The House of Representatives has accused the Minister of Transportation, Rotimi Amaechi, and the Nigerian Maritime Administration and Safety Agency (NIMASA) of diverting $195 million from the Cabotage Vessel Financing Fund (CVFF) to fund the so-called deep blue project.
A member of the House of Representatives, Benjamin Kalu, while speaking at plenary on Wednesday, moved a motion calling investigation of the deep blue project, stating that it was fraught with several illegalities including “using monies diverted from the Cabotage Vessel Financing Fund” to fund it.
The CVFF was created under the Coastal and Inland Shipping Act, otherwise known as the Cabotage Act, of 2003 to promote indigenous tonnage. The Fund provides for two percent contribution by ship owners involved in the coastal and inland shipping trade in Nigeria. It was set up so that Nigerian ship owners can borrow money from the Fund at single digit interest rate to acquire vessels for Cabotage trade.
However, since its establishment more than 18 years ago and with more than USD250 million accruing into the CVFF account, no ship owner has been able to borrow from it.
On the other hand, the deep blue project, which is also known as the Integrated National Security and Waterways Protection Infrastructure in Nigeria, was commissioned by President Muhmmadu Buhari on June 11. However, piracy and other criminal activities have persisted on the nation’s internal waters and in the Gulf of Guinea, despite promises that the deep blue project would put an end to the scourge.
Kalu’s motion was titled ‘Need to investigate the deep blue contract to HSL International Limited.’
Moving the motion, Kalu recalled that the Federal Ministry of Transportation, on July 27, 2017, and on behalf of the Federal Government of Nigeria, entered into a contract known as the ‘Deep Blue’ contract of $195,300,000, an equivalent of N59,839,930,000, with a foreign private company, HLS International Limited, for the supply of certain security and surveillance equipment and systems.
According to him, HLSI was also to establish the Integrated National Coastal Surveillance and Waterways Protection Solutions, with command and control of infrastructure in the nation’s territorial waters.
He said in addition to the contract sum of $195,300,000, the Nigerian Maritime Administration and Safety Agency agreed to pay the sum of $19,530,000 to HLSI as ‘Management Training Consideration,’ while according to Appendix 4 of the agreement, both sums would be paid in monthly instalments over a period of 36 months from July 2017 to June 2020, as further payments were also made as of July 2017 to date.
Citing Section 80(3) and (4) of the Constitution, the lawmaker stated that the National Assembly is the only body constitutionally allowed to authorise any expenditure from all public funds of the Federation.
Kalu stated that the National Assembly “has neither authorised nor appropriated any monies for the Deep Blue contract or any monthly expenditure, according to the foregoing payment schedule.”
The lawmaker recalled that the 8th House investigated the deep blue contract, following petitions from civil groups that the contract was fraught with sharp practices. He also recalled that in March 2018, the Committee on Public Petitions recommended an outright termination of the contract for violating appropriation laws, as it was not in the national budget.
He said, “The Deep Blue contract has since its execution, attracted public outcry regarding the grave national security implications of ceding the patrol of waterways from the statutory duties of the Navy to a private foreign firm, thereby undermining national sovereignty and security, following which President Muhammadu Buhari terminated the contract in 2018.
“The House is concerned that despite the foregoing, the Deep Blue contract has remained illicitly financed with monies neither appropriated nor authorised by the National Assembly.
“The House is worried by allegations that the Deep Blue contract has remained serviced, using monies diverted from the Cabotage Vessel Financing Fund which was established by the Coastal and Inland Shipping (Cabotage) Act as a fund strictly for the purpose of providing financial assistance to Nigeria operators to develop indigenous ship acquisition capacity in domestic coastal shipping; and which by Sections 42,44 and 45 of the Cabotage Act, can only be administered under the ministry’s guidelines approved by the National Assembly solely for Nigerian beneficiary.
“The House is also worried that the payment of N59,839,930,000 made to the foreign company to secure and survey our coastal waterways is astronomically higher than the annual capital expenditure budget of the Nigerian Navy, which was N27.2bn in 2019; N20bn in 2020; N26bn in 2021 and approved the proposal of N27bn in 2022.
“The House is disturbed by allegations that HLSI has purchased more security surveillance equipment that was not in the original contract, thereby covertly using funds meant for the benefit of Nigeria and Nigerians to finance the security acquisitions of a foreign entity.
“The House is also disturbed that the standards of most of the platforms are not good enough, which has also violated the contract agreement as it was alleged that some of the ‘newly procured ships have to be towed by Navy before they could even arrive in Nigerian waters.”
The House mandated its Committee on Navy to investigate the legality of the deep blue contract agreement to determine whether it is in line with extant laws and regulations and the standards of all platforms purchased for the Nigerian Navy.
The committee is also to determine the actual amount of money spent by the Federal Government on the deep blue project contract and “any other matter” relating to it. It is to report its findings within eight weeks “for further legislative action.”