Nigeria has approved the sum of N200 billion ($1.354bn) for the development of the Lekki Deep Seaport in Lagos, the country’s commercial nerve centre.
The project which will be implemented through a Public Private Partnership (PPP) arrangement is expected to be Nigeria’s first deep seaport since independence and it is also expected to put end to the present congestions at various ports in the country, especially the Apapa Port in Lagos.
A debt finance structure will be used to fund $800 million of the project cost while the balance of $554.5 million would be contributed by equity, Nigeria’s Minister of Transport, Senator Idris Umar said.
He explained that the Federal government will contribute 20 percent equity; Lagos State Government, 18.5 percent; while the private investors are to contribute 61.85 percent.
“Council approved the issuance of a Guarantee to cover financial obligation of the NPA to pay compensation in the event of expropriation, war, civil disturbance, breach of contract and other event of default as per the concession agreement for the development of the port, as $800million out of the project cost is to be funded through debt financing while the balance of $554.5million is to be contributed by equity,” he said.
The Lekki Deep Seaport is designed to handle the largest vessels in the world. It is expected to cover an area of 90 hectares with room for expansion and 6 KM in length which will be dredged by the contractors.
The width of the Chanel leading to the port is put at 200 meters to be dredged to a depth of 17.5 meters, with a width of 300 meters making it the deepest in the West Africa.
The port would create over 162, 000 jobs and help to facilitate the decongestion at the various ports built initially to handle 60,000 metric tonnes but which are now handling over 100,000 metric tons per annum.
When completed, the port will be able to hold 4 million tonnes of cargo, said the country’s Information Minister, Labaran Maku.
Also, the Nigerian Ports Authority (NPA) is expected to earn over $9.3 billion made up of $2.6 billion from marines’ services and royalty and $6.7 billion from share of profits from the investments, over the 45 years.
Nigeria’s Transportation Minister, Umar, said other economic benefits include the ripple effects of operation of the port from Custom charges and other economic benefits, which will not be less than $379 billion over the period of 45 years.
He also said that the port would automatically revert to the Federal Government at the end of the concession period.
The Lekki Ports LFTZ Enterprise is expected to be completed by 2017. It would operate the seaport for 45 years under the concession agreement dated April 21, 2011.
Nigeria is also in the process of developing additional port infrastructure, particularly the deep sea port in Akwa Ibom State.
