Lagos Deep Offshore Logistics,( LADOL) Free Trade Zone and Samsung Heavy Industries (SHI) on Wednesday signed a Memorandum of Understanding to resolve a dispute that has lingered for about five years and caused significant economic losses to Nigeria.
The dispute between both parties which began since 2018 bordered around land lease, sub-lease agreement, equity ownership,the development of the Egina Floating, Production, Storage and Offloading (FPSO) project, among others; of which LADOL accused SHI of fraudulent practices and violation of Nigerian local content laws.
As a result, economic activities in the zone stopped, thousands of jobs lost, in addition to revenue loss.
There have since been multiple attempts to resolve the dispute by the Nigerian government.
Adesoji Adesugba Managing Director/CEO NEPZA, speaking in Abuja after the signing of the terms of agreement, disclosed that the dispute locked up investment worth over $7bn, and forced over 3,000 people to lose their jobs.
Adesugba however informed that the settlement has now opened opportunities for about $300 Foreign Direct Investment (FDI) into Nigeria which could generate up to 10,000 jobs in the next few months.
“We were in Seoul and they promised us that if we can resolve this, Nigeria is going to have more companies coming from South Korea to invest in the Nigerian economy.
Read also: Five takeaways from MTN’s investor call
“We are very optimistic that this is going to be a win-win situation for both the investors and Nigeria. We are happy to actualize the President’s directive to arrest this dispute, we are very happy that investment worth this quantum has been unlocked”, Adesugba said.
He assured that NEPZA will continue to monitor SHI and LADOL to ensure that they live up to what they have signed.
Ladi Jadesimi, chairman and founder of the LADOL group, expressed his delight that the dispute has been completely resolved, with hope that a stronger venture would be forged in the interest of the Nigerian economy going forward.
Mohammed Koko, Acting Managing Director, Nigerian Ports Authority (NPA) disclosed that the Authority has also resolved to implement the presidential directive in 2020 for NPA to return the land taken away from LADOL.
“We are happy that this has been resolved today. Both parties have agreed to work together and this will ensure that the confidence of investors is improved in terms of Foreign Direct Investment(FDI),” he enthused.
It would be recalled that the dispute over Land Lease started in 2018 with the NPA’s purported unilateral revocation of the Presidential 25-year lease approval granted to Ladol and replacing it with a Direct Lease in 2019.
The NPA by this action claimed to have taken a portion of land from Ladol and leased it to Samsung. The controversy led to the closure of business activities and halting of economic value chains and other losses that stiffened free flow of revenues to Government and further investments.
In view of the unabated dislocation the dispute had on the country’s industrialization process, another Presidential directive was issued in 2020 to reaffirm the 2018 presidential approval of the land to Ladol.
However, the latest presidential directive was still not implemented by the suspended NPA Managing Director, Hadiza Usman.
As a result, the Minister of Transportation, Rotimi Ameachi waded into the matter by instructing the acting managing director of NPA to ensure the presidential directive as communicated by the Attorney-General of the Federation was implemented without further delay.
It was based on this that the acting managing director engaged parties to the dispute to implement the presidential directive in the interest of the country.
The two other resolved issues hinge on SHI MCI FZE’s sub-lease agreement with a LADOL affiliate, Global Resources Management Limited (GRML) and SHI MCI’s operating licence as a free zone enterprise within the LADOL free zone.
By this settlement, all the cases filed in various courts by the two parties have been withdrawn with the stage set for full scale operation to begin in that business ecosystem.
Terms of settlement were agreed upon in January and both the lease and sublease agreements were formally signed today.
This brings an end to the dispute and implementation of the Presidential directives by NPA.
