Why Govt Should Tie NIMASA/NCDMB Shipping Funds to Vessel Building Dev. Programme – Capt Baiyee, Marine Consultant & Ship Builder
Captain Sulemain Baiyee is a mariner who has worked in the maritime industry for 48years. He currently builds ships and consults for banks that finance ship acquisition to ensure quality delivery on the contracts by foreign shipyards. He also trains foreign shipyards on building for Nigeria.
Baiyee has designed and built from start to finish MARPOL vessels as well as security vessels operating in Nigeria. He speaks with TNMN’s Founding Editor, Ezinne Azunna on issues surrounding indigenous ship building. He calls for the development and integration of a Vessel Building Development program, which ties the training of seafarers and shipbuilding artisans to the disbursement of vessel building/acquisition funds by the Nigerian Content Development and Monitoring Board (NCDMB) & the Nigerian Maritime Administration and Safety Agency (NIMASA). Hope you find this interesting.
TNMN: Sir, you have been in the maritime industry for 48 years now. Has the sector progressed like you wished?
Captain Baiyee: The maritime industry is the foundation of any nation that has a coastline. In Nigeria, it is the foundation of our economy, ninety percent of what we consume comes by sea and more than ninety percent of what we produce is actually handled within the maritime industry so, it is really the nucleus of the economy of this country.
I was initially with Shell, I stayed with Shell for about four years and then I left and I went to join a company called Globtik Ship Management in the United Kingdom and they gave me the opportunity to go into shipbuilding. I worked with them for a while and decided to leave the sea in 1982 after I became a Captain. I progressed and decided to go back to University where I got a Master’s Degree in Operational Research which is the use of scientific methods to manage companies. I was a Consultant in that field and I did this for 15 to 17 years, before I came back into the maritime industry, and took some of those techniques with me into the industry. If you talk to people around me they will tell you that the way I approach marine is very different; it is because I have learnt how to be efficient from the other side using project management techniques.
I came back to Nigeria in 2003 and did quite a few things until I started working with African Circle where I built vessels for them; I actually built four vessels for them in Turkey. I designed and built them specifically to collect waste to meet MARPOL (The International Convention for the Prevention of Pollution from Ships) requirements. After I delivered the vessels, they did not have the facility to process the waste off the vessels. The new vessels were sitting idle for about six months and I went back to African Circle and said to them that people may think that I built rubbish vessels because they are sitting down idle not doing anything. They explained to me that they had bought all the equipment required and they were in storage for about three years in fifteen containers. They were using leased land on Snake Island where they had some challenges, so I brought a solution and told them I could build the facility and that was how I built the African Circle facility on Snake Island.
After I left African Circle, I got back into marine, pure marine because somebody from one of the banks approached me for some advice and I said listen, “You give twenty million dollars to people to build or buy a ship; you never involve anybody from the maritime industry but when you want to build a house, you would have a quantity surveyor, architect, etc.” So he asked me to present a proposal and the rest is history. Over the past nine years, that is what I have been doing, working with the banks and helping clients build vessels.
In Nigeria, a lot of the people who build or buy vessels employ foreign consultants. Foreign consultants do not know our challenges so, my involvement meant that I started changing vessels to meet our requirements. And guess what, Nigeria deserves world-class vessels and we are not getting them yet, I can tell you that; It became my objective that we are going to get the best for Nigeria at least within my own capacity. It is actually strange because I train and work with foreign shipyards on how to build better vessels for Nigeria while we are not doing anything about shipbuilding here.
TNMN: The Ship Building Industry is an area that has remained fallow for quite a long time now. Why are we not building ships? What is the challenge of the industry?
Captain Baiyee: Shipbuilding is not something you do overnight. People do not realize that eighty percent of the work done in the building of a ship is done by the artisan and they have to be experienced. We have a lot of people with the skill base but the culture and discipline to build vessels is not there. And another challenge we face in this country is that somebody wants you to build a vessel overnight, no! Today if I were to start shipbuilding in Nigeria, I will only be putting together, most probably in the first year, ten percent of that vessel locally. I will have to work with a foreign shipyard where we start working modular building modules to be assembled locally, while we build the skill base that is required to have the ship fully built locally in about four or five years.
Shipbuilding is not just putting the ship together. You do the concept, the design, there is a lot of procurement, there is a lot of discipline involved. The final thing is putting it together and everybody seems to think that is just the case, no it is much broader than that.
We should have targets. If you look at Cabotage, if we talk about it, what is the Cabotage for? It is so broad. If I was to amend or implement the Cabotage law, I would trim it in.
If you take the Nigerian Maritime Administration and Safety Agency (NIMASA), they have the Ship Building fund. If you go to Nigeria Content Development and Monitoring Board (NCDMB), there is a lot of money put aside, two hundred million! So I ask you, two hundred million from NCDMB, and NIMASA I don’t know how much they have and we spend all this money abroad and nobody decides to put a caveat to say, we have to have to set targets for the five hundred million dollars to be spent on shipbuilding for the next three years. Start with vessels Nigerians can own and build. Start with vessels of maybe 200, 300 GRT. Then three years later, it goes up. You don’t just put one law that goes across all types of vessels where it is very difficult for Nigerian owners to deal. We have to learn to grow. We don’t! We want to jump from one to ten. You have to go through the development phases.
Let me give you an example. The vessels that I build, which are anything from thirty-five to forty metres in length, are for security and we can build them here but today even if I want to build a full boat here, we don’t have the infrastructure to do it. I don’t want to go and borrow money from the bank to build it. I want NCDMB to say, if there are ten vessels they are going to fund, the vessels have to be built based on a Nigerian Vessel Building Development program. From that point, the banks will be ready to finance the vessels. If I want to set up a shipyard now without the Vessel Development program, the bank will be looking at me and say no, but if I came to them and say I have got five vessels I need to build, give me the money and this is backed by the NCDMB fund; with the contract for five vessels, I can set up a shipyard to start the process. So until NCDMB, NIMASA and the other government initiatives link funding to their support for local shipbuilding, everybody will take the money abroad to build ships on his own.
TNMN: So you think we don’t have enough support from the government?
Captain Baiyee: No, the government is putting in the money but somewhere along the line, it is not being integrated into other development programs. There is no synergy of all the disciplines. Shipbuilding should be tied into that money. It is not only shipbuilding, other capacity development programs should be tied in. There are so many things. Let me give you an example. You find cadets everywhere looking for vessels for sea time, this challenge could be mitigated if NCDMB could say that any vessel you construct using their funds must have four beds for cadets so, any vessel built from NCDMB funds opens the door for training and capacity development. That is what I meant by integration. We have different needs. Let us make sure there is a synergy for all our requirements. If we don’t have that, then everybody will go away and do their own thing and you become very inefficient. With the money we have spent or maybe that we are going to spend, if we have synergy, the benefits would be enormous. At the moment, we are only touching the surface instead of reaping back the benefits of the money government has put in. Somewhere along the line, there has to be a more comprehensive way to deal with this.
TNMN: You call for integration and identified a problem with the capacity of the Nigerian artisan to build ships. We hear talks on seafarers but nobody talks about the maritime artisan. How important is it that we begin to train artisans specifically for the industry?
Captain Baiyee: It is a strange situation. Take Oron (Maritime Academy of Nigeria) as an example. They do ship management, they do port management, and all of that. They focus on end-users of the vessels. We focus so much on the end users but for you to get to the end, you must start somewhere. So, you find out that at the moment, the artisans we are talking about in shipbuilding are not the sort of people that are being trained. Do we do naval architecture in Oron? I don’t know but the people who build vessels are the artisans, the electricians, welders, etc. They are the people who need to learn the ship-building process. They have to be trained.
We have a lot of qualified welders, we have a lot of qualified electricians but they are not shipbuilding electricians or welders. There is a culture to shipbuilding. It is different from everyday artisanal practice but then you can convert them. The key thing is that there are training schools. Go to the Naval Dockyard in Lagos, it has a training school, there are training schools all over the place. Everybody is training without really focusing on the skills we really need.
TNMN: So how do you source the artisans who work on the vessels you build?
Captain Baiyee: Let’s go back to the artisans. You need to give them practical training but most of them, just like cadets, until they work on building vessels they are no good to you. You need to train them on the basics, and then they get a little bit of skill and they further learn how to do things during shipbuilding. So, if we talk about training artisans, what we do at the shipbuilding stage is something like a train-the-trainer program. They finish from the training schools and you take them from here to South Africa or wherever the shipyard is. You say let them work on the modules you are going to assemble here and they train others when they return, so it becomes a circle. That is why I said it may take you may be up to five years before you start building from start to finish. Do you know that about six or seven years ago, the amnesty program for the militants trained a lot of artisans in South Africa shipyards, I know of such shipyards but they came back here and there were no jobs tied to that programme in Nigeria.
TNMN: So, there is a disconnect between policies and the actual market?
Captain Baiyee: When I talk about synergy, lack of synergy, that is the disconnect. If you have synergy, there is a connection. So, at this particular stage, we have to put in place ship-building plans and also run an artisan development plan. Everybody says it cost money. If there is a law today which supports a shipbuilding plan, you would give me four or five ships to build, within the cost of building the vessels, I will train all those people during the building of the vessels. By the time, I finish five vessels, I will have developed a local shipyard with a capacity of putting together twenty, thirty percent of the vessels in Nigeria. It will be cheaper under capacity development. I am meeting Cabotage requirements, I am meeting the Local Content requirements whereby you are getting AAA on all your vessels. At the moment, most of the time it’s A or AA.
TNMN: What is the worth of the artisanal subsector in the maritime industry?
Captain Baiyee: Today, to build a vessel for example a thirty-five metre security vessel, it will take eight to twelve months. On the average, you have between thirty to fifty people working on that boat in different disciplines. The reality is that we already have a pool that can be easily converted after all, at Nigerdock, we were doing a lot of fabrication for the oil industry to world class standards. Those guys were trained and they have all been dumped. They have got nothing to do now. A lot of them were trained to very high level. They were coded by the classification societies because that is what you need to work in the industry. Ninety percent of them haven’t got anything to do today. It is just such a short gap that if we say today we will build five vessels in Nigeria, all of a sudden I have got that pool. I will put into use. It is fast track straight away.
It only has to take NCDMB and NIMASA to say before we give you any money for these first ten vessels, you need to work with this particular company or consultant. That way, you build the vessels to the same standard and it won’t cost more. You pay the same value for the vessels and because there are say five of them, we can plan and secure the investment. Nobody is asking for any subsidy.
TNMN: But funding is critical and one of the feedback from the industry is that even government funding is not enough. Banks seldom fund maritime assets. How do we get funding right?
Captain Baiyee: I said earlier how I got involved with the banks. I knew the banks will come knocking. You come with a contract from one of the oil companies, you bring it and drop it on their table, they tell you the vessel they want to buy. You just give them the money they go and buy it and bring it. You don’t know whether it is fit for purpose, you don’t know whether the company has the capacity to execute the contract. People forget every contract you get from the IOC is a call-up contract. If you are not working and you are not serviceable, you don’t get paid. But the banks will take it that they will get money, three hundred and thirty days they multiply it by the daily rate, the cash flow is fine.
Nigerians have a very poor maintenance culture therefore that reflects on our vessels. There are so many things that impact funding from banks. It is a bit too late because a lot of the banks have got their fingers burnt so they are reluctant to fund. But there are one or two banks who are still investing in the maritime sector. What they do now, is use the marine consultants to make sure that they get it right. They don’t only vet the contract, they vet the vessel, they vet the capacity of the organisation to execute. thereby mitigating the risk while previously nobody cared.
When banks want to fund a building of one million dollars, they will put an architect, a quantity surveyor, a civil engineer, they would hire people to make sure it is done properly but they will give twenty million dollars to you to go and buy a ship and then they will not call a single mariner to come and vet it. We are now beginning to move in the right direction. I think we need to have the vision to be able to say, in the next five years, this is what we need to do and then sit down and assess what is available, how do we tie in the industry needs, how do we ensure that with the funds we have, we can get more out of it. At the moment, we just play the wait-and-see game.
TNMN: One of the other areas of interest is ship emission and its impact on climate change. What is the level of compliance in Nigeria?
Captain Baiyee: For every vessel that I am involved in building, I make sure it meets world-class standards. I will give you an example, there are still engines being installed in vessels coming into Nigeria that are tier two emission engines, America will not allow you do that, you must have tier three engines. What is our government doing about it? Of course, everybody will say it becomes expensive. But what is the price you are paying for not actually doing it right, and to be honest with you, there are other things that go with it. A tier three engine of the same size as tier two will not give you the same power because you are restraining it to ensure you meet the emission requirements, you have to buy a bigger engine to achieve the same power. We should not compromise. We are doing compromising because everybody is saying it is costly.
Today, if you want to go from a tier two engine to a tier three engine you must pay about fifteen percent on the engine because it is more expensive. A tier three engine gives you more monitoring capacity. Therefore it can actually, in the long run, be cheaper to maintain because you can monitor parameters that will enable you prevent things going wrong, thereby saving maintenance costs.
Again, you cannot ask marine to be environmentally friendly when other industries in the country are culprits. In the marine industry today, most companies are doing better than the other industries in Nigeria because the industry uses international standards for monitoring. A lot of Nigerian vessels work with the IOCs, who tend to maintain international standards.
We have some way to go, and I will say this to you, if you do the right thing, it cost you less. You become more efficient, you become more effective. Doing the right thing is the only way for you to be successful. What a lot of our ship owners don’t realize is that the corners they cut are actually more expensive for their businesses. Invest at the beginning, do the right thing and everything will go smoothly. On all the vessels I am supporting, that is what I preach to the owners and I am sure a lot of them are beginning to see the benefits.