Recession: FG may review $118m investment in Lekki Deep Seaport
Strong indications emerged that the Federal Government may be planning a downward review of its 20 per cent equity holding in ongoing Lekki Deep Seaport project.
The mega deep seaport project estimated at over $1.5billion, is being built under a Public -Private Participation PPP scheme in which the Federal Government represented by the Nigerian Ports Authority NPA, and Lagos State Government hold 20 per cent equity respectively while the Tolaram Group of Singapore holds 60 per cent.
While the Lagos State Government has paid its $118 covering its 20 per cent, NPA has paid only $5million and is considering a reduction in its equity participation, given the economic conditions, especially scarcity of foreign exchange.
Managing Director of NPA Ms. Hadiza Bala -Usman, who gave the indication in Lagos during a session with the maritime media as part of events marking the 100 days in office of the new management, said that the organization is considering a reduction in the government’s holding in the project.
According her , the decision of the management to reduce government’s stake was in line with the present economic realities in the country, as the funds could be channeled into other developmental projects.
“The idea of investing in the project is good but we are talking about more than a $100million, which might not be readily available now given the economic conditions on ground and which could be deployed to other areas of urgent need now since the government may decide to increase its stake in the future when the need arises”, the MD said.
She alsop said: “We however hope that the proposed reduction in government’s equity participation will not in any way affect the speed and time frame for the completion and delivery of the project”.
It was however not clear what the level of government’s equity holding would be reduced..
Investigations showed that the authority has already paid $5million, which entitles it to a total of 4.4 per cent equity holding in the project.
Bala-Usman also hinted that the Federal Ministry of Transport was yet to approve the decision of the management of NPA to effect a reduction in government’s shares.
The three parties had in December 2010 signed a shareholder’s agreement on the project, after which work started at the site.
The project, which was originally scheduled to be completed in 2012, was however shifted to 2017, which is currently not feasible.
Stakeholders have however expressed concerns that the reduction in the shares of the overnment might further delay the takeoff of the project.
Meanwhile the NPA-boss had while fielding questions from newsmen pledged to cooperate with sister agencies in order to ensure efficiency and competitiveness of the nation’s seaports.
Specifically, she said that the authority would align its Information Communications Technology with those of sister agencies in order to develop a National Single Window platform.
She however decried the un-cooperating attitude of some stakeholders, especially in terms of conforming to set industry standard and the rule of law, which she warned will not be tolerated.
The Lekki Port is located within the privately owned Lagos Free Trade Zone located in Lekki, approximately covers 60kilometres east of the city of Lagos even as the first phase of the development of the site covers 218 hectares while the second phase is proposed to cover 1,275 hectares.
The port project is in line with Nigeria’s dream of becoming a hub port for countries in the West and Central African sub-region.