The National Inland Waterways Authority (NIWA) has plunged a company it duly awarded a multi-million shipwreck removal contract to into debt after illegally stopping it from executing the contract.

Following a bidding process, NIWA awarded the contract to evacuate a vessel named MT Raniya from Kirikiri River in Lagos State to Proforma Projects and Services Limited on February 2, 2023, and the company almost immediately moved its staff and machinery to the site.

Before the approval, the wreck had been buried in the waterways for nearly two decades, causing navigational challenges and multiple accidents, FIJ learnt. It was only in 2023 that NIWA decided to take action by advertising the removal of the wreck and its subsequent sale.

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Billed to be concluded in six months, the contract was premised “no cure, no pay basis” arrangement, a term that required the company to independently fund the removal of the wreck, sell it as a scrap to any willing buyer and then recoup its investment by taking two-third of the sale proceeds while the agency takes one-third.

According to the approval letter dated February 2, 2023, “Wrecks removal approval is based on no-cure, no-pay principle. Profit-sharing from the sales of the wreck as scrap shall be based on 1:2 ratio as contained in the NIWA approved recent tariff booklet (sic).”

Explaining how the profit-sharing worked on November 20, Kalu Jonah, the Proforma Projects and Services Ltd’s chief executive officer (CEO), said, “The revenue is to be divided into three equal parts: one part to the NIWA, one part to the company as returns on investment and the last part to cover the company’s cost of removing the wreck. So, until we remove the wreck and sell, there would not be any revenue for us.”

Shortly after the approval, the company moved its cranes, barges and other heavy equipment to remove the site.

From the company’s perspective, the deal was promising and it was excited to execute it within the agreed timeframe. While some skirmishes sprung up a few months into the project, the company was still making progress in hiring local and foreign specialists to evacuate the scrap.

STOP WORK!

Five months after the approval, the company received a directive to stop the evacuation due to an ownership claim by an unnamed interested party.

“With reference to the approval granted you ref Ma-0875/VOL.1/48 to evacuate the wreck “MT Raniya” located at Kirikiri waters, Lagos State, you are hereby directed to stop evacuation/wreck removal work immediately,” NIWA’s July 25, 2023 letter stated.

The agency, however, promised to resolve the issue “in good time”.

“This stop-work order is prompted by the need to verify ownership claims placed on the said wreck ‘MT Raniya’. Please be assured that the verification exercise will be concluded in good time,” the agency wrote.

A few months following the stop-work directive, the NIWA issued another directive greenlighting the continuation of the work.

“With reference to the approval granted you, ref Ma-0875/VOL.1/48 to evacuate the wreck ‘MT Raniya’ located at Kirikiri waters, Lagos State and the subsequent letter Ma-0875VOL.1/67 asking you to stop the evacuation/removal of the said wreck, I am directed to withdraw the stop-work-order and request you to resume the evacuation of the above-mentioned wreck immediately,” an October 17, 2023 letter read.

STOP WORK, AGAIN?

With the October directive, the company returned to the site, recording some progress. But then, NIWA came up with another disruptive order, stopping further work.

In a letter dated April 19, the federal agency ordered the company to stop operations at the site. The letter indicated that the owner of the vessel had petitioned the Federal Ministry of Marine and Blue Economy that it was not notified before the removal action was taken.

Interestingly, the wreck had been abandoned for about 19 years in the waterway without anybody talking about it or laying claim to its ownership. Equally, the bidding for (and approval of) the contract was advertised in The Sun and The Punch, giving anyone with vested interest in the wreck two weeks to present their case.

“With reference to a letter from the Ministry of Marine and Blue Economy ref: Mar24-EC00316 of 4th April 2024 on the above subject matter, I am directed to request you to stop further wreck evacuation/removal work on the said vessel ‘MT RANIYA’ pending peaceful resolution of the petition,” the letter stated in part.

“Accordingly, you are as a result of this directed to stop immediately any further efforts regarding the evacuation/removal of the wreck ‘MT RANIYA’ until a peaceful resolution is achieved. Your prompt compliance is greatly appreciated.”

Jonah accused NIWA’s management of being insensitive to his company’s plights.

“We did not do any wrong. We responded to their newspaper adverts and got the contract on merit. After they awarded it to us, they still advertised the award and nobody responded in two weeks. That validly convinced us that the wreck was not encumbered,” he said.

“On April 19, they wrote to us to suspend our work for no reason provided in the contract but for the flagrant abuse of authority not minding the effect and implications on our business and finances. Our efforts to peacefully resolve this situation directly with NIWA have proven unfruitful, as the stop-work order persists.

“The wreck has been partially submerged and grounded for nearly 19 years, creating hazardous conditions that have led to numerous accidents along this critical waterway.”

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THE DEBTS, THE INTERESTS

Being a capital-intensive project, the company had to take formal and informal loans to execute it. As it stands, the longer the delay, the more interest accrues on those loans.

Since April, the project has been at a standstill.

“Now, where are we going to get money and settle our debts? Interests on borrowed funds are mounting, banks and private bodies that gave us funds running into several millions of naira to execute the project are on our neck, threatening us seriously to the extent that we do not sleep well in our homes,” Jonah said.

“The emotional torture is better imagined than being experienced. Our goodwill has been badly damaged and bastardised. Our other related businesses have been closed for lack of funds, employees’ salaries are no longer paid, with many months in arrears.”

Beyond the official obstruction, Jonah told FIJ that there had been other forms of challenges mainly from security and non-state actors.

Before leaving the site, the company had successfully located the spot where the shipwreck was located. With their exit, the wreck became unprotected, giving vandals the opportunity to loot some parts of the vessel.

What this means is that anything stolen from the shipwreck so far directly affects the profitability of the project and shrinks the company’s ability to recoup its investment.

“Since the commencement of this project, we have faced multiple and serious impediments, seemingly coordinated by influential individuals within the NIWA’s top management,” the company’s CEO told FIJ.

“The shipwreck was illegally vandalised, with the visible portion above water removed by unauthorised persons, leaving only the submerged section, which our contract specifies for removal. This illegal alteration has increased both the cost and complexity of our task, putting our project at risk.

“Our personnel on-site have encountered frequent and severe disruptions and confrontations from unidentified individuals attempting to forcibly halt our operations. These disruptions have escalated to physical intimidation, with our team facing repeated threats and forced stoppages.

“I suspect that certain officials within NIWA appear to be leveraging their positions to cause intentional delays and project obstructions. These actions not only hinder our ability to fulfil contractual obligations but also result in significant financial losses as we continue to deploy resources without progress due to these impediments. Our efforts to resolve these issues directly with NIWA have proven unfruitful, as these obstructions persist.”

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FIJ was unable to get NIWA’s comment for this report. Suleiman Makama, the acting general manager at the corporate affairs department of the agency, neither answered calls placed to his phone nor responded to texts at press time.

However, Horsefall Dakio, the general manager of marine services at NIWA, confirmed the award of the contract over the phone to FIJ on Friday, saying an investigation was still ongoing.

“I am out of the office already. I cannot get the details of what you are asking for. But in summary, we gave the project to the company and then, some persons came and said it belongs to them,” Dakio said.

“They wrote a petition and we had to stop to investigate. After the investigation, we found that there was no merit in the petition. The company resumed work but the people claiming ownership went ahead and petitioned the Federal Ministry of Marine and Blue Economy.

“The ministry now asked us to re-investigate. The ministry directed us to stop the company to re-investigate the matter afresh.”

While Dakio asked FIJ to speak with the spokesperson to hear the formal position of the NIWA over the matter, he had not responded to inquiries at press time.