• Wednesday, June 12, 2024
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Technology will drive efficient cargo processing at Lekki Port – Ruogang

Lekki Port, CMA CGM Group move to grow Nigeria’s trade, GDP

Du Ruogang is the managing director/CEO of Lekki Port, Nigeria’s first deep seaport that is expected to begin operations by the last quarter of this year. In this interview with Amaka Anagor-Ewuzie, he gave an update on construction works as well as the preparation for the port to begin operations. Excerpts:

The Lekki Port is scheduled for delivery in the third quarter of this year; how ready are you to meet this timeline?

At present, dredging and reclamation works have reached 90.93 percent. The construction of the quay wall, breakwater, and landside infrastructure has reached 87.3 percent, 82.74 percent, and 70.01 percent completion, respectively. In total, the construction of the port is about 81.14 percent completed.

All stakeholders are playing their part to ensure that the construction of the port is completed and the port is ready for operations even ahead of schedule.

As Managing Director, I have enjoyed the full support of the promoters & shareholders. China Harbour and Tolaram have been instrumental in getting the project from the development stage to the construction stage.

Also, the Lagos State Government and the Federal Government (through the Federal Ministry of Transportation as well as the Nigerian Ports Authority) have been encouraging and showing strong support.

Thanks to all of their attention to this project, construction work was not negatively affected during the lockdown that was caused by the COVID-19 pandemic. The EPC contractor, China Harbour Engineering LFZ Enterprise must be commended for ensuring that despite all the challenges of getting technicians, equipment, and materials across to the site, they kept meeting the milestone achievements.

The Port is located within the Lagos Free Zone, so port users or investors would be able to access the benefits attached to operating within a free zone under the NEPZA regime

We are also looking ahead with regards to operational readiness and the whole Operations Department of Lekki Port is collaborating with Lekki Freeport Terminal, the company that will operate the container terminal.

We are also liaising with regulatory agencies like the Nigeria Customs Service, Nigerian Immigration Service, the National Drug Law Enforcement Agency, the Nigerian Police Force, and others. We are determined to get things right from the very beginning.

Many have waited for years for Lekki Port to commence operations. How prepared are you to receive vessels and cargoes?

We appreciate the patience of Nigerians and I am happy to say that the wait has not been in vain, and Nigerians will soon begin to enjoy a modern port. Currently, the necessary landside infrastructure is almost complete.

We are equally working to ensure the integration of our processes with technology so that all interactions at the port are efficient. Also, the NPA will be providing the marine services necessary to receive vessels, and they are also preparing by getting tug boats and navigation aids among others.

In specific terms, tell us the economic impact the completion of Lekki Port and subsequent commencement of operations would have on the Nigerian economy?

The economic impact of this project is quite enormous. Once completed, the project will further boost the economic activities within Ibeju Lekki, Lagos State, and all of Nigeria. Studies project that the port will create about 170,000 direct and indirect jobs from port operations.

Other ancillary services would also provide job opportunities. The port will also generate approximately $201 billion in revenue from taxes, royalties in local and foreign currency duties. Also, over the term of the concession, there will be a direct and induced business revenue impact of $158 billion as well as a qualitative impact on the manufacturing, trade, and commercial services sector.

In summary, Lekki Port will have an aggregate impact of approximately $361 billion on the Nigerian economy. You can see that this will have a multiplier effect, thus helping to boost the Gross Domestic Product.

Lekki Port is coming when port users are already used to existing Apapa and Tin-Can Ports, your direct competitors. What are you going to do differently to attract businesses and sustain patronage?

Lekki Port is unique and intentionally so from when it was conceived. The port was designed and developed with this objective.

Currently, the construction is being handled by CHELE, a subsidiary of China Harbour Engineering Company, one of the best marine contractors worldwide. In addition, we have Louis Berger as part of the WSP Group, one of the largest multi-disciplinary infrastructure consulting firms in the world that are project management consultants.

In terms of marine infrastructure, we are aiming for global standards which put Lekki Port far ahead of the existing ports. In just phase 1, we will have a 1.5 metre quay at a water depth of 16.5 metres, which is unprecedented in these climes.

The port will also be equipped with Rubber Tyre Gantry (RTGs) and Ship-to-Shore (STS) cranes which will make port operations efficient.

There will be in-built technology that allows for screening and processing which will promote the efficient movement of goods within 48 hours. In addition, the Port is located within the Lagos Free Zone, so port users or investors would be able to access the benefits attached to operating within a free zone under the NEPZA regime.

We are aware that Lekki Port LFTZ Enterprise is developing Lekki Port in partnership with the Lagos State Government and the Nigerian Ports Authority; how much support are you receiving from both stakeholders to ensure the required infrastructure is incorporated into the port?

The Lekki Port project has been identified as a game-changer by both Lagos State Government and the Federal Government, so both tiers of government have been fully involved in our efforts to develop the project and as we prepare for the start of port operations later this year.

The Board of Directors including the chairman, Biodun Dabiri, Alhaji Oyedele, and others have been very supportive in guiding the management team. Governor Sanwo-Olu of Lagos State has visited the port site personally and has promised us that the road infrastructure will be enhanced before the start of operations.

The Minister of Transportation visits the site every quarter on inspection and he is full of suggestions on how we can speed things. Together with the Managing Director of the NPA, he has assisted with solving some of our challenges.

Governor Sanwo-Olu has helped us during the lockdown to get approvals for technical workers and the management team to come to Nigeria when there were travel restrictions.

So, all hands are on deck and we have free access to the stakeholders at the highest level, which has been of immense benefit and we appreciate all the support.

The global economy has been facing severe push backs since the outbreak of Covid-19 to the extent that Nigeria is now faced with record-high inflation. How has this affected the Lekki Port project and its funding?

We were very fortunate because a lot of the negotiations and arrangements for the funding had been done way before the pandemic started. For instance, the Facility Agreements with China Development Bank for the $629 million loan were signed in October 2019.

Also, the shareholding agreement between China Harbour and Tolaram was already in place. So, despite the pandemic, all relevant parties were able to work virtually from all the different countries to put the finishing touches in place for the financing, and in March 2020, China Harbour made a cash injection of $221 million for its equity.

About a year afterward, in April 2021, the first drawdown on the loan from China Development Bank happened smoothly.

2023 is expected to be the first year of operation; what is your projection in terms of the volume of cargo?

I must state that it would be difficult to ascertain the exact figures of cargoes that would move in and out of Lekki Port. But I am confident that Lekki Port will receive no fewer than 2million TEUs of container traffic in the next year. As we go on, this would increase because it is projected that 5.5million TEUs of container traffic would have berthed at the Port by 2025.

Are there other challenges limiting the port project or envisaged future challenges when operations begin?

In May 2021, the Managing Director of the NPA set up a committee to oversee the preparations for the take-off of Lekki Port, and together we are addressing issues as they occur with support from our Board of Directors, Lagos State Government, and the Federal Ministry of Transportation.

A project of this magnitude and significance will surely have a lot of challenges to be surmounted but we are working with our stakeholders to address everything in time for the start of operations.

The Lekki Port project represents a unified approach to investment in infrastructure in Nigeria. As a public-private partnership initiative being developed on a non-recourse project finance basis, it illustrates a high level of interconnectedness which is the growing trend of global collaboration.