DP World in discussions for multibillion-dollar Lagos development

 

Dubai-based global port and freezone operator DP World is in discussions with the Nigerian Ports Authority (NPA) for a multibillion-dollar port infrastructure development close to Lagos.

 

The NPA said in a statement the project would involve greenfield and brownfield container and bulk terminals.

 

“The plan is to develop a DP World Terminal in the Lagos area and a suitable site is currently being sought,” the NPA said.

 

The statement was issued in response to criticism of the NPA after International Container Terminal Services (ICTSI) of the Philippines pulled out of a major development project at Lekki Port, 65 km east of Lagos.

 

Local media reported the Committee of Maritime Professionals (CMP) as saying the “hard-line posture” of NPA managing director Hadiza Bala-Usman was frustrating potential investors in the Nigerian maritime sector.

 

The NPA rejected the criticism and said it would continue to do business with “concessionaires and collaborators whose ethics respect the principles of shared prosperity”.

 

The authority said it recently concluded the sale of its remaining equity in Lekki Deep Sea Port to China Harbor Engineering Company for USD86 million, and that it was also in discussions with Morocco’s Tanger Med Port for the building of a greenfield terminal, logistics base, and warehouse in Nigeria.

Manila-based ICTSI announced recently that its local subsidiary, Lekki International Container Terminal Services (LICTSE), terminated a concession agreement with NPA by mutual consent because of delays in the execution of the project at Lekki Port.

 

The agreement, signed in August of 2012, had given LICTSE the right to develop and operate the terminal at the port for 21 years.  The terminal was originally due to start operating in 2016.

With a design capacity of 2.5 million teu, it would have been one of the largest container terminals in sub-Saharan Africa.

 

Corruption in the ports system is considered the main factor in making Nigeria’s ports among the most expensive in the world, while at the same time undermining the significant growth potential of the trade economy.  

 

Illegal payments account for more than half the cost of import and export processes through ports, and delays account for up to 70% of the time required to conduct those processes.

 

Under the leadership of Hadiza Bala-Usman, the NPA is implementing a series of reforms and modernisations to eliminate corruption.

 

An order was issued last week banning all non-approved government agencies from operating at seaports in the country.

 

The operation of multiple, non-approved government agencies within the port resulted in clashes of interest, touting, bribery, and corruption, Usman said.

 

“Other agencies that are not on the [approved] list cannot operate inside the ports, but can base their operations outside and interact with the approved agencies. These agencies are aware that they had always been operating at the ports without the necessary approvals.”

 

A port community system is also being developed to allow supply chain stakeholders to interact with agencies and reduce touchpoints that encourage corruption. 

 

Contact Turloch Mooney at turloch.mooney@ihs.com and follow him on Twitter: @TurlochMooney

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