Protection & Indemnity club: Nigerian firms to save N1.4bn annually
An estimated N1.4 billion would be saved annually by Nigerian maritime operators when the planned establishment of a Nigerian Protection and Indemnity (P&I) Club materialises.
Efforts by ship owners, the Nigerian Maritime Administration and Safety Agency, NIMASA and some insurance firms to establish P&D Club is already underway.
The amount represents what is presently paid as premium by Nigerian maritime stakeholders to foreign P&I Clubs on yearly basis. The move towards a Nigerian P&I Club, Vanguard Maritime Report gathered, followed a directive by the presidency to ship owners and NIMASA to commence the process, which is likely to be actualised sometime next year.
A source at the secretariat of the Ship Owners Association of Nigeria, SOAN, who spoke with Vanguard Maritime Report said the 39 members of the association pay over $100,000 (N36 million) annually to foreign P&I Clubs, noting that a Nigerian version will stop such capital flight.
Speaking with Vanguard Maritime Report on the issue, Chairman, Technical Committee of SOAN, Lucky Akhiwu, said that the 39 members of the association pay several millions of dollars annually as premium to foreign P&I clubs.
According to him: “It is millions of dollars and nothing comes back at the end of the year and for me, it is just taking out of our resources and is something we can syndicate here by putting money together. We do not even get a receipt at the end of the year when we pay such huge money outside the country for the P&I club, so we intend to set it up here.
”The insurance companies can be part of it but driven by a consortium of ship owners coming to establish the P&I club here, that is what we are looking at.”
Immediate past president of SOAN and chairman/CEO of Starzs Investments Company Limited, Greg Ogbeifun, recently disclosed that his company had paid about $500,000 in the last three years.
Ogbeifun said, “The directive to set up a Nigerian P&I Club came from the Presidency, and discussions are already ongoing between the NIMASA and operators. The P&I Club is something that needs to be done because of the amount of capital flight that emanates from our maritime sector to foreign nations.
”In our inaugural meeting with NIMASA over the P&I Club initiative, I presented all the P&I premiums that Starzs Investments Company Limited has paid on all its ships in the last three years and this came to almost $500,000. This premium was paid by my company to foreign P&I Clubs in the last three years despite not making any claims within the stated period.
“Now, Starzs is just one shipping company in Nigeria that has paid so much to a foreign P&I Club as premium. Imagine how much the foreign P&I Clubs make from all the shipping companies in Nigeria. The logic is to checkmate the colossal amount of money Nigerian shipping firms pay as premium to foreign P&I Clubs.”