‘Why NPA Revoked LADOL’s Land Lease Agreement’

0

By Eromosele Abiodun

Fresh facts have emerged that the Nigerian Ports Authority (NPA) revoked the land lease agreement signed with the Lagos Deep Offshore Logistics Base (LADOL) because LADOL shortchanged the federal government and also violated the terms of the land lease at Tarkwa Bay, near Light House Beach in Lagos.

The NPA revoked the lease via a letter dated November 14, 2019 and addressed to the Managing Director of Messrs Global Resources Management Limited (GRML), the parent company of LADOL.

The letter, signed by NPA’s General Manager in charge of Land and Asset Administration, Mr. Yusuf Ahmed, had reminded LADOL that, “Clause 4.5 (a) of the agreement prohibits the lessee (LADOL) from subletting any part of the premises without written approval of the lessor (NPA) and stipulates that any contravention ‘shall result in the automatic cancellation of this lease.”

NPA noted that its investigation revealed that LADOL executed a sublease dated September 13, 2013 with Messrs SHI-MCI Fze (representing Samsung Heavy Industries Nigeria) without the required approval or recourse to the Lessor.

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

LADOL also shortchanged the federal government by sub-leasing 11.2426 hectares of land out of the total 121 hectares leased to it at outrageous amount of money without recourse to NPA.

In other words, LADOL was alleged to have collected a whopping $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.
In a letter dated November 22, 2013, GRML applied to NPA to sublease the 11.246 hectares 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.”

However, while NPA obliged on March 12, 2014, it suspected foul play when GRML failed to furnish it with the sublease agreement between it and SHIN throughout the five-year tenor of the sublease, so as to conceal the actual amount it collected from SHIN.
During a period of five years, LADOL through GRML, charged SHIN $9 million as rent per year for the portion of land which it was paying $104,821.95 annually to the ports authority.

Apart from 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 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 NPA.
Following these infractions, NPA terminated the contract before leasing the 11.24 hectares to SHIN in a fresh agreement of $219, 230, 700.00 per year to save SHIN’s fabrication and integration yard for which it borrowed $270 million to build.
Having allocated 11.24 hectares for SHIN, 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 VAT of N8,472,315.