PMB Legacy Series (1): Lekki Deep-Sea Port, Lagos
By Tolu Ogunlesi
A JINX BROKEN:
As President Buhari formally inaugurates the Lekki Deep Sea Port in Lagos on Monday January 23, 2023, it is worth highlighting that this landmark inauguration is taking place against the backdrop of the fact that only one new Sea Port was (partially) developed in Nigeria within the last forty years: the Federal Ocean Terminal (FOT), where construction of the first phase lingered from 1980 to the mid-1990s.
Let’s think about that for a second. Africa’s largest and most important economy — and most populous country, currently adding the equivalent of Liberia’s population every year — somehow struggled to deliver even a single greenfield port project, for decades. Until Lekki Deep-Sea Port, where construction started in July 2020, during a pandemic, and was completed in October 2022.
Lekki Deep Sea Port is therefore another jinx broken, and it is a demonstration of what is possible when national and subnational governments cooperate and collaborate to incentivize and facilitate private investment.
President Buhari goes into the history books as the first Nigerian leader under whom construction of a Standard-gauge Rail Line (Lagos—Ibadan SGR) AND a Deep-Sea Port (Lekki) COMMENCED and saw COMPLETION.
The Project is a Public-Private Partnership (PPP), whose realization has been driven President Buhari’s commitment to leaving an unassailable legacy of infrastructure development in Nigeria.
A TIMELINE OF THE PROJECT JOURNEY:
· The idea of a Port in Lekki was first mooted in the late 1970s, at a time when Nigeria was grappling with a debilitating case of congestion at the Lagos Ports — resulting in a ports construction blitz that delivered Tin Can Island Port in 1977, and the new Warri and Calabar Ports in 1979.
· Even though the original concession agreement for the development of the Lekki Deep-Sea Port was signed in April 2011, EPC Contract Signing in 2012, and FEC approval obtained in December 2013, financial close — and then commencement of construction — did not happen until the Buhari Administration. (In fact, it is said that President Obasanjo had given approval for the project as far back as 2003).
· The financial journey started with the signing of a Letter of Intent between the Lekki Deep Seaport developers and the financiers (China Development Bank), in April 2019, kickstarting the commencement of the negotiation phase. (Earlier, in April 2018, the official flag-off ceremony of the project, by Vice President Yemi Osinbajo, on behalf of President Buhari; and in December 2018, a revised Concession Agreement was signed).
· A month later, May 2019, the Finance Guarantee provided for the project by the Federal Government of Nigeria (FGN) was approved and signed.
· In October 2019, the Lagos State Government signed a $629 million financing facility with the China Development Bank (CDB). The first tranche of this loan was disbursed by the Bank in April 2021.
· This paved the way for the official award of the Concession in December 2019, with a delivery period of 30 months.
· Main Construction works (starting with the Quay wall) started in October 2020, and the project went on through the pandemic, and was completed in October 2022.
WHAT DID THE BUHARI ADMINISTRATION DO TO MAKE THE LEKKI DEEP SEA PORT A REALITY?
1. FGN signed-off on a (revised) Finance Guarantee for the project in 2019.
2. InfraCredit (a subsidiary of Nigeria’s Sovereign Wealth Fund) in 2021 provided a Guarantee for Lagos Free Zone Company’s (LFZC) NGN10.5 billion 20-Year Infrastructure Bond. LFZC is both the Manager of the Free Zone in which the Port sits, and the infrastructure development subsidiary of Tolaram (which owns a 22.5% stake in the Lekki Deep-Sea Port).
3. As the regulator of Ports and Port Operations in Nigeria, the Nigerian Ports Authority (NPA), under the leadership of MD/CEO Mohammed Bello-Koko, fast-tracked Presidential approval for the designation, in July 2022, of the Port as a Customs Port and Approved Wharf (and got this gazetted in record time).
4. Nigerian Ports Authority (NPA) worked with the UK Hydrographic Office (UKHO) to get Lekki Deep Seaport coordinates and layout of sub-sea communication cables included in the Admiralty Charts.
5. Nigerian Ports Authority (NPA) promptly made provision for a sinking fund for the Deep Seaport, as its equity contribution.
6. Nigerian Ports Authority (NPA) set up an experts-led Delivery Team to oversee the project, and fulfilled all operational preconditions — provision of Tugboats, Pilot Cutters, Mooring Boats, Navigational Equipment, Tariffs, Safety Support, Traffic Management for access roads, etc. — in a timely manner.
7. The unwavering focus and commitment of the Administration, exemplified by the actions of the immediate-past Minister of Transportation (2015–2022), Rotimi Amaechi. From August 2020, HM Amaechi instituted quarterly site visits, followed by monthly visits (multiple visits a month in some instances) to oversee the construction and resolve any issues arising.
8. In July 2022, the Federal Government awarded a Road Tax Credit project (under President Buhari’s Executive Order 7) to Dangote Group, for the construction of a new 54km access road to link the new Deep-Sea Port to the Shagamu-Benin Expressway, through Epe.
9. On its own part, Lagos State has recently completed the Dualisation of the 19km stretch of road between Eleko and Epe T-Junction, to further improve road access to the area. Lagos State has also committed to expanding the Ajah to Eleko Junction section of the Lekki-Epe Expressway.
10. In a sign of increasing cooperation between sub-national governments, Ogun State has also completed construction of Ijebu Ode-Mojoda-Epe Road, which links Lagos State’s own Lekki-Epe Expressway projects.
THE PORT:
Lekki Deep Sea Ports is Nigeria’s first Deep-Sea-Port, and first fully-automated port, with shareholding as follows: China Harbour Engineering Company: 52.5% | Tolaram: 22.5% | Lagos State Government: 20% | Nigerian Ports Authority, on behalf of FGN: 5%
The Port (Phase 1 completed in Q4 2022, and commissioned by President Buhari in January 2023), has the following features:
· It is the first fully-automated Sea Port in Nigeria, equipped with state-of-the-art Super Post-Panamax ship-to-shore cranes, and RTG cranes.
· Phase 1 sits on an area of 50 hectares
· Approach channel is around 11km long and 16.5m deep; Main breakwater is 1.9km long
· When fully-completed, Quay length of 1,523 meters, and Turning Circle diameter of approximately 600m
· In Phase 1, two (2) container berths with total capacity of 1.2 million TEUs annually (upon final completion, there will be a total of three container berths, one dry bulk berth and three liquid berths)
· Concession period of 45 years
· Commercial operations will commence in Q1 2023
· The most modern Sea Port in West Africa
