Industry News Transportation

Operator Gives Insight into Failed NPA’s Directive Cancelling SAA Operation

The immediate past President of the Nigeria Ship-owners Association (NISA) and Managing Director/CEO of Sea Transport Services, Mallam Aminu Umar has revealed that the reason ships still drop anchor at the Secure Anchorage Area (SAA) despite an order by the Nigerian Ports Authority (NPA) that it stop operation is because many of the vessels that visit Nigerian ports have contractual obligations to insurance companies which restricts them (ships) to the Ocean Marine Solution Limited (OMSL) controlled anchorage on arrival.

Speaking exclusively with the Tribune Online in his office in Lagos, Mallam Aminu Umar stated that, “Yes, vessels still berth at the SAA. The SAA is located between 10 to 15 miles away from the Lagos anchorage. OMSL ensured that the SAA is secured with patrol boats and other vessels, but SAA is not the only place where we have patrol boats. We also have patrol boats patrolling the Lagos anchorage area.

“The difference between them is that while SAA is like a private car park, the Lagos anchorage is like a public space. While vessels pay to stay in the SAA, the Lagos anchorage is free.”

On why vessels still prefer to stay in the SAA where they pay instead of staying in the Lagos anchorage area where they won’t pay to stay, the Sea Transport Services boss explained that many vessels that call at Nigerian ports are under contractual obligation by their insurance companies not to go beyond the port of Lome, which is considered safe enough by these insurance companies, and if they must go beyond Lome, they must stay inside the SAA while in Nigeria waters.

“For a vessel to bring cargoes to Nigeria, the vessel would have been warned by her insurance firm that Nigerian waters is a dangerous place to visit. If the vessel insists that she must come to Nigeria to deliver cargoes, and her insurance cover is valid, then the insurance firm will give the vessel a condition that she must stay inside the SAA while in Nigerian waters. The insurance firm will give the vessel a condition that if she fails to stay inside the SAA and gets attacked, no compensation will be paid to the vessel.

“Many of the ships are under a contractual obligation with their insurance firms, and that is why the government cannot scrap the SAA overnight. If the SAA is scrapped overnight, most of the ships will stop at Lome and refuse to come into Nigeria waters because their contractual obligation with their insurance firm says, if they must come to Nigerian waters, then they must stay inside the SAA.

“OMSL had done its homework as regards the SAA by informing the various foreign countries and institutions like Lloyds Registers and others that there is a secured place in Nigerian waters where vessels can drop anchor and be safe from attacks. Many insurance companies have vetted this OMSL claim and thus take these into consideration when they enter into contract talks with vessels.

“That is why today, 90 per cent of vessels that stay in Lome are destined to come to Nigeria. For these vessels, their destination is Nigeria, but their insurance does not allow them. The moment any of these vessels cross Lome and head towards Nigeria, her insurance premium triples.

“If she is paying $100,000 Dollars as insurance premium, the moment the vessels cross Lome, the insurance premium triples. Aside from the insurance premium tripling, the insurance companies slam stringent conditions on the vessel which includes staying inside the SAA. If the vessel violates these conditions, then she loses her insurance benefits. So you see how SAA became prominent and why the government could not scrap it when the NPA tried to do so last year.”

Recall that the NPA, in October of 2019, had notified the Nigerian Navy of its decision to dismantle the SAA operated on behalf of the Navy by a private company, OMSL Limited.

(Tribune)

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