Hope Rises On Lekki Deepsea Port Project

·         Second phase of  port development commences soon
Even though there was initial apprehension about the 2018 take of date, there are indications that grey areas and deadlocks have been cleared by the stakeholders in the multi billion Naira Lekki Deepsea port project.
 

·         Second phase of  port development commences soon
Even though there was initial apprehension about the 2018 take of date, there are indications that grey areas and deadlocks have been cleared by the stakeholders in the multi billion Naira Lekki Deepsea port project.
 
Shipping Position Daily confirmed last week that, the facilities which is reputed as Nigeria's first ever private/public partnership port, has received a major boost with the recent conclusion of the due diligence required by one of its key investors, the Nigerian Ports Authority (NPA)
Shipping Position Daily had reported exclusively recently that, the port’s three promoters are, namely: Federal Government of Nigeria, Lagos State Government and Singapore based investor; Tolaram group had some disagreements. A Shareholder’s Agreement to this effect was signed in December 2012 amongst all three parties.
While the Lagos state government was reported to be uncomfortable with the Federal Government which is represented by the Nigeria Ports Authourity (NPA), the duo of Tolaram and the Federal Government were also reportedly raising eyebrows over the 18.5% equity allocated to the port’s host state of Lagos.
A source close to the three promoters, said last week that, “with this development, the much anticipated funding from shareholders expected to fuel rapid construction of the Lekki Port will now be ploughed into the project, so that the next phase of development can commence in earnest”.
He confirmed that, the state government, while the equity of the Tolaram Group are in place and that NPA is in the process of making its equity contribution into the project. “It is standard procedure for due diligence to be conducted by shareholders before infusion of equity into a project”, he confirmed.
“NPA has carried out and concluded its due diligence on the project through a credible auditor, KPMG, to ensure accountability, transparency and value for money of the project, which is essential and crucial to a project of this magnitude. The NPA on its part has also got its Federal government budget approved by the National Assembly.”
Giving further confirmation, the Chief Finance Officer of Lekki Port; Mr. Sandeep Parasramka, told our correspondent that, while major developments, particularly as it concerns the company’s drive in ensuring that Lekki port becomes operational by 2018. “Apart from getting the concession from NPA to build Lekki Port, Tolaram has put together leading global consultants such as Standard Chartered Bank, the Louis Berger Group Inc., Delta Marine Consultants, BMT Asia Pacific, TBA Netherlands, Jardine Lloyd Thompson Pte Ltd and GMaps, following which the EPC contractor, China Harbour Engineering Company  has been appointed to build the port and the container terminal has been sub-concessioned to International Container Terminal Services, Inc, Philippines, a leader in the container terminal operations with a footprint across the globe”.
“The project will make Nigeria the gateway to the West African region and will be one of the most efficient and modern maritime facilities, catering for containerized, liquid and dry bulk cargo par international standards
Lekki Port will have significant positive macroeconomic impact estimated at $361bn over the entire concession period. It is expected to contribute more than $200bn to the government treasury while also creating close to 163,000 new jobs in the economy
“The stage we are in now is structuring the financial terms, which will take a short period before funding is made available to Lekki Port.  It is only normal that when you do such a large financing of a huge project such as this, it takes more time than building a house”, Mr. Parasramka said.
He added that “we understand that all shareholders are very committed to ensuring that the scheduled operational date of 2018 is very much on course and are making rapid progress towards this, with the view to kick-off construction works in the last quarter of 2014.
Similarly, the Executive Director Finance & Administration of NPA, Mr. Olumide Oduntan confirmed that the sale of land transaction between the Lagos State and the port promoters does not affect the Deep Sea Port project as the land in question is not the land designated for the port site.  It is a separate and distinct transaction that does not include NPA nor have any relationship with the project. Simply put, the transaction was a creative way for the state government to fund its shares in the Lekki Deep Sea Port project.
He expressed satisfaction with the pace of the development of the project and noted that the NPA is finalizing documentation and internal processes (including a due diligence report prepared by KPMG after which it plans to infuse its equity contribution into the project.