Federal govt vows not to release over N100 billion cabotage fund to ship owners

The Federal Government has vowed not to release the Cabotage Vessel Financing Fund (CVFF), which has accumulated to over N100 billion, until ship owners come with a repayment structure.

Addressing ship owners at the weekend, during their workshop and dinner in Lagos, Minister of Transportation, Mr. Chibuike Rotimi Amaechi cited the case in the aviation sector where over N300 billion was released to the airline operators and businessmen to develop the sector and they did not repay the loan. Instead, they ran away to Ghana and Sao Tome to establish banks and developed other countries with the government’s money.

He wondered why the ship owners preferred the CVFF at 12 per cent interest rate to the $200 billion Bank of Industry’s loan at 5 per cent interest rate, saying that the reason is that BOI’s loan is structured and the CVFF is not structured.

“I will not release that fund until I am removed tomorrow as Minister for Transportation. We gave over N300 billion to the owners and businessmen in the aviation industry. Some took N35 billion and some N32 billion and they disappeared. One used the money to build a bank in Ghana and Sao Tome. Nothing has happened to him. I told Greg (the president of Ship Owners Association) to take BOI’s loan at 5 per cent and he said no. I want your own at 12 per cent. Why does he want my money at 12 per cent but he does not want to take the one at 5 per cent from Bank of Industry. This is because Bank of Industry is structured. If he doesn’t pay they will grab him. But for my own, no structure. Once I pay you, you go. No structure. The law says there should be recommendation from NIMASA to minister and the minister will approve and you collect your money. That is what the law says. So, when NIMASA (Nigerian Maritime Administration and Safety Agancy) recommends to me, I approve. Then you collect the money. How do I hold you back?” he said.

Earlier, the president of Ship owners Association of Nigeria (SOAN), Mr. Greg Ogbeifun, had accused the government agencies in the oil industry of encouraging International Oil Companies (IOCs) to lift Nigerian crude.

According to him, the capitalized on the collapse of the price of oil worldwide to reduce their charter rate to between 20 and 25 per cent and the local fleet could no longer catch up with the rate.

“The tonnage of our cabotage fleet has diminished considerably due to the collapse of the price of oil worldwide in the last couple of years. The consequence on our cabotage fleet is that the IOCs who are the charterers of these vessels with directive from our own government agencies (NNPC and NAPIMS) now reduced charter rates by up to 20 – 25 per cent in some cases. The consequence of this is that most vessel owners were no longer able to meet their obligations to the financing banks leading to loss of jobs, training opportunities and failed businesses. This is, despite the fact that these vessel owners contribute 2 per cent of their contract values to the infamous CVFF, a fund meant to finance and grow the cabotage fleet but has never financed one single vessel since inception over 10 years ago” he lamented.

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