FG deserves full value from its land at Tarkwa Bay – Bala Usman

The Nigerian Ports Authority (NPA) says the move by its Managing Director, Hadiza Bala Usman, to ensure the federal government gets full value for its land at Tarkwa Bay, Lagos, by sanctioning the Lagos Deep Offshore Logistics Base (LADOL) for allegedly violating the terms of the land leased to it in the area “is not personal but to protect investors’ investments in Nigeria.”

The Authority said that LADOL was profiting from the deal at the expense of the federal government by sub-leasing 11.2 hectares of the total 121 hectares of land that was leased to it without recourse to the NPA.

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Following the discovery of the sub-lease, the NPA had, in a letter dated November 14, 2020 signed by its General Manager, Land and Asset Administration, Yusuf Ahmed, and addressed to the Managing Director of Messrs Global Resources Management Limited (GRML), the parent company of LADOL, revoked the lease agreement on the ground that LADOL was short-changing the federal government and violating the terms of the lease.

NPA’s letter further stated that its investigation revealed that LADOL executed a sub-lease dated September 13, 2013 with Messrs SHI-MCI Fze (representing Samsung Heavy Industries Nigeria) without the required approval or recourse to the lessor.

The letter further read, “Your actions in that regard led to the current impasse, with resultant negative attention within and outside the country. Consequently, the Authority has reviewed the events and decided to exercise its rights under the lease and hereby revokes it with immediate effect.”

The NPA alleged LADOL collected about $45 million (about N16.2 billion) from Samsung Heavy Industries Nigeria Limited (SHIN) for the 11.2426 hectares of land, for which it paid only $524,105 (N37.73 million) to the NPA.

But in a dramatic twist, the federal government upturned the decision in the dispute between the NPA and LADOL Free Zone by fully restoring the 25 years lease agreement it has with LADOL.

A statement signed by the Chairman of LADOL, Ladi Jadesimi, published in national dailies, stated that all stakeholders were advised to comply with the federal government’s final directive, which it said was geared towards resolving the dispute, restoring investor confidence to the industry and bringing NPA’s actions in conformity with extant laws and federal government’s policy on local content.

Jadesimi stated that LADOL received notification that the presidential approval issued in 2018 granting Global Resource Management Limited a 25-year lease covering the entire area of the Free Zone was valid and subsisting.

Top level sources at the NPA in the know of the agreement maintained that the decision of management to wade into the dispute between LADOL and SHIN was not personal but to ensure that the investment of foreign investors in Nigeria was protected.

The sources also said that the federal government deserved to get value from any investment on its land.

Daily Trust learnt that the GRML had applied to the NPA via a letter dated November 22, 2013 expressing its intention to sub-lease the 11.246 hectares to MCI-SHI FZE “for the purpose of expanding facilities at the LADOL offshore support facility in readiness to handle the integration of the Egina FPSO onshore in Nigeria for the Nigerian National Petroleum Corporation (NNPC) and Total Upstream Nigeria.”

The NPA was said to have obliged the application on March 12, 2014 but suspected foul play when the GRML failed to furnish it with the sub-lease agreement between it and SHIN throughout the five-year tenor of the sub-lease.

The sources further claimed that the NPA discovered that during a period of five years, LADOL, through the GRML, charged SHIN $9m as rent per year for the portion of land it was paying only $104,821.95 annually to the ports authority.

“Other available documents also alleged that LADOL, through the GRML, had also entered into another sub-lease agreement with an American company called Africoat Nigeria Limited without any recourse to the NPA, contrary to the provision of the head lease agreement with the NPA.

“Following these infractions, NPA terminated the contract before leasing the 11.24 hectares to SHIN in a fresh agreement of $219,230,700 per year to save SHIN’s fabrication and integration yard for which it borrowed $270m to build.

“Having allocated 11.24 hectares for SHIN, the NPA also granted a fresh lease under new terms to LADOL for 5.7574 hectares of developed land and 69.2874 hectares of undeveloped land for five years, with effect from November 14, 2019.

“LADOL was required to pay N112,269,300 per annum for the developed land and N57,177,000 per annum for the undeveloped land, in addition to Value Added Tax (VAT) of N8,472,315,” sources said.

Madam Usman had, in an interview with Daily Trust, assured that the NPA would protect the investment of foreign investors.

“As regards LADOL, the NPA took certain measures to enable a level playing field and also ensure the protection of investments whereby if an entity invests in a country, the entity is given the relevant protection required so that it can reap the benefits of its investment,” she said.