In the News:
Highlights of The 2nd Nigerian Dredging Summit 2008
The three day Nigerian dredging summit which held at Protea Hotel between August 4 th-6 th brought together many local contractors with foreign dredger manufacturing and equipment companies. The showing of the Lagos State Government which came with four delegates raised the level of debate on current burning issues, including dredging at Ajah in the Lekki peninsula. Financial institutions were not left behind as they made a heavier presence this year than last year. This year, in addition to First Bank, which also came last year, Afribank Nigeria Plc and Guaranty Trust Bank Plc came in impressive numbers.
This may be signposting one of the stark realities of the Nigerian dredging sector today, i.e. that the business is being widely recognized for its capital intensive nature and that those that manage those finances are now out to acquire as much relevant knowledge as is adequate to guard the investments of their clients and customers.
Nobody was disappointed. In fact, many delegates openly canvassed a regularity of the exercise and an even higher frequency and larger spread, to include other parts of the southern Nigerian terrain, like the Niger Delta, where dredging holds an important key to infrastructural development.
It was indeed a real market place of ideas for all players. While local operators and stakeholders got to see and feel their foreign associates and equipment suppliers one-on-one, the latter on their part got real life interaction from the demand sector of the international market place, complete with the complaints, queries, observations and assorted feedback. It was a forum fit for friendship and alliances but more importantly a veritable school for knowledge dissemination. One delegate who came just to see what the matter was all about confessed that he would never any other occasion of such gatherings, blaming his previous lackluster attitude to the dredging summit idea on the usual cynicism whether any good thing can come from Nazareth!
Aside from the main lectures, questions and comments after each presentation, many good lectures were given. Dr M. M. Zagi gave a rousing opener with his presentation on EIAs and the Dredging, Oil and Gas Field Operations in Nigeria. He traced the history of EIAs in Nigeria and why today it is the first and last step for any project in the oil and gas sector of Nigeria. Dr Zagi who works for the Directorate of Petroleum Resources (DPR) brought panache, boldness and authority to the discussion on EIAs and properly posited it in the overall scheme of things, including dredging for the oil companies. He was followed by Engr Ben Efekarurhobo who lectured on Opportunities for Dredging in the Niger Delta. Ben was his usual best and disclosed the ways of maintaining operations even in the heat of Niger Delta skirmishes. In his second lecture titled Precautions for Dredging Operations in Restive Communities / Effective HSE Policies, the marine engineer demonstrated the failure of most company policies which ignore adequate social corporate responsibility of dialoguing with the host community and making them your partner. Ben’s paper is a must-have for any potential investor or operator who wants to last long in the Niger Delta.
Mr Tony Enebeli followed with a discussion on Functions of the Dredge Manager and Tips for Maximising Profit from Sand Stockpile Projects. The question time that followed Mr Enebeli’s presentation was so long it had to be cut short and put off till after lunch; the paper was so popular because it touched upon the stark realities of dredging in Nigeria and large-scale mechanized sand winning in particular. Thereafter it was time for lunch. When the session resumed, Mr Stanley Nwankwo brought out the compelling need for pre-docking preparations essential if an importer of dredges or dry plants wanted to expedite clearance of his goods from the seaports. This was another brainy but simple work that simplified the seeming puzzles many people used to have about Nigerian Customs activities at the port. In fact, after answering the questions from some of the delegates, it was all so clear that the work of all the agencies at the seaports or airports ought to be cut out for each one if they could restrict themselves to their schedules.
A lot was learned: many people did not know that import duty on dredgers and dry plants in Nigeria is zero. Mr Nwankwo told them. Others did not know that there could anything like temporary importation under which an imported piece of equipment could be re-exported back to origin after use here in Nigeria. Or that the approval for such a status on an equipment could be repeated ad infinitum! His lecture was titled Faster Clearance of Dredgers and Dry Plants from the Seaports: Pre-Clearance Preparations for Dealing with Nigerian Customs Service Rules and Regulations. Thereafter, it was the slot for Pioneer Equipment to showcase their product offering to the Nigerian market. One of the developments for this company was the opening of their new Nigerian yard in the Lekki peninsula area of Lagos. Mr Sama Ekpenyong who made the presentation took questions deftly and rounded off day one of what proved to be a worthwhile venture for all attendees.
Day two began with Engr Sunday Otuya who lectured on the essential details of coupling dredgers once they arrive Nigerian shores. It was also replete with warnings. Titled Dredge Coupling: Essential Information on launching the Dredger, Otuya made a Powerpoint presentation revealing the sins of many Nigerian dredger owners when it comes to coupling their equipment. They would mostly prefer using unsuitable cranes and low capacity implements because these were cheaper: it was another rousing lecture because the man showed pictures of many a dredger hanging on the balance due to the use of insufficient tools. In another lecture he also delivered at this year’s summit, titled The Cost of Cheap Maintenance Engr Otuya made a complete story of the foolhardiness of entrusting expensive equipment to the mercies of cheap labour or miserly maintenance. Only one loser emerges from this transaction: the dredger owner or operator. Therefore the warnings rang out and it was well taken by many present.
Another rousing lecture on day two of the summit was from Mr Siegfried Heger of Nationwide Equipment who lectured on Pumps Technology as critical to Dredging. This was however Heger’s second appearance because on day 1, he made comments and stood in for Harry Burgess who couldn’t make his lecture due to his absence and clashing schedules. On that first day, Heger was introduced by Chris Durmann of Nationwide Equipment’s Dredge department. Mr Heger came from the stables of Dragflow Pumps dredge makers of Italy and he represented them quite well. This was a highly scientific lecture and he amply showed the science of pumps and why they do what they do what they do in dredgers. In fact, over two days, Mr Heger presented lectures both on this subject and the array of other Nationwide Equipment product offering to the Nigerian market. His lecture elicited a lot of questions as well. This inhered from the fact that, as is normal, dredge operators here have quite many issues they would love to resolve about the performance of their pumps. Many clarifications arose; many delegates were happy at the streams of knowledge that emerged. There was no doubt that the level of understanding of the technology and its application to dredging was now spreading and consciousness was high that the profession is far from rocket science…it’s attainable and manageable. It must be noted that Nationwide came with the largest delegation to this summit, including Ed Kostenski, Yinka Akinlabi, Yemi Abiola, and the duo of Chris and Heger. Many local delegates came also looking to meet with the company, including a delegate from neighbouring Benin Republic. (Soon after the summit ended, DDH gathered that a whole shipload of equipment sent in by Nationwide Equipment was being expected to berth at the Lagos seaport.)
One of the most incisive discussions in recent times on financing dredge sector equipment was given by Mr Steve Gharoro of Indemnity Finance Ltd on the third day of the dredging summit. Steve comes from a firm that has got quite some experience in the field of equipment finance and dredging activities. Therefore, he had the ears of all delegates. He explained why loan applications succeed or fail and proffered advice on the best way to put forward one’s best foot in the future. He explained those complicated terms that are usually familiar to finance gurus like operating leasing, finance lease, loans, joint venture, syndication – especially when the amount involved is too large for the initial financier and manufacturer/distributor’s credit.
Who said you don’t learn very much at these events? For once, some of the hindrances to many loan applications were being laid bare in a relaxed atmosphere. Steve’s presentation was more than incisive. For example, under the heading of basics for considering any loan proposal he posited the following factors:
- The type of Dredge/Equipment you want to finance/acquire.
- The character of the customer (KYC – Know Your Customer). It is very important to investigate the character of the person(s) you want to do business with before you start/continue.
- The Cost of the Dredge/Equipment and working capital.
- Credit Rating of the customer - obtainable from CBN’s electronic Financial Analysis and Surveillance System (eFASS) database.
- The purpose for acquiring the dredge - is it to execute a prospective or an already awarded project, or to be used for sourcing projects, or for leasing/renting, etc. This will, among other things, determine the proposed cash flow
- The manufacturer of the Dredge/Equipment, place of manufacture and reputation of the manufacturer – trace manufacturer’s history/maintenance capabilities.
- Presence of the manufacture in Nigeria – either directly or indirectly for sales/ maintenance/ technical support.
- Where would the dredge be used – accessibility, especially for regular inspection by financier, as well as safety of the equipment
- Repayment terms – monthly rentals, domiciled contract payments, flexible payments (as at when the client receives inflows)
- Etc, Etc.
Steve’s paper was worth its weight in gold for those who would need financing at some point. And again to think this information was wholly accessible at the summit gave kudos and credibility to the exercise. Yet more was to come.
The discussion on pumps was reiterated the following when Paul Quinn of Ellicott Dredges also touched on the subject during his presentation titled Choosing the Right Dredge for various projects. By now, Paul is well-known to many delegates as a natural speaker when it comes to these seminars and workshops. Usually equipped with a voice that resonates to the back seats without the mic, Paul launches his discourses from the elementary factors of the business and by the time he is through the audience usually gets the picture. At this event, he did the same trick and it worked, marking the highpoint of the third day’s proceedings. This was also the day that the Lagos State Commissioner for Waterfront Infrastructure Development, Prince Adesegun Oniru, was billed to address the gathering and expectation was high.
Since late 2007, government task forces had been clamping down on many dredging sites for various reasons. Environmental concerns have been cited by the state government. But equally important was the issue of inter-agency collaboration between the state government agencies and the federal government agencies, especially, the National Inland Waterways Authority, NIWA. Lagos State has moved to restrict the regulatory activities of NIWA and the matter has reached high federal quarters, with the possibility of a referral to the Supreme Court for determination of various matters in dispute. So the speech by the Lagos State Commissioner was highly expected. On this third day however, the Commissioner sent a top official in charge of dredging portfolio in the state bureaucracy, Engr S S David with his speech. DDH gathered the difficulties of navigating the traffic problems created by the ongoing partial closure of the Third Mainland Bridge could not be ruled out as factors that prevented the Commissioner from showing up in person. But his speech was clear and to the point: dredging activities have both positive and negative effects on the environment and therefore any responsive and effective government would put up effective and proper monitoring of such activities to forestall catastrophic fallouts for the environment. The paper gave some examples of such fallouts in parts of the state.
Secondly, the paper said that the state government had “identified several legislations which the Federal government inherited from the military regime that are working against the peoples’ interest…” Some of these were listed as: The Constitution of the Federal Republic of Nigeria (1999), The land use act 1978, The National Inland Waterways Authority act (1996), The Nigerian Ports Authority Act (1999).
In further developments, the Lagos State Government has come out with new rules for dredging activities in Lagos State.
Overall, this year’s summit registered well on the achievement table as another milestone in the quest for knowledge, understanding, profitability and as a forum for marketing products and services for all delegates and participating companies.