Fresh facts have emerged as to the real reasons Singaporean shipping firm; Pacific International Lines (PIL) pulled out of the much-celebrated ship acquisition contract with the Federal Government to create a National fleet in Nigeria.
Multiple inside sources told Shipping Position Daily last week that the insecurity on Nigerian waters, as well as commercial technicalities forced the shipping company to back out of the deal.
Recall that Minister of Transportation, Rotimi Amaechi had last year said that the deal has failed to sail through because Nigerian shipowners were unable to provide their 60 percent equity required for the national carrier
According to one of the sources, the Singaporean partners also wanted controlling shares of 51% since they are bringing most of the assets for the shipping line in terms of vessels.
He added also that the non-implementation of the Cabotage law was also part of the reason the deal didn't sail through. The PIL wanted assurances to ensure that they would always get cargo and not to start scouting for cargoes as it done presently.
On the strength of the failed deal, the source said: "My best advice to government in resuscitating our national carrier is to implement Cabotage Law to its fullest, local cargoes should be left alone for local shipowners so that we would not have a situation whereby we would have the shipping line and there would be no cargo to carry"
"If you look at countries like the US, their local Cabotage there is to ensure that their shipping sector can grow, so even if you bring cargoes from international waters, you must use American ships on American waters, but here, we see a lot of movement of foreign vessels locally, the government should give a law restricting such movements"
Yet, another source told our correspondent that the Nigeria/PIL deal is not yet over as discussions are still ongoing.
"What I know about the PIL deal is that the ownership structure is still being discussed, I understand the Singaporean partners want a controlling share of 51% since they are bringing most of the assets in terms of vessels"
"In terms of leverage, what they also want from the government is profit assurance to ensure that they always get cargo and not to just come and start scouting for cargoes. The commercial technicalities is what has been delaying the contract".
"Finance is always going to be a factor, but like I mentioned before about Cabotage, I sat down in one or two of these meetings with the minister of transport at the time when they started this discussion, a lot of people don't want to put their money where there is no commercial security, we have banks that can finance, but if you are not making it clear on how the profit would be assured, then it becomes harder for financial partners to put their weight behind it" he said
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