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NPA completes due diligence on Lekki Deep Seaport

By BusinessNews Staff on October 25, 2014

One of the key investor in the $1.5 billion deep seaport situated in Lekki, Lagos, the Nigerian Ports Authority (NPA) has completed due diligence on the federal government’s involvement in the project.

The federal government had required the conclusion of the due diligence as a condition before it will commit its resources into the construction of the project.

This is coming on the heels of reports that the construction of the deep seaport is hampered by the inadequate funding from financial institutions.

On completion, the deep seaport is expected to ease congestion presently plaguing the ports situated in Apapa besides propelling economic growth in the maritime industry.

The port is expected to become operational by 2018 with the next phase of its construction starting in earnest.

The project is a public private partnership one between the federal government (represented by NPA), the Lagos State Government and the Tolaram Group. A shareholder’s agreement to this effect was signed in December 2012 by the three parties.

Sources close to the promoters of the project said Lagos State Government equity and that of the Tolaram Group are in place, whilst NPA is in the process of making its equity contribution to the project.

It was gathered that NPA carried out and concluded its due diligence on the project through a KPMG to ensure accountability, transparency and value for money of the project.

The Federal Executive Council approval for the project and issuance of the finance guarantee was received in December 2013.

Confirming the development, the Chief Finance Officer, Lekki Port, Mr. Sandeep Parasramka said: “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 Limited 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, Incorporation, Philippines, a leader in the container terminal operations with a footprint across the globe”.

According to him, 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 containerised, liquid and dry bulk cargo par international standards.

“It will have significant positive macroeconomic impact estimated at $361 billion over the entire concession period. It is expected to contribute more than $200 billion 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,” he said.

[This Day]

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