Operators want Insurance option
Nigeria’s efforts to explore multimodal approach for cargo evacuation from seaports by optimizing barge operations is being crippled by the Nigerian Ports Authority’s (NPA) new regulation which includes a N50million bank guarantee that has become a huge fiscal burden.
Barge Operators Association of Nigeria (BOAN) made this claim even as it blamed the federal government fiscal policies for the low investment in barge operations by the private sector, with NPA identified as the major culprit.
The President of BOAN, Hon. Olubunmi Olumekun made the accusation while speaking at an online summit organized by Nigerian Chamber of Shipping (NCS) on Wednesday themed: “Barge Operations System: A Sustainable Alternative To Land Transportation of Cargoes”
According to Olumekun, NPA’s new requirements for registering barge operations especially the N50,000,000 deposit by barge operators place the operators in an economic doldrum.
He lamented that over 80 barge operators have been mandated to have a minimum of N50million in order to secure their licenses whereas in other countries insurance bonds are utilized.
“Why should NPA make operators lockdown over N50million in a bank when this money can do a whole lot in the businesses of barge operators. Over 80 of us have monies lying in the banks. How do you raise N50million and also fund other aspects of barging when our counterparts abroad use insurance bonds,” Olubunmi queried.
Worried by this issue and other complexities surrounding barge operations at ports, the President of NCS, Mr. Andy Isichei proposed quarterly onsite meetings with key regulators, barge operators and other stakeholders.
Isichei observed that there are also overlapping functions among the maritime agencies and expressed optimism that frequent onsite meetings would provide the ideal ambience and platform to address the conflicts.
Efforts by our correspondent to get a response from NPA were futile until presstime as the General Manager, Corporate and Strategic Communications, NPA, Mr. Nasiru Ibrahim couldn’t oblige calls or reply text messages.
Speaking with News Diet, an Insurance expert, Mr. Adu Gbolahan stated that it is better for barge operators to do insurance bonds because the bank guarantees are also subject to insurance.
Gbolahan posited that barge operators will also have a cheaper alternative with the option of Insurance and they will be able to channel the reserved funds into their businesses.
“The current bank guarantees demanded by NPA translates to double payments by the operators because they also have to do insurance. If NPA gives barge operators an alternative, most of them will opt for insurance because the charges wouldn’t be as high as the banks and they wouldn’t have to get performance bonds from insurance companies,” he said.
At the summit, the Managing Director of National Inland Waterways Authority (NIWA), Chief George Moghalu noted that the deplorable state of Nigerian roads, coupled with the deadly accidents experienced daily, made barging an alternative for large cargoes.
The NIWA boss, who was represented by the General Manager, Marine, Engr. Joseph Ororo admitted that barge operations isn’t well regulated presently and stressed that relevant government agencies ought to synergize to ensure that minimum standard operating procedures are put in place.
However, he revealed that the Authority inspected and registered 332 barges and 264 tugs of different categories nationwide in 2021, adding that the figures aren’t encouraging when considering the vast job opportunities in the sector.
NIWA Managing Director solicited for partnership with private sector players, like BOAN, opining that with such partnership the sector could achieve more in terms of vessel traffic and fleet on the nation’s inland waterways.