Bureau of Public Enterprise (BPE) Meeting with Members of Nigerian Chamber of Shipping on Privatization of Nigeria Unity Line (NUL). On 14th May, 2012 at the NCS Secretariat.
This report shows an urgent need to plan the way forward;
The DG welcomed everyone present and thanked them for responding despite the short notice given for the meeting. She explained that the DG BPE had spoken to her earlier to apologize for her inability to attend personally due to other pressing official duties. She then introduced Mr. Ekuerowo who was representing the DG BPE and Mr. Adeyemi both from the Bureau.
Mr. Ikuerowo of BPE stated that the Bureau had been granted approval by the National Council on Privatization (NCP) to commence immediate privatization of the Nigeria Unity Line (NUL). He emphasized on the seriousness of Government in selling the license of NUL. He explained that NUL had no assets except the license which is valid for what it offers which are National flag, right to carry cargo for the Government and specific trade routes assigned which will be guided by the Local Content Law.
Mr. Balogun of Daddo Maritime said his issue with the initial sale of the NUL in 2005 was that his Company was part of the bidders at the last privatization exercise which ended with much concern. Daddo Maritime was first in the technical bid and if for any reason the preferred bidder was unable to meet up with the requirements, the next bidder should have been given the right. I expected other options should have been exhausted before this new bid to sell. As far as he is concerned the conditions which made it hard for the first bidder to act was still prevalent in the system because the institutional framework has not changed and one will still be left to the mercy of NNPC
Mr. Ekuerowo of BPE in his response said the first exercise had been closed and once a bid is closed they do not interfere in the internal running of the preferred bidder's organization. But as the bidder returned NUL to BPE, he was refunded his money. The procedure was to put it back on the market.
Mr. Victor Osibudu MD Vigeo Shipping posed three questions:
1. Is the license exclusive or can it be obtained through other means?
2. What is for sale, are there any assets?
3. Is there a management structure in place?
Mr. Balogun also wanted to know why the carriage of goods was still in F.O.B.
BPE stated that there was no law that allows for CIF, that the sale of NUL was predicated by presidential directive but the buyer still needs to work closely with NNPC.
Mr. Peter Olorunfemi told members that it was not the whole %40 of lifting right that belonged to NUL. The NUL license was going to be a determined potion of the %40. BPE responded that even if the potion was just %5 that it was a huge volume and would be a worthwhile investment.
The DG stated that BPE must endeavour to partner with the Chamber of Shipping to ensure due diligence in order to be specific on the authentication of data before meeting with would be buyers. She stated that the exercise this time around must be realistic and not political. That those interested in bidding must be serious minded individuals who have credible technical partners.
Mr. Ogunbanjo observed that he was involved in the earlier sale of the NUL and he would have preferred to see a position where Government still has a stake in the NUL forcing NNPC to act in its interest. He also said that there was a need for brokers to be able to manage the sale of crude because it would not be easy for Nigerians to penetrate the international crude market. Finally he stated that it was important that a legal frame work be established with NNPC in order for it to succeed.
BPE: In response stated that this time around there will be a competitive edge given to members of the Chamber of Shipping because they are looking to form a synergy and also help indigenous Companies grow. After meeting with NNPC, NIMASA and the Ministry of Justice they would come back to the Chamber to discuss in more specific details before throwing the bid open. They maintained that the environment has changed as there are laws (Local Content and Cabotage) guiding Local Content and as long as foreign Companies know this, they will fall in line.