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FG approves $1.4bn Lekki Seaport, N30bn road contracts

| December 5, 2013 More

The Federal Executive Council on Wednesday approved the development of the Lekki Deep Seaport in Lagos State at an estimated cost of $1.354bn.

The project will be implemented through a Public Private Partnership arrangement.

FEC also proved a total of N30bn for 12 road projects across the country.

Minister of Information, Mr. Labaran Maku; Minister of Transport, Senator Idris Umar; and Minister of State, Works, Ambassador Bashir Yuguda, briefed State House correspondents of the outcome of the meeting, presided over by Vice President Namadi Sambo.

President Goodluck Jonathan flew to Germany Tuesday on a private visit en-route Paris, France, where he was scheduled to participate in the Summit on Peace and Security in Africa.

Umar said Messrs Lekki Ports LFTZ Enterprise, which he said had four years to complete the project, would operate the seaport for 45 years under the concession agreement dated April 21, 2011.

The Lekki Deep Seaport is expected to be Nigeria’s first deep seaport since independence and it is also expected to end congestion at the Apapa Port.

The minister said $800m out of the project cost would be funded through debt financing while the balance of $554.5m would be contributed by equity.

He listed the equities in the seaport to include 20 per cent for the Federal Government; 18.5 per cent for Lagos State Government; and 61.85 per cent for the private firm.

He said the port would automatically revert to the Federal Government at the end of the concession period.

He said, “The economic benefits of the port to the country need not to be over emphasised. Not less than $9.3bn will accrue to Nigeria Ports Authority, made up of $2.6bn from marine services and royalties and then $6.7bn share of profits from the investments.

“Other benefits include the ripple effects of operation of the port from Custom charges and other economic benefits, which will not be less than $379bn over the period of 45 years.

“The ports will create jobs not less than 162,000 and will help in facilitating the decongestion of existing ports, particularly in Lagos and indeed safe our road infrastructure. It will also occasion a lot of savings on demurrage on importers because of the cost reduction there from.

“It is therefore of immense benefit to this country because as at today our ports are overstretched particularly the Lagos Port with an installed capacity of 60 million metric tons per annum but today is forced to handle over 100 million metric tons per annum.

“That therefore underscores the need for us to have this deep sea port. While this is being done, we are processing the development of additional ports, particularly the deep sea port in Akwa Ibom State.”

Umar added that the 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.

Yuguda said the Federal Government approved the contracts for the 12 roads across the country as parts of its resolve to fast track infrastructural development.

The projects, approved under three memoranda, had nine of the road contracts gulping N15.7bn; two others gulping N5.6bn; and one, the construction of Bida-Sacci-Nupeko Road in Niger State, gulping N8.673bn.

The two contracts that will gulp N5.6bn are the construction of Benin/Adumagbae-Egba-Akure Road in Edo/Ondo states: N3.287bn and the reconstruction of Nung Udoe-Etinan-Ekom-Iman Road in Akwa Ibom State in the sum of N2.383bn.

The nine projects that the government committed N15.7bn to are the construction of Kankara-Gurbi Road in Katsina State -N1.4bn; Isoko Ring Road in Delta State-N2.1bn; construction/rehabilitation of Yashi-Duguri-Yalo Road (Duguri-Dungare-Yalo Section) in Bauchi State-N1.75bn; Jarmai-Bashar Road in Plateau State : N1.38bn and rehabilitation of Wukari/Akwana Road in Taraba State-N3.97bn.

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