Makanjuola: Caverton’s Partnership with LASG Will Transform Water Transportation

In this interview with select journalists in Lagos, the Chief Executive Officer, Caverton Offshore Support Group, Mr. Olabode Makanjuola speaks on Caverton’s partnership with the Lagos State Government to ensure a thriving local boat manufacturing sector and their effort to transform water transportation in the state and beyond, Excerpts

We will like to start by asking you to tell us about Caverton Marine boats?


Actually, we started out as a shipping company in 1999. This was sequel to the aviation business which we started in 2004.
 I am not going to really talk much on the aviation aspect of our business but on the marine side in spite of the fact that we are obviously own our helipad, which is the first site as far back as 2004 along this Ozumba Mbadwe Road. For those of you who remember this site, it was actually a refuse dump zone. If you remember well, there were two lanes and the refuse dump before we came here. Obviously, this is a lagoon close to the waters and we said, “why not look at this water transport?” And because I actually have a marine background, I was very passionate about it. However, the response was poor. Not a few asked, “water transport, what is your business with water transportation? How much do you want to make out of this?” At the time, obviously there were all these flying boats. So successive governments came, starting with Babatunde Fashola who built Ikorodu Jetty and a few others. He also bought one or two boats. Subsequently, Akinwumi Ambode was elected as governor after him and his administration bought a few more boats. It was during Ambode’s administration that I took a keen interest. I said to my team, and myself “why don’t we try to work with the Ambode government?” I always dread going to Ikorodu whenever we have a few family functions. This is due to the fact I cannot afford to stay in the traffic for 3 hours. I just realised that it just took me only 20 minutes to get to Ikorodu by water. However, by my knowledge and experience, you cannot promote water transport by just building jetties. You have to address the means of actual transportation from one point to another through the waterways. We were in a fix at the time. Obviously, building river crafts was not our thing. So we told Lagos State Government, “why don’t we look at building boats?” There were boats they bought that were being built by a Dutch company called Damian. They came and gave a presentation. After the demonstration, they gave us their bill. Even the governor said, “Bode, how much is this transport business that we are going to spend on this?” Obviously, the economy nosedive and that was what now forced us to look inward. I was now asking myself that the Dutch that built this boat, what did they do to build it. What do we need to do to build it here and why are we not doing it? If they can do it, why can’t we do it? Fortunately, there was one gentleman that I know. His name is Mr. Mohammed. He was in the oil and gas industry. I called him and told him that I want to do a small project. Thereafter, Governor Babajide Sanwo-Olu came in and built this huge building and I just went to him and said, look, we pay lip service to water transport. It is always nice to talk about it. We call ourselves the state of aquatic splendor but our waterways are completely deserted. There is really nothing tangible on it. And the only reason is because there is no viable means that will give anyone comfort to get on the waterways. The governor saw reason in my assertions. So the first thing I did was to assemble the team to work with me. The first thing I said to the team, “Look, build me a boat that I can get on. Don’t build me a boat that people like me will not like to get on board.” I meant a boat that people will not be afraid of getting in the waters. A boat that decent people will willingly abandon the roads and their vehicles and board it from Lekki to Ikorodu and stop travelling for 3 hours, waking up at 4am just to get to work. If you can build that, then at least we have made progress with that. We contacted the governor through a phone call and he said, “Okay, fine, go and build it and let us see.” That was where Mr. Olakunmi Agbaje, a naval architect and a few other young people came in. It was quite impressive because he now found young people that were not just interested in information technology (IT) and fintech alone. These are people that actually want to use their hands to actually create and build something. We got a whole bunch of people from Port Harcourt, Rivers State who were in the boat building industry but morale was low. We found out that there was actually a very robust, vibrant, built, boat building industry in Port Harcourt, Rivers State. At last, we succeeded in building the first boat. It is a 40-passenger boat. And the government now says, okay, fine. Do you know what, let us do it together. And I said to the government, water transportation is not just about buying boats, commissioning them and you will say I have done something. No. It makes no sense. If you have to find external ways to finance it, let us look at it as infrastructure finance and solve the problem. It is not enough to say, oh, during my time, I gave him ten boats. What are you going to do with that? It was not a big deal. And that is one of the things you hear from the operators that they always complain about. We hear about the boats. We hear about the buses. You can build as many bridges as we want. We can sand fill as much as we want. The water is not going anywhere. All we are doing is that we are transferring one problem to another. Take Third Mainland Bridge as an example, how much traffic is on it and how long it takes? How long does it take to get from Iyana Oworo to Oworoshoki to Unilag? Is it 15 minutes or what? So those are the things that we sort of now trying to get to understand. If you are going to spend billions or trillions of Naira on bridges, you can spend millions and achieve great things on water. You just need to make people feel comfortable using the water. That is one thing that we found out the few times that we take people out in our boats. If they get on, they are always initially afraid. But by the time they are coming back on the trip, half of them are actually at peace or sleeping. That is really what we are trying to do. Our plan for today is to go across to the Lagos State Waterways Authority (LASWA) to see what they are doing. They have a command center, which sort of captures the entire waterways. After that, we will do a short boat ride to Badore. Then we will take you through our boat building processes from start to finish.

How much have you invested in this?


I don’t like talking about money, but all I can say is that we have spent a lot.


Can you put a specific figure to this amount?


This is not the forum for that, we will let you know about that when the time is right. However, we have been commissioned to build 25 boats for the state government. One of the interesting things I think is that the state government is in the best position to discuss that. I think what we try to do is support them by delivering quality boats and also see how we can support their maintenance. The structure behind the operational boats, unlike the past where we have just the government doing it alone, is to encourage the private sector to operate. So there will be a process whereby the private sector will be invited and then they will lease or franchise whereby the operators will operate themselves.


How much does it cost to build a boat?


It depends on the type and size. So basically, we have two or three different kinds of boats here. The boats we are building right now are water bottom. It is flat bottom boat. It is built for Lagos routes so it is very safe.
We are also building security boats as well. We have the designs. Interestingly, we have the design studio in our head office where you have about three architects and one engineer. They are all Nigerians. I was surprised how many architects went to study architecture and then there is nowhere to practice it. We build for all types of people right now. Apart from Lagos State, we build for other states as well. These include Edo State, Anambra State and Akwa Ibom State. Last year alone we had over 900 people died on just random issues. Yes, everybody stresses for people to wear a life jacket, but I think, can we just build a good boat for them. In some clime, they do not even bother wearing the life jackets. You wear a life jacket in case of an emergency. Your life jacket is under your feet. When there is an emergency, you pull it up. The fact that you have to wear a life jacket when you are already on the boat already tells you that what you are getting on is not too safe.

Are you working with the federal government to take this further?

Yes. We have actually discussed with the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Navy. We are looking at public, private partnership. On other hand, we have been maintaining aircraft for the Air Force for long.

How do you source your raw materials for the building of the boats?

That is the sad part about it. While you are ready to move into manufacturing, you now find that the raw materials are not available. I am talking about the basic raw materials. When you look at manufacturing, without even going deeper into it, you are missing the point. For instance, we import plywood. I could not believe it. So those are some of the challenges. One thing is that when you set out to build a quality product for somebody, you find these sorts of challenges. The resin that we use on the boat we had to import. This is due to the fact that the resin that is produced locally does not meet our requirements. It is moving and it does not fit. The boats are built according to specifications, so we cannot compromise on our standards.

As a matter of fact, we have people from Veritas in our boat yard who came to certify the boats. And they were very specific. They will ask questions. Where did you get these materials from? Who did this? Who did that? Everything has to be certified. We even tried getting resin from a local manufacturer. They put it on a test and it failed. What they did was a thing called panel testing. So they will watch your process and how you produce the hull. They will take it to their laboratory and they will test it. If it reaches a certain threshold, as long as you are above that threshold, it is not an issue. Because basically if you think of a boat, the idea is that there is a certain amount of pressure that is exerted on the hull. If it is below it, at some point, it will break. And that is where you have in some cases boats are moving and it just cracks. As a result, 80% of what we use as raw materials are imported.

Going forward, it will be very expensive unless we can get our hands on some materials locally. Obviously, the main important component is the engine and the engine comes from Japan, Yamaha specifically. Although, we are now looking at various other options. We are very excited about it. We will see whether we can actually use electric engines. That for us is the next phase. Some of the major off head issues is the cost of petrol. It is extremely high these days. That is what a lot of the operators actually have an issue with. It is tough. In fact, it has been very, very tough.

You are one of the leading players in the aviation industry, what brought you to the maritime industry? Specifically, what kind of service do you provide?

Now, because of the exchange rate, like I mentioned before, we now have a local manufacturing firm, which will see that the employment that has been transferred outside Nigeria will now come back into the country. Take the boats we are building now. Why am I building the boats? We are building the boats because the government said we cannot afford to import these boats. And that really is where we are. To be fair to you, the state of the economy, as bad as it is, could possibly be a blessing in disguise. Just last week, I said to Bidemi, see, I don’t know where this dollar is going. Those people that are manufacturing, show them the template that we have produced and tell them this is what I want. And ask them if they can do it. I’m just saying, look, you want the business, this is what I want. And so they are like, Okay, we will go and look at it. I said if you have a problem let me know. This is because we are ready to deal with them. If you have a factory here, I will support you, provided you give me what I want. If you don’t give me what I want, I won’t work with you. And if they are able to produce, then we raise the standards of their own production. That is the same thing we are doing with plywood. There have been so many times that Architect Olakunmi Agbaje would reject our local sourced plywood for not meeting the required standards.

With what you have achieved locally, why do we still spend huge scare foreign currencies on importation?

Like I mentioned earlier, we have people from Senegal, Russia and even from India come on a facility tour in Ikeja. Why? This is because it is the same that you will get in United Arab Emirates (UAE) or anywhere else in the world. But people still go overseas due to the fact that they want to collect estacodes in their travels overseas, which will not be case if it is done locally. But eventually, all that will change. You need one person to say, look, I support you. Give me what I want. I don’t want to have to import and then face Nigeria Customs Services if I can the same thing locally.

The same boats that we use our hands to build, that VERITA come from Europe and certified as perfect, it makes no sense to go and build another boat that nobody is surviving. Why would I fly outside to buy a boat when I know I have people that I can do it here? I think one of the things that we are very happy and proud about is the more we build, the better our boats get. This is because as we build it, we see it and say yes, it could be better. They always call me, and I think if maybe we treat like this, it could be better. At one point, I said, look, but when you do something and you see it, then you can take pride in it. It is that sense of pride that allows you to do better.

And in doing better and producing better, there are people who will want to fractionalize. The same Dutch people were coming to lobby us to build boats. And I told him that we had started. And the next one was like, oh, okay, so you are actually building that. I said yes. And I said, oh. Okay, you know what? I need more architecture departments. You know, we have some designs that we can sell to you. And then we can just give them to you and maybe you can build them. And then, oh, by the way, we have our own downstairs as well. But it’s okay. When we are doing it, then they start realising that we don’t really need them any longer. They need us because they think the thing is good here. But right now we are doing it at home, and we are not giving people like me the opportunities. I remember when we were into tanker business in early 1999, when we were trying to help you get a tanker in order. And we wanted to hold that and we were talking about all this tanker from China. And everyone said never. That the Chinese policy is bad, everything from China is bad. China is the largest economy right now. Because they have learnt, the corrected and they kept going to do the best. One of the things that I always feel is we are so hung up on IT, Fintech and AI that we forget real infrastructure. One of the biggest industries in the UK is plumbing. I have a friend, they are multi millionaires and plumbing is what they do. It’s plumbing they do. But we are also hung up on this tech thing. People need to move. You can’t sit in your house in a virtual world and then come out and then you need the absolute discovery, you have to come out. They have to get around and there have to be people to provide that need for mobility.

From your experience, does it cost more to import or cheaper to build a boat locally? How many Nigerians do you have working for you, do you agree that they are more skilled than the foreign ones?

Well, it cost a lot more to import a boat. Our types of boat vary in size. If you are talking about local content, it is all about training. I think that is what the late Herbert Wigwe was trying to do in terms of addressing education. I trained in the United Kingdom. I studied Mechanical Engineering and an aspect of Shipping. But you find that Nigerians are doing so well in the US and elsewhere. It is training. That is what it is. If someone showed you how to do it, you would do it.

And I think it is inherent in Nigerians to drive to succeed. Yes, the society may be a bit different but the fact is that people actually want to work. And people will excel like Nigerians whatever situation that you put them in. At the yard, most of them were not doing anything in Port Harcourt like I said, and a lot of them came from there. Unfortunately, yes, there are a few. We tried to recruit a few persons last year. The work they are doing is carpentry, painting, electrical and they learned it. They are all Nigerians. So it is a case of just showing them, that this is how you do it. Don’t do it and then say it is okay. You cannot manage. No. If he manages, somebody will die. And they themselves when they see it, they will wow, yes, you did it. We actually started with nothing. An operator came and he saw, and said when did you buy this wood, I said no, we did not buy it. We built it here. He said, no, you did not build it here. And they were basically going back and forth. He said, he thought it was from China.

Are you considering making a foray into other countries, especially in the West and Central Africa Sub-regions?

Yes, we are looking at buildings in Cameroon and also in the Republic of Benin. We took the Super Eagles by boat to Benin Republic. And that in itself was what sort of encouraged us. That you can actually go to the Republic of Benin by boat. There are people that actually get to Republic of Benin from very big canoes from Marina. I think they charge N7, 000 or N8, 000.

Is there a way your engineers can work on your boats to reduce fuel consumption?

You are asking a question that I don’t want to, because it will be like I am forcing the government. But I have always told them that the first thing you have to address is the cost of fuelling. There is no point coming up with a policy that does not address concerns of private sector operators. So just you could pass it on to the private sector and then you come out and say oh, the business is profitable. Yes, the business is profitable or maybe profitable, but people are dying. The fact of the matter is that everywhere in the world, there is a provision for subsidy.

If you take a boat from here to Ikorodu and you use 200 litres, if you do that five times a day, it cost a lot. So you will be spending maybe half a million naira for fuel alone. How much will you now charge your passengers? The operator wants to operate this business for him to make money. If he has to charge N10, 000 does that make sense for him to charge that amount? So the government has to say okay, how do you help the operators? That is why there has to be that meeting point between the state government and private sector. Don’t forget that transportation is an essential part of the economy.

Are the raw materials you are using in the boat yard, especially the chemicals certified by NAFDAC?

As I said earlier, the regulatory agencies in Nigeria and overseas are all involved in the processes involved in building our boats. Apart from NAFDAC, the Standard Organisation of Nigeria (SON) is also involved.

What are the criteria being used to ensure that the boats are handed over to the right people?

That is a very, very interesting question. You know, the truth about this is that this is not the first time Lagos State is doing this. Lagos State has done it on the bus service. So the same template used for the bus service would also be used for the waterways as well as the way it was used for the Lagride taxis as well. So the same model which Lagos State has been using would be used. Since it is already using it for the bus and taxi services, it won’t be difficult leverage on it for the waterways as well. Therefore, be rest assured that it will get to the right people.

Waterway transportation is expensive to run, will you encourage subsidy for the masses to help the industry thrive?

Well, let’s also remember that there are also advantages to using water transportation. Part of the advantages is that water transportation is faster compared to road transportation. I mean, water transportation will definitely be slightly more expensive than road because of the kind of components. So that time you are saving, which we always say time is money. By saving that time, you are obviously being able to help yourself make more money as well. So I believe very well that those areas will cover up for any kind of increased cost that might be being charged on the waterways.

This is a very commendable effort on the side of the Lagos State government but people are concerned security. What measures are you putting in place to address this?

Let’s also look at history and let’s look at how many incidents we have had on the waterways. You would agree with me that it’s minimal in terms of kidnap. And the crystal reason for that is because of the presence of the Marine Police.

Is there any room to improve on that?

Most definitely, and I am sure before coming here, you also saw the Waterways Monitoring and Data Management Center. You can’t just only rely on personnel providing security of the waterways. You also need technology to also help you improve that security. So most definitely, the good record we had in terms of security on the waterways will contribute to improve the quality of the process because of this kind of boats that are coming out on the waterway.

How much will the government save with local production of boats?

To be honest, you can’t put the figures to it. But it’s really much a no-brainer. I mean, you will save them almost over 50 percent or more. Let’s just say between 50 to 70 percent as opposed to importing boats from outside Nigeria.