NPA revokes LADOL’s Land Lease Agreement over infraction

Posted by News Express | 9 February 2020 | 1,056 times

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The Nigerian Ports Authority (NPA) has sanctioned the Lagos Deep Offshore Logistics Base (LADOL) for violating the terms of the land lease at Tarkwa Bay, near Light House Beach in Lagos.

This, it claimed, was part of the efforts to boost accountability and ensure transparency which the fulcrum of President Muhammadu Buhari’s administration, as well as boost the confidence of local and foreign investors in Nigeria’s operating environment.

LADOL, it was learnt, was profiting at the expense of the federal government by subleasing 11.2426 hectares of land out of the total 121 hectares leased to it at outrageous amount of money without recourse to NPA.

The firm was alleged to having collected $45 million (N16.2billion) 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 NPA.

Documents exclusively obtained by THISDAY revealed that whereas the NPA charged GRML a rent of $104,821.95 per year for five years on 11.2426 hectare for the head lease, GRML charged the sublease (SHI) $9 million per year for five years for the same portion of land, collecting a total of $45 million.

When contacted, LADOL’s Public Relations Officer, Mr. Kunle Kalejaiye, said he was not authorised to speak on the matter which he said is currently in court.

The documents showed that GRML was on January 1, 2003, initially granted a 21-year lease over 80 hectares of land at Takwa Bay by the NPA. Another lease of an adjoining 34 hectares was subsequently granted, bringing the lease area to 114 hectares.

From the recent survey, THISDAY gathered that the total lease area is now 121 hectares.

In a letter dated November 22, 2013, GRML applied to NPA to sublease 11.246 hectares out of the 121 hectares (nine per cent) to MCI-SHI FZE for the purpose of expanding facilities at 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 letter also stated that expanding the facility would generate 55,000 jobs within and outside LADOL, save billions of dollars from being spent outside Nigeria and make the country the West Africa hub for oil and gas engineering.

In consideration of the huge investment that was to be made by SHIN, GRML, in the letter pleaded with the NPA to consider and approve the sublease expeditiously so that SHIN would not cancel the project and use its existing facility in Goje, South Korea for the entire Egina project.

The NPA obliged in a letter dated March 12, 2014 and a conditional approval for the sublease was conveyed.

Competent sources at the NPA however told THISDAY that the NPA suspected fowl play when GRML failed to furnish it with the sublease agreement between it and SHIN throughout the tenor of the sublease, so as to conceal the actual amount it collected from SHIN.

The sources told THISDAY that LADOL eventually furnished NPA with the sublease agreement only in August 2019 following a highly toned letter from the NPA, dated June 18, 2019.

THISDAY also gathered that another sublease agreement between the parties, which was dated September 13, 2013, was terminated, because NPA’s approval was not sought as provided in the head lease agreement.

Apart from allegedly profiting at the expense of the federal government by collecting outrageous amount from SHIN and paying far less to the NPA, documents also showed that LADOL, through GRML had also entered into another sublease 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 NPA.

A letter to the Managing Director of the NPA by the General Manager, Land and Assets Administration, dated November 14, 2019, notified the NPA boss that there was evidence to show that GRML granted at least a sublease to SHI-MCI in September 13, 2013 without any recourse whatsoever to the NPA.

The letter also stated that there was no justification whatsoever for GRML to charge the sublease an astronomical $9 million per year over the subleased area for which it paid a rent of only $104,821.95 per year to the NPA, thus profiting at the expense of the Federal Government.

NPA’s action, it was gathered, was to save SHIN’s fabrication and integration yard for which it borrowed $270 million to build and restore investors’ confidence that had been badly shaken by the attempt to push it out of the facility it built after investing such a huge amount on the said facility.

Some stakeholders have however hailed the NPA for its bold decision, describing it as reassuring at a time investors were skipping the country for other destinations on the African continent.

Based on the alleged infractions committed by LADOL, the letter advised the NPA boss to terminate LADOL’s land lease at Tarkwa Bay, near Light House Beach, Lagos for violating the terms of the agreement.

Following this recommendation, the NPA revoked the land lease agreement with GRML in a letter dated November 14, 2019 and granted it a fresh lease under new terms, which excludes the 11.2426 hectares that constitute the premises of the fabrication and integration yard.

Also, the NPA in a bid to restore investors’ confidence in the country leased the 11.2426 hectares that constitute the premises of the fabrication and integration yard to SHIN at N219,700.00 per year. (THISDAY)


Source: News Express

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