers and creeks. It is known fact that there are vast resources in Nigeria s maritime environment ranging from hydrocarbons to living and non-living resources most of which have remained untapped. Exploitation of these requires ships and other marine vessels and platforms. These thus elicit variety of investment potentials cutting across mining, manufacturing and services industries. 2. It is on record and commonly so, that more than 90% of Nigeria s import and export are by sea and over 80% of Nigeria s Gross Domestic Products (GDP) derive from the sea. In fact the Nigerian Ports Authority statistics revealed that 4,962 vessels entered all Nigerian ports and crude oil terminals in 2010 with a total tonnage of 108,621,872. This is exclusive of the numerous vessels and platforms engaged in various oil and gas exploration, fishing and other forms of maritime activities. Such a number of vessels trading in Nigeria s waters and volume of maritime activities in the country demand vibrant dry dock facilities to provide services to the vessels as they may need. With a large population, Nigeria's maritime industry especially, shipping and shipbuilding ought to have been one of the largest in Africa. 3. Rear Admiral (USN) Alfred Thayer Mahan ( ) believed that national greatness is inextricably associated with the sea, with its commercial usage in peace and its control in war. Military strategists and historians may see the theory of sea control from naval perspective with the view to ensuring free commerce for the benefit of nations' uplands while depriving others of same in time of war. Many Nigerian leaders and strategists are no doubt scholars of Seapower and they may have been drawing inspirations from the works of Seapower strategists and historians like Alfred Mahan and Sir John Laughton. The extent to which the principles of Seapower have influenced them in the process of formulating policies and making maritime related laws for our great nation is yet to be seen. No doubt, the Nigerian Navy is charged with the responsibility to safeguard Nigeria s maritime environment and ensure safe and free sea lane of communication (transportation). These roles assigned to the Nigerian Navy call for a sizeable naval fleet. The Nigerian Navy fleet also 2

3 add to the number of ships operating in Nigerian s water that require dry dock facilities to maintain and repair them as needed. 4. I would like us to look at the theory of Seapower from another perspective by considering the impact a viable shipbuilding industry would have in achieving Seapower. Seapower in this context therefore meaning to dominate maritime shipping in West African sub-region to the extent that Nigeria and Nigerians could not only control but also could influence international trade by the size of its fleet of merchant ships. Could this be possible if the nation does not have good shipbuilding infrastructure and shipbuilding policy? What is the state of health of shipbuilding and ship repair industry in the country one may therefore ask? Could a nation determine how much its citizens could participate in its maritime shipping if it lacks ability to build and dock ships for repair or maintenance? The decision to discuss at this Conference, the subject Dry Dock Facilities for Building and Repair of Ships is not only apt but a sign that professionals that are key to industrialization in this great country are reviewing their strategy. 5. Having a vast maritime environment that is very rich in resources calls for a large fleet of merchant ships, marine vessels and platforms and associated equipment. The Cabotage Act 2003 aims to reserve commercial transportation of goods and services within Nigerian coastal and inland waters to vessels flying Nigerian flag and owned by persons of Nigerian citizenship. International industrial standards for the maritime industry expect certain level of performance and maintenance of these ships, vessels, platforms and equipment. The ships must undertake mandatory docking for inspections and maintenance at specific intervals if they must remain in class. Being in class is a necessity if they must participate in trading at the level and magnitude desired by many Nigerian ship owners. These therefore necessitate a robust shipbuilding and repair industry that would make ships and marine platform acquisition, repair and maintenance affordable. May be this is a panacea to ensuring that the Cabotage Act works for the benefit of people of Nigeria? 3

4 6. Nigeria Maritime Administration and Safety Agency (NIMASA) Act 2007 established NIMASA and gave it the mandate to 3 : a. Pursue the development of shipping and regulate matters relating to merchant shipping and seafarers. b. Administer the registration and licensing of ships. c. Regulate and administer the certification of seafarers. d. Establish maritime training and safety standards. e. Regulate the safety of shipping as regards the construction of ships and navigation. f. Provide search and rescue service. g. Provide directions and ensure compliance with vessel security measures. h. Carry out air and coastal surveillance. i. Control and prevent marine pollution. j. Provide direction on qualification, certification, employment and welfare of maritime labour. k. Develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure l. Enforce and administer the provisions of the Cabotage Act m. Perform port and flag state duties. n. Receive and remove wrecks. o. Provide National Maritime Search and Rescue Service. p. Provide Maritime Security and q. Establish the procedure for the implementation of conventions of the International Maritime Organisation and the International Maritime Labour Organisation and other international conventions to which the Federal Republic of Nigeria is a party on Maritime Safety and Security, Maritime Labour, Commercial Shipping and for the implementation codes, resolutions and circulars arising there from. It is evident from these that NIMASA cannot achieve the technical aspects of their mandate if Nigeria does not have world class dry dock facilities 3 Nigerian Maritime Administration and Safety Agency Act

5 yet, no mention of dockyard development was made as a precursor to developing local capacity in ship construction. 7. Nigerian ship owners must have easy access to good ship repair yards that would enable them to maintain their ships in good conditions. The industry expectations are to have ships/vessels that are seaworthy and cheap to operate. These are conditions that must be met if Nigerian ship owners are to be competitive and remain in business. The questions now are, how much are we involved in shipbuilding and repair, what is the state of dry dock facilities in Nigeria and, how viable is shipbuilding and repair industry in Nigeria? What must we do to develop and sustain a shipbuilding industry that would aid indigenous ship owners and shippers achieve their business objectives. 8. The purpose of this paper Dry Dock Facilities for Building and Repair of Merchant and Naval Ships is to provoke debates on how best to bring about a vibrant and viable shipbuilding and ship repair industry in Nigeria that would ensure ship ownership and operation by Nigerians would be affordable and competitive. This paper will present the state of ship-repair and shipbuilding facilities in the country; make a brief gap analysis in the laws of Nigeria that ought to serve as catalysts for the development of maritime transportation in Nigeria. Finally, it will identify some challenges confronting shipbuilding and repair in Nigeria and recommend way forward. STATE OF DRY DOCK FACILITIES IN NIGERIA 9. The state of dry dock facilities in Nigeria could be deduced from the state of some notable shipyards/dockyards in the country. a. Nigerian Naval Dockyard, Victoria Island. The Nigerian Naval Dockyard has a 10,000T main dock and 500T twin docks. The docks are all operating albeit with challenges associated with aging equipment. Facilities are gradually being refurbished and upgraded in some cases but the pace of rehabilitation is slow because of paucity of funds. The Dockyard provides dry dock serves for the 5

6 Nigerian Navy and to merchant ships as well. This dockyard belongs to the Nigerian Navy. b. Nigerian Naval Shipyard, Port Harcourt. The Nigerian Naval Shipyard Port Harcourt has a 200T slipway and a 50T slipway. While the 200T slipway is not functional, the 50T slipway is fully functional having been completely rehabilitated recently. The major challenge here is the state of siltation which limits approaches to the facilities. This shipyard also belongs to the Nigerian Navy. c. Nigerdock Nigeria Plc, Snake Island, Lagos. The Nigerdock has a 25,000T Dry-dock and a 5,000T Floating Dock 4. The company is busy but the extent that it attends to docking of ships for repair or routine maintenance can best be imagined as the yard s main focus now tends more towards providing services to oil and gas equipment than to ships. This is evidently expressed on the company website. In effect, they hardly have space for docking of ships. This dockyard used to belong to Ministry of Transport, now it is privatized. d. West Atlantic Shipyard, Nigeria, Onne Oil and Gas Free Zone. West Atlantic Shipyard has a 7000T floating dock and covered workshops for new ship construction 5. The shipyard is fully operational. It has the capacity to build new ships and dock ships for repairs and routine maintenance. It is operating at the Onne Oil and Gas Free Zone. e. Starzs Marine and Engineering Limited, Onne Oil and Gas Free Zone. Starzs Marine and Engineering Limited has a 500T floating dock and it is fully operational 6. This yard is the only fully indigenous shipyard operating at Onne Oil and Gas free Zone. f. Continental Shipyard Limited, Apapa, Lagos. Continental Shipyard Limited has a 6,000T floating dock and a 350T slipway. This is a subsidiary of the Nigerian Ports Authority. The shipyard if functional. 4 Jagal Shipyard Services ( 5 West Atlantic Shipyard ( 6 Starzs Marine & Engineering Limited ( 6

7 10. There are other shipyards that are doing well but they specialize in building small boats in composite materials. Such yards as Modant Marine Limited at Rumuolumini and Almarine at Borikiri specialize in the use of glass reinforced fibre in boat construction. I want to state here that my objective is not to enumerate all the shipyards or dry dock facilities in the country but to stress that they are few and in fact they are less than 20 including those that operate in open spaces where they pull vessels out of water by unconventional means. It is also to emphasize that even the best facility amongst those listed lacks what it takes to build the kind of ships that could effectively engage in the Cabotage trade. All of the facilities have limitations and we must tell ourselves the truth. Accordingly, from the foregoing it could be said that dry dock facilities in Nigeria are inadequate both in number, capacity and capability. This is pitiable if compared with a small nation such as Taiwan that has about 140 shipbuilding yards and these include 2 large Chinese shipyards A few of dry dock facilities listed earlier that have managed to maintain acceptable level of performance have done so because they played down on ship repair and focused on construction and maintenance of platforms for the oil and gas industry. Thanks to the Nigerian Oils and Gas Industry Content Development Act 2010 (Local Content Act) and the earlier local content policy of Nigerian National Petroleum Company (NNPC). The Local Content Act, and the policy before it, emphasized Oil and Gas industry and hence the shipyards took advantage of the situation and began to shift attention to servicing equipment deployed in the oil and gas industry. Shipbuilding, ship repair and maintenance therefore suffer as a result. It would have been nice if the shipyards had expanded by developing capacity to serve the oil and gas industry without sacrificing the growth of their shipbuilding capability. The truth is, without a good shipbuilding and ship repair infrastructure in the country, there is very little that could be achieved in enforcing the provisions in the Cabotage Act and the Local content Act on shipping. There must therefore be an effort at developing the shipbuilding industry in order to drive the process for achieving the objectives of the Cabotage Act. Could Nigeria's lack of 7 Industrial Technology Information Services, United Ship Design & Development Centre (USDDC): 2001 Taiwan Industrial Outlook Shipbuilding Industry. 7

8 adequate shipbuilding and ship repair facilities explain the lack of local capacity to handle the shipping for export of the nation's oil and gas, solid minerals, agricultural produce, manufactured industrial and consumer goods, provision of maritime related services for shipping and mining (i.e. tug services, anchor handling and cable/pipe laying vessels, logistics support vessels) etc? CHALLENGES CONFRONTING DRY DOCK FACILITIES IN NIGERIA 12. The challenges confronting dry dock facilities in Nigeria are numerous. They include amongst others: a. Lack of human resource and technical capacity is made more acute by lack of human capacity development canters for shipbuilding industry. Skilled artisans, mechanics and professional engineers are very few and for now, training for naval architects and marine engineers specialized in shipbuilding is only available abroad. b. Lack of access to technical services for the development of owner s requirement, review of contract specifications, drawing review, equipment inspections, on-site supervision, etc. The National Engineering and Technical Company Limited (NETCO), a subsidiary of the Nigerian National Petroleum Company, provided these kinds of services for the Oil and Gas Industry at the start of the campaign to build local capacity for the oil and gas industry. A similar organization is necessary for the shipbuilding industry to make up for expertise that are lacking and make them available for the shipbuilding industry to access. c. Poor infrastructure such as electric power supply, road and rail network including fresh water supply makes production cost to be high. d. Difficulty in accessing funding for shipyard development is a major challenge more so, that there is investors apathy for long-term investment as a result of political uncertainty, poor security environment and the craze for quick returns on investment. This calls for concerted efforts between NIMASA and NNPC in 8

9 facilitating access to funding for shipyard development pursuant of the Cabotage Act and Local Content Act respectively. Shipyard development and shipbuilding are closely associated with the oil and gas industry because large proportion of activities in the oil and gas industry are maritime related. If capacity building is one of the objectives of the local content Act, it is expected that Nigeria will not only be able to repair but also design and build vessels and platforms required for offshore activities in oil and gas industry. The Cabotage Vessel Financing Fund (CVFF) should not be for vessel acquisition alone but should be available for dockyard development as well. e. Critical to the establishment of a viable shipyard is availability of land adjacent to water that provides access to the sea and this water should have sufficient depth that could accommodate the size of ships envisaged would visit the shipyard. The Nigerian Ports Authority (NPA) amongst its functions administers land and water within ports limits, including planning and development of port operational infrastructure. Sadly, it would appear as if NPA leans more favourably to giving access to these parcels of land for tank farm development than for the development of shipbuilding facilities. While it is possible to site tank farms beyond seaport vicinity, it is not possible to do so for shipbuilding facilities. It is therefore worrisome that more tank farms are being built around places adjacent to large bodies of water when no sizable shipbuilding facility is being developed. There is a contradiction of purpose here? f. Most Nigerian ships are old and therefore tend to spend more time in dock. The result is that other ship owners whose ships may have been programmed for docking would become disappointed. The consequence of such is far reaching in the sense that the ship may have been taken off trade for docking. If the reason for wanting to dock the ship is for class maintenance and it is taking a long time to carry out such class maintenance docking, the ship might have to stay longer out of trade. No ship owner wants to experience such and this, to a large extent, explains why local shipyards are hardly patronized by ships entering or operating in Nigeria s waters. 9

10 WAY FORWARD 13. There must be convergence of efforts by all stakeholders. Ship owners must: a. Endeavour to acquire serviceable ships. b. Strive to make ships available for mandatory periodic docking. c. Try as much as it is possible to be specific on scope of work so that dry dock operators could plan well and avoid failing other ship owners waiting for dock space. d. Provide those spare parts that are peculiar to their ship especially if such are likely to be replaced while in the dry dock Dockyards must be able to provide: a. Good survey services and assist ship owners to draw up scope of work for dry docking. b. Good and functional dry dock facilities to make docking swift and efficient. c. Inspection services during docking should be available on demand and should not be delayed. d. Train and retrain their technical staff to update their skills and expertise. e. Aim at proper scheduling ships of ships for docking. This can only be achieved if thorough survey of ship is carried out before docking her. f. Develop good and steady sources of supply of materials that would often be required by ships in dry dock. 15. There must be deliberate effort by both the government and the private sector in resolving issues that have been militating against dockyard development in the country including amending the Cabotage, NIMASA and Local Content Acts where necessary to emphasize development of dry dock facilities and enforcement of the provisions of the Acts policies that would emerge there form. 10

11 CONCLUSION 14. I will conclude by saying that given the large number of ships providing services, trading or performing other activities in Nigeria s waters, dry dock facilities in the country is grossly inadequate. The available dry dock facilities are confronted with myriads of challenges including poor state of equipment and facilities, lack of skilled artisans and professional engineers. Accessibility to land for dockyard development and funding were identified as major challenge in dockyard development. 15. Finally, deliberate efforts must be made to develop dockyards and shipbuilding capability if the country is to derive the benefits for the Cabotage, NIMASA and Local Content Acts. November 2011 E IJIOMA Rear Admiral 11