• Banks Hold Back On Funds
• 2014 Construction Take-off Unlikely
Contrary to assurances that the highbrow Lekki Deep Sea Port project is steadily on course, there are confirmations that all is still not well between the three stakeholders, namely: the Nigerian Ports Authourity (representing the Federal Government of Nigeria), the Lagos State Government and the Singaporean core investor; Tolaram Group.
• Banks Hold Back On Funds
• 2014 Construction Take-off Unlikely
Contrary to assurances that the highbrow Lekki Deep Sea Port project is steadily on course, there are confirmations that all is still not well between the three stakeholders, namely: the Nigerian Ports Authourity (representing the Federal Government of Nigeria), the Lagos State Government and the Singaporean core investor; Tolaram Group.
Our investigations at both the Lagos state government and the NPA hinted at the fact that the initial misgivings over equities may not be over yet. Shipping Position Daily recalls that, Lagos state had earlier frowned at the slash of its equity of 20 per cent to 18.5 per cent.
The equity volte-face is still unresolved, so are issues relating to release of funds by financial institutions.
On the strength of the disagreements, Tolaram Group has again shifted the port’s commencement date to 2018. Insiders say this is the fifth time that is happening.
Billed to gulp a whopping $1.5Billion, the original equity is in the ratio of: Federal Government, through the NPA -20 per cent equity, Lagos State Government- 20 per cent while and Tolaram Group, the core investor, had 60 per cent. The state’s equity has however been slashed to 18.5 per cent, to shore-up Tolaram’s to 61.5 per cent.
The Lagos state government whose equity is based on the 805 hectares of land that it provided at the highbrow Lekki is still raising dust over what a senior government official referred to as the land’s ‘revaluation without due diligence’. The official confirmed that meetings are still ongoing between the three partners to resolve the issue of Lagos equity.
Similarly, a senior official of NPA confirmed to our correspondent last week that there are issues with the value of the land on which the port complex is to sit.
He confirmed that, the stakeholders are yet to ascertain the actual value of the land that was given by the Lagos State Government for the project. He also confirmed that the Land had been valued and that it was used to arrive at the 20 per cent equity.
Shipping Position Daily recalls that at a recent forum, the Director of Finance of the Lekki Free Trade Zone project; Mr. Kundan Suainani confirmed that the Lagos State government actually gave 805 hectares of land.
A source close to the project told one of our correspondents last week that there are still a few hitches about “financial disclosure” He said this may not be resolved until the first half of 2015.
A few of the banks are also yet get what he called ‘Principal Board Approval’ from their shareholders.
Shipping Position Daily also confirmed that the lending parties are yet to agree on appropriate terms of lending, even though due diligence is said to have been concluded.
It was also confirmed last week that, as at now no financial institution has released any funds.
Our sources confirmed that the recently announced facility of $150Million from the African Development Bank (AfDB) is also affected.
The funds constraints, coupled with the unresolved disagreement with the Lagos State Government is further threatening the construction work which has been scheduled for last quarter of 2014.
Discussion about this post