By Stephen Ubanna
Hopes brighten for the completion of the Lekki Deep Sea port, located in the outskirts of Lagos, as China Development Bank grants a N629 million for the project. The loan was said to have been successfully negotiated by Tolaram Africa, a member of the Tolaram Group, the parent Company of the Lekki Port LFTZ Limited in Collaboration with the China Habour Engineering Company, CHEC, which has acquired the majority shares in the multi-million project.
That much was confirmed by the Lagos state government in a Statement an indication that the loan was secured from the Chines Bank after the Chinese Company , CHEC, acquired 52.5 % , shares in the project . Already the Chinese firm has signed a 45-year concessionary agreement with the Lekki Port LFTZ , overseeing the project.
Babatude Sanwo-Olu, the governor of Lagos, whose state and the Nigerian Ports Authority, NPA, also own share in the project could not hide his feelings as he declared that the signing of the concessionary agreement and the $629 million loan secured from the CDB, has ‘’ended a period of uncertainty that had characterized the delivery of the project’’. He said that the completion of the Project would gulp $1.6 billion and would go a long way to invigorate the state economy.
Prior to shedding its weight in the Lagos deep seaport port, Haresh Aswani, an Indian and Managing Director, Tolaram Africa, had said that that the Company had no option but to go for the CDB loan facility, because ‘’it was not easy to raise all the money needed for the financing the project from the shareholders alone’’.
Take for instance , the Tolaram Group, represented in the project by the Tolaram Africa, initially had a 75 % equity in the project, Lagos state government 20 % and NPA 5%, which gave the Indian firm a majority shareholding and responsibility for the building of the port.
Many believe that the Tolaram Group hay have taken the business decision to dispose majority of its shares to the Chinese , because it could no longer the cost of building the facility because of other Competing needs. The deal was said to have been sealed after several months of discussion including visit by the officials of the Chinese Company to Nigeria to assess the state of work at the deep seaport before agreeing to commit their funds to it.
Convinced that it was a viable project worth investing in, the Company has no option but to take over the 52.5% of its Tolaram Group shares in the project leaving the Indian investors with only 22.5 % . The good news was that the Lekki Deep seaport project will be financed with the $629 million loan from the CDB and an additional $470 million value in equity from the CHEC, which now has a majority shares in the project.
Note that work on the multi-million project , regarded as the first deep seaport in Africa had been stalled over the years because of paucity of funds. It is not surprising why officials of Tolaram Group , particular, are optimistic that the Chinese Bank loan and the involvement of the Chinese , investors in the project would speed up the on-going massive construction work at the project site
Recall that prior to the Chinese Company buying into the project and the CDB multi-million dollar loan facility, a Consortium of six Banks, comprising of African Development Bank, ADP, who has Akinwumi Asina, a one-time minister of Agriculture and Rural Development as the President, the European Investment Bank, EIB, Standard Chartered Bank, SCB, RMB, African Finance Corporation, AFC, and Standard Bank had provided the funds for the financing of the project.
The six Banks may have agreed to participate in the joint financing of the project when approached by the Tolaram Group , which incidentally is the parent company of the Lekki Deep seaport LFTZ Enterprises Limited, overseeing the project , which maritime analysts believe would pressure of cargo traffic at the Apapa and Lagos Island ports.
Biodun Dabiri,, Chairman, Lekki Port Board of Directors, is a happy man that work would resume soon at the deep seaport after several months of inactivity due to financial constraints. Describing the development port as very ‘’strategic for the growth of the Lekki Free Trade Zone, LFTZ, the lekki Port Board Chairman, averred that it would enhance the economic growth of the country.
Seconte Davis, NPA, Executive Director , Marine and Operations , may have spoken the mind of Hajia Hadiza Bala Usman, the Managing Director, at a recent meeting with stakeholders at Apapa , when he disclosed that the promoters of the Lekki Deep seaport project ought to have concluded the financial closure of the port project last September but shifted to Wednesday ,October 23, 2019, to tidy up all the gray areas.
Davis, was said to have made it clear to those that cares to listen that the completion of the project would help shippers to achieve ’’ economy of scale in shipping their Consignments which requires larger ocean going vessels that will lower their cost of freight per twenty foot Equivalent Units, TEUs that comes into the Nigerian deep seaport.
According to him, the shipping companies are taking advantage of the Lekki Deep seaport in building larger vessels as the port has the draft needs to accommodate the bigger vessels. Given an insider information, he said the port was designed to have three Container berths , three liquid berths, and long dry bulk cargo berths.
The NPA Executive Director noted that at the completion of the project, it would initially handle close to 1.5 million TEUs of Containerised cargoes annually but these would be increased to 2.5 TEUs in its future development.
Perhaps, to ensure that the bigger ocean going vessels sailing to the port would never encounter any problem on the Channel leading to the port, he dislosed that it would be dredged to 14 meters depth, which would be deepened to 19 meters as vessel traffic to the port grows, noting that the break water , which protects vessels from the waves is currently 1.5 meters long.
The god news about the multi-million naira Lekki deep seaport project, according to maritime experts is that it will make an immense impact on the nation’s economy by creating no fewer than 200,000 jobs ,and boosting the government revenue generation by about $350 billion over the 45 –year Concession to CHEC.
While Aswani, the Managing dIrector of the Tolaram Africa, the Company which was initially overseeing the project believes that its completion would solve the country’s export problems, Ralph Agbogu, Managing Director , Sovereign Gate International limited , an Apapa based Clearing agency and Director, Public Relations, National Council of Managing Directors of Licensed Customs Agents, NCMDLCA, an Association that ranks itself as’’ trade facilitators, experts in goods Classification, and interpretation of the Customs Tariff , believes that the deep seaport may not serve the desired purpose because of the’’ difficulty of accessing it’’.
Agbogu, lamented their recent visit to the port and how they have to find their way back to Lagos through Ijebu-Ode, a town in Ogun state. This may have informed why he suggests holistic review of the transport chain to accommodate all relevant areas of the sector in order to increase its contribution to the country’s GDP, which currently stands at 7%.
Appealing for government intervention to make the Lekki deep seaport accessible to Truck owners involved transporting cargoes from the port to the importers’ warehouse or any other destination transporters and other people involved in the transport chain.
He may have exposed the shipping Companies when he an insight on why the south eastern ports of Warri, Calabar and PortHarcourt Area I, in Rivers state are having difficulty in attracting vessels to the ports despite all efforts . He noted that an Onitsha based trader and importer in Anambra state, have no reason to patronise the Lagos ports of Apapa or Tin can Island to take delivery of their cargoes but for the undue pressure from the shipping Companies on them to do so. Going by the law governing importation of goods, the importers have the right to determine the port to use to take delivery of their cargo.
Investigation by the Magazine shows that many Onitsha based importers may not have wanted to take delivery of their Consignments from the Lagos ports leaving Warri port ,located in Deltata state , Port Area 1 Rivers state or calabar port, in Cross river state which are closer to their business location.
An Agbogu, who was a guest of MARAN, at its recent Roundtable at the Apapa International Press Center revealed that the shipping Companies give a rebate of $100 to the Onitsha based importers, particular, to force them to patronise the Lagos ports , in the south geo-political region in order to abandon the ports located in the Niger Delta , which are closer to the south eas traders.
He alluded to the shallow drafts in the nation’s seaports why most ocean going vessels sailing to Nigeria ports with cargoes are transshipment vessels.A source at Maerskline shipping Line told the Magazine that it is cheaper for them to land any of the Lagos seaports with their trans-shipment vessels which takes about three weeks than taking their vessels to the port of Warri, Calabar or Port Harcout rea 1, which may take about three months.
According to him, it does not make any economic sense to go to any of the south eastern ports to discharge importers’ Cargoes and return back to their base in in Europe , North America or the Asian countries of India or China to carry other cargoes.
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