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CTN: How Foreign Firms Short- Change FG

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Facts have emerged on why the foreign shipping lines operating in Nigeria under the auspices of Shipping Association of Nigeria (SAN) are bent on fighting the re-introduction of the Advanced Cargo Declaration System (ACD) also called Cargo Tracking Note (CTN) in the country.

MMS Plus gathered that the international shipping lines who have been taking advantage of their monopoly in shipping business owing to the absence of Nigerians in liner shipping connived with some government officials at the Nigerian Ports to short-change the Federal Government in the accruable revenue due to her by declaring incorrect dead weight tonnage of vessels.

The multinational shipping companies in Nigeria have been sponsoring negative campaign against the re-introduction of CTN now being operated through the Nigerian Shipper’s Council (NSC), claiming that it adds no value and could make importers and exporters pay more on cargo.

Lately, the chairman of SAN, Chief Val Usifoh held a press briefing asserting that importers will pay about30million Dollars  per annum on the exercise if re-introduced.

However, a source has revealed that the campaign is an attempt to continue to cover their alleged fraudulent declaration of vessels dead weight tonnage so as not to pay the correct 3percent gross freight rate due to the Nigerian Maritime Administration and Safety Agency (NIMASA) and pay the Nigerian Ports Authority (NPA) the correct pilotage service fee.

A dead weight tonnage (DWT) of a vessel is a measure of how much mass a ship is carrying or can safely carry. And therefore, it is an important determinant of how much of the 3 percent gross freight rate NIMASA collects and that of other services NPA renders to them on call at the nation’s port.

Speaking to MMS Plus, the source asserted: “So, the correct dead- weight tonnage of the vessel can only be determined by tracking and so the CTN will be able to determine the exact dead weight tonnage of vessel. You cannot alter this. Now, they only estimate the value and so it is subject to manipulation. Anybody can short-change the government by giving any figure which is not accurate. But with CTN, accuracy of the vessel dead weight tonnage is determined from the port  of origin on sail.

“In the past, Federal Government was losing huge revenue from this. The shipping lines connive with NPA and NIMASA officials to under pay the government. So, CTN guarantees transparency because it tells you what the vessel is coming with. The Shippers’ Council officials will not tell you this truth so that it does not look like they are fighting their sister agencies but this is the truth about the foreign shipping companies fight against CTN,” the source added.

In one of his media statements, the Executive Secretary of NSC, Barr. Hassan Bello had stated: “We and the shipping companies are in the same boat because we too don’t want the CTN implementation to attract any cost. We are doing everything we can to promote a project that will not increase cost of doing business at the ports.

“This is something that is being used in leading ports all over the world like port of Singapore. However, in Nigeria, anytime a new initiative is being introduced, this people will bring up reasons why it will not work. CTN is an additional service because it adds value to the clearing process. Cargoes will be evacuated from the port very fast because the CTN will inform everybody in advance the contents of the cargoes and where such cargoes are coming from.

“The Nigeria Customs Service (NCS) is supporting it, the Manufacturers Association of Nigeria (MAN) is supporting it, why are the shipping companies so adamant? Why are they behaving as if any new initiative will inconvenience them? Why are they behaving as if they are above the law? We too don’t want to increase the cost of doing business at the ports. This is something the Federal Executive Council (FEC) has approved. Why is it that something that works in leading ports of the world is unusually inconveniencing some few individuals in our own ports? Things should not be done that way.”Bello noted.

The questions being asked by stakeholders from the insistence of the multinational shipping firms against CTN are: Why are they now fighting for Shippers when they are challenging the NSC in court for asking them to stop the collection of arbitrary levies from shippers? Can they defend the interest of shippers more than the NSC, the economic regulator empowered to do so by the government?

MMS Plus findings revealed that what could be spurring the foreign shipping operators is the monopoly and excess profit they are enjoying through expensive freight rates charged as well as dead weight tonnage under declaration, a practice only perpetrated in Nigeria with impunity.

There are approximately 400 liner services operating globally today, no Nigerian of Nigerian bottom is among them. Liner shipping is the services of transporting goods by means of high capacity, ocean going ships that transit regular routes on fixed schedules. They provide weekly departures from all the ports that each services calls.

CTN, MMS Plus further gathered was considered indispensable in line with the compliance requirements of the International Maritime Organisation (IMO’s) International Ships and Ports Security (ISPS) Code for the safety of ships and port facilities.

The decisions to introduce CTN in West and Central Africa sub-region were first made at a workshop organized by the Union of African Shipowners’ Council (UASC) in collaboration with the United Nations Conference on Trade and Development (UNCTAD) in February 2002.

Subsequently, CTN was first introduced in Gabon and Congo by their Shippers’ councils. Among other African countries operating CTN are, Angola, Senegal, Guinea, Benin Republic; they have all adopted e-CTN operation.

However, it was first introduced in Nigeria through NPA in 2010 but was resisted due to high cost ($150 per TEU) viewed as additional burden on Shippers. Subsequently, it was suspended by the Federal Government, but now re-introduced at no cost to shippers because the cost has been factored into the freight rate from the port of shipment.

Read next week: facts on CTN 

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