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FG Loses $775.2m On Oil, Gas Cargoes Discharged In Undesignated Terminals

The Federal Government is losing a huge sum of 775.2 million dollars (N152.7 billion) annually on oil and gas cargoes discharged at undesignated terminals.

A maritime expert, Mr Emma Ugoji, made the disclosure in a statement made available to newsmen on Tuesday in Lagos.

Statistics released by the Nigerian Ports Authority (NPA) showed that Liquefied Natural Gas (LNG), Refined Petroleum; and Crude oil handled in Nigerian ports in 2015 totaled 160.5 million tonnes.

According to Ugoji, 4.83 dollars is being lost per tonne on oil and gas cargoes discharged at undesignated terminals.

He said that in a duly-designated terminal for handling oil and gas cargoes such as Intels Terminal at Onne, 5.83 dollars is currently being paid per tonne as against one dollar in other undesignated terminals.

“Maritime experts hold the opinion that all that the Federal Government needed to do over the years to sustain collectable revenue inflow from transportation, berthing and cargo discharge of vessels was to enforce the policies that have been in existence for many years.

“This would boost economic activities in the sector as well as ensure that regulatory agencies enforced rules and regulations without compromise.

“Assessing what has been happening in the sector in Nigeria, experts are of the view that Nigeria has a set of good policies guiding the conduct of players in the maritime sector.

“The challenge has been the impunity with which operators, especially owners of private jetties collaborate with shipping companies and importers to flout rules and regulations,’’ Ugoji said.

He recalled that since 1991, there had been at least 37 official correspondences which include letters, circulars and memos from agencies of the Federal Government such as Nigeria Customs Service (NCS), Nigerian Ports Authority, Federal Ministry of Finance, Federal Ministry of Transportation and the Office of the National Security Adviser.

“Added are newspaper publications as well as circulars signed by former Presidents Olusegun Obasanjo and Goodluck Jonathan; resolutions of the Federal House of Representatives insisting that terminal operators should stick to the laws, rules and regulations guiding their operations and stop flouting government policies because of inherent risks, ‘’ he said

Ugoji pointed out that the major offences committed by terminal operators which had been of concern to the Federal Government due to the negative financial and security implications included irregular berthing and midstream discharge of vessels outside Customs ports.

He also mentioned the habit of private jetties receiving and handling cargoes of ocean going vessels.

According to him, it is on record that the midstream discharge of cargoes was banned on May 22, 2002, via a Presidential circular.

“In the circular, President Olusegun Obasanjo said that he had been briefed on the illegal use to which private jetties were being put nationwide.

“Another circular was issued that government was losing huge revenue as a result of the unwholesome practice of some shipping companies in collaboration with unscrupulous public officials in the maritime sector.

“On Feb. 22, 2007, the then Minister of Finance, Mrs Nenadi E. Usman, also sent a circular directing the NCS boss to stop the illegal activity of midstream discharge of cargoes.

“The adamant private jetty operators who have been desperate to play in the big league by directly receiving vessels from foreign waters and discharging their cargoes, were still not deterred. The Federal Government has ever remained the loser,’’ the expert said.

According to him, the Federal Ministry of Transportation also in a circular to the Managing Director, Nigerian Ports Authority in 2007 and signed by the then Minister of State for Transport (Water), Prince John Okechukwu Emeka, said that the mid-stream discharge and handling of cargo of ocean going vessels at private jetties were being done “in flagrant disregard to Federal Government directive banning midstream and offshore discharge of cargo’’.

“These and many other circulars were issued to concessioned terminal and private jetty operators during the regime of Chief Olusegun Obasanjo but nothing changed.

“Private jetty operators which included Ladol and Nigerdock were sent specific circulars for them to comply with regulations.

“There are indications that ships are arriving from foreign anchor at the Ladol Free Trade zone and Snake Island Free Trade Zone as if these zones are free ports instead of arriving and reporting at the Customs ports.

“Vessels arriving from foreign and anchoring in these locations are violating the provision of section 12 (1) and 4 of CEMA Cap, C45 LFN 2004.

“Unlawful berthing of ships from foreign and unauthorised locations pose security threat to the nation as it could lead to trafficking in arms and ammunition and also losses in collectable government revenue,’’ he said.

Ugoji said that another circular from the Federal Ministry of Transportation in 2008 disallowed direct berthing of ocean going vessels with oil and gas related cargoes and barges at Ladol Free Zone.

He explained that the Minister listed the reasons to include “Ladol Free Zone is not a conventional port and cannot operate as one and that Ladol Free Zone is a private jetty and private jetties are banned from receiving ocean going vessels from foreign waters’’.

“On May, 14, 2010, at the official inauguration of the port facilities and foundation stone laying of Phase 4 project at Onne port complex, the President at that ime, Dr Goodluck Jonathan, told businessmen that “all cargoes imported into the country must be discharged at the NPA designated terminals’’.

“Presidential directives banning midstream discharge and private jetties from receiving ocean going vessels directly at their jetties are still in force.

“In 2011, Nigerian Ports Authority wrote to the Managing Director of Ladol requesting him to note that as a private jetty, the company’s facility was not authorised to receive ocean going vessels,’’ Ugoji said.

According to him, the Nigerian Ports Authority is determined to sustain the objectives of the Federal Government’s port reform policy that led to the concessioning of ports to private terminal operators.

“Clearly, the practice of receiving ocean going vessels at private jetties will distort the plan and impede the realisation of the port reform aspiration of making Nigeria the ports hub in the sub-region.

“In May, 2012 the Federal House of Representatives passed a resolution that there is urgent need to enforce the ban on mid-stream discharge of cargoes as well as use private jetties to discharge and load import and export cargo.

“The lawmakers also resolved that all oil and gas related cargos should be discharged only at appropriate designated terminals,’’ he said.

The expert recalled that the last effort by former President Goodluck Jonathan to enforce policies on maritime transport was in April 2015 when he gave instructions that all ships bearing oil and gas cargo should berth and discharge at designated terminals in Onne in Rivers, Calabar port in Cross River and Warri in Delta.

He explained that most of the listed companies headed for the courts where they obtained injunctions which continued to frustrate government from enforcing the concession policy which has been in existence.

Ports and Terminal Operators Ltd. (PTOL) had sued the Nigerian Ports Authority (NPA) and the Attorney-General of the Federation over the circular against discharging oil and gas cargoes in undesignated terminals.

The plaintiff obtained an order of interim injunction in March 20, 2015, restraining the defendants from diverting a vessel or any other vessel meant for plaintiffs’ terminal, pending the determination of the Motion of Interlocutory Injunction.

Nigerdock also jointly filed a suit with another company SIMCO Free Zone Company and obtained an order of interim injunction on May 8 and May 19, 2015.

The injunction restrained the National Assembly and the Clerk of the National Assembly from forwarding the Bill for an Act to amend the Oil and Gas free Zone Authority Act to the President for assent, pending the hearing and determination of the originating summons.

The plaintiffs claimed the bill sought to confer undue advantages on the operators of Onne, Warri and Calabar ports which was not accorded to others. (NAN)

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