• Thursday, July 18, 2024
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Explainer: How Lekki Port and Second Niger Bridge were financed

Obi of Onitsha denies altercation with OBJ over 2nd Niger Bridge

The Second Niger Bridge and the Lekki Deep Seaport are two massive infrastructural projects in Nigeria that have gathered momentum in recent times as both are expected to be completed before the end of the year.

The Second Niger Bridge project includes the construction of a 1.6-kilometre-long bridge, a 10.3km highway, Owerri interchange, and a toll station. It will connect Asaba and Onitsha, and would help to improve collaboration between the South-South and South-East.

When completed, the Second Niger Bridge would ease the misery faced by travellers moving to and from the South-eastern region of the country, particularly from the South-West and South-South.

The bridge is a key national infrastructure with immense socio-economic benefits for the contiguous states and indeed the entire nation.

Upon completion, the bridge will ease traffic flow, improve road safety, and create greater opportunities for local residents by advancing the commercial viability of the immediate area and regenerating economic life.

The project was awarded in 2014 by the Federal Government through the Federal Ministry of Works and Housing, in collaboration with the Nigerian Sovereign Investment Authority (NSIA), to Julius Berger under the administration of President Goodluck Jonathan.

After the ground-breaking of the bridge in 2014, the project was to be built via a Design, Build, Finance, Operate, and Transfer Model. To actualise this, the Federal Government engaged the consortium of Messrs Julius Berger-NSIA (NSIA via NSIA Motorways Investment Company) to execute the project.

Giving insight into the trajectory of the Second Niger Bridge project, Kalu Aja, a financial planner, said on his Twitter handle @FinPlanKaluAja1 that the claim that the bridge was solely built by the Presidential Infrastructure Development Fund (PIDF) was a lie.

According to Aja, the Federal Government, in July 2014, signed an indemnity agreement with Julius Berger and NSIA at a projected cost of N117.9 billion with Value Added Tax amounting to $700 million @ N154 per dollar.

At that time, NSIA spent $2.21 million at N154 per dollar on consultancy.

“In August 2015, a total of $91.35 million of the sum of $149.75 million pledged by the Federal Government was released. This shows that as of January 2015, the Federal Government had paid N18.3 billion on the project for early construction,” Aja said on Twitter.

Before the end of Jonathan’s administration, the project had recorded some major milestones, including the signing of the early work 11 contract and deed of the undertaking, on-boarding of advisers (financial, legal, and technical), completion of the Environmental and Social Impact Assessment report and commencement of construction.

Then, the government committed N10 billion of its expected N30 billion contribution to the project, the NSIA said in its 2014 annual report.

This was also confirmed by Jonathan in Onitsha during a courtesy call on Alfred Nnaemeka Achebe, the Obi of Onitsha, during the presidential campaign rally in Onitsha ahead of the 2015 general elections.

“The total value of that project is N130 billion and is being done through the Public Private Partnership and managed by our Sovereign Wealth Fund. So far, N10 billion has been spent, and out of it, N1.5 billion was used for paying for damages and others. In fact, the link road that is about three kilometres from the main road to the bridge, almost 80 percent of the road has been fixed,” Jonathan said at the time.

Meanwhile, the Federal Government under President Muhammadu Buhari cancelled the contract in 2016. Then, the project was halted for review by the Infrastructure Concession Regulatory Commission.

Read also: Second Niger Bridge gulps N157bn

To resume work on the project site, the Buhari government created the Presidential Infrastructure Development Fund in 2018 and issued a new contract to Julius Berger.

Julius Berger has been piloting the project, which the government has promised to deliver before the end of this administration.

On the other hand, Lekki Deep Seaport is a port infrastructure built with modern equipment, and it is expected to take pressure off the two major ports in Lagos, Apapa and Tin-Can Ports, after completion.

Built under the public-private partnership initiative, the port was built by a shareholding structure where the International Consortium led by Lekki Port Investment Holding Inc. holds a 75 percent stake.

Here, China Harbour Engineering Company Ltd. holds a 52.50 percent stake while Tolaram Group holds a 22.50 percent stake, amounting to a 75 percent share.

Other shareholders in the Lekki Port project include the Lagos State Government, which holds the 20 percent stake, leaving the third shareholder, the Nigerian Ports Authority (NPA), to hold the remaining 5 percent.

On April 21, 2011, Lekki Port LFTZ Enterprise Limited (LPLEL) entered into a concession agreement with NPA for the rights to build and operate a deep seaport in Ibeju Lekki, Nigeria. This concession was granted under the Nigerian Ports Authority Act 2004, which forms the legal and regulatory basis for the construction and operation of Lekki Port.

LPLEL was awarded the concession for 45 years by the NPA on a Build, Own, Operate and Transfer basis. Under this agreement, LPLEL is required to develop, finance, build, operate, and at the end of the concession term, transfer the port to NPA.

LPLEL will earn revenues through the operations of the port. It has ultimate responsibility under the concession agreement to manage the interfaces between NPA, the Lekki Port operations manager, and the three terminal operators.

Upon completion, Lekki Port, which has a draft capacity of 16.5 percent that can receive post-panama vessels, will have a total of three container berths, one dry bulk berth, and three liquid berths.