30 December 2016, Lagos — THE recent proposal by the Managing Director of the Nigeria Ports Authority, NPA, Ms Hadiza Bala Usman to scale down the authority’s $100 million stake in the Lekki deep seaport caused schism amongst stakeholders in the maritime industry.
While some are calling for an increase in the government investment in the project, others are of the opinion that the current equity share-holding should be maintained.
A former Managing Director of the Authority, Engr Omar Suleiman said that the 20 percent stake should be increased as against a reduction in investment.
Suleiman said that there was the need to revisit the country’s current policy on Public Private Partnership, PPP, for the establishment of deep seaports.
He noted that the current arrangement provides that the private sector investor in the deep seaport project provides 60 percent investment equity, while the community represented by the state and the Federal Government provide investment stakes of 20 percent each.
The former NPA boss also said the 20 percent stake from the Federal Government was “too small” considering the enormity of deep seaport projects, where about 50 percent of total cost is taken up by the construction of the breakwater which ought to be done by government and not the private sector investor.
But speaking in Lagos last week, Usman said the 20 percent equity stake which represents about $100million from Federal Government was too high.
She said that given other demand on government fund, there was the need for government to cut down on its 20 percent investment in deep seaports.
However, Suleiman blamed the failure of deep seaport projects on the country’s 60, 20, 20 ownership policy, saying the Federal Government leaves too much for the private sector investor.
He explained that with the private sector investor required to fund breakwater construction which takes up to 50 percent of the total cost of building a deep seaport, not many private investors are willing to take on the challenge, stressing that government should naturally fund construction of the breakwater for deep seaport projects.
He said, “Something that the government should look into is the government policy of PPP for port infrastructure.
“The government policy on PPP is too general.
“The country will need a more specific PPP for the maritime and port building.
“We need a very special form of PPP to cater to maritime infrastructure.
“The major part in building a deep sea port is the construction of the break-water.
“Once the breakwater is done it becomes the key as for the dredging anybody can do that.
“Yes, the government is leaving much to the private sector than they can handle because the Nigerian PPP model is 60, 20, 20 for the private sector, state government and federal government respectively. The total of 40 percent from government cannot do the breakwater and that is why we do not have a deep seaport by now.
Speaking against government investment in the Lekki deep seaport, a former Senior Adviser to former President Goodluck Jonathan, Mr. Leke Oyewole said that the rate of development in the Lekki axis will not make the port viable.
“Where is the road network to carry containers” he queried.
“I am completely against both government investment and the location of the port project, it will further choke the city of Lagos”.
Similarly, a maritime and financial consultant Dr. Chris Asoluka said that if Nigeria must attain the hub status, it must do everything possible to create an enabling infrastructure adding that if the Lekki deep seaport project will create the hub Nigeria earnestly need, then the need to invest in it cannot be over emphasised.
*Godwin Oritse – Vanguard