Why NPA revoked LADOL’s land lease agreement

By Richard Adeniyi

 

Sources at the Nigerian Ports Authority (NPA) have indicated that the it revoked the land lease agreement signed with the Lagos Deep Offshore Logistics Base (LADOL) because LADOL 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 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 it.

“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.

NPA had also said LADOL short-changed the federal government by subleasing about 11.2 hectares or less than 10 percent of the total land area at a whopping $45 million (N16.2billion), whereas it paid government only $524,105 (N188.6 million) for the entire 121 hectares.

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 in 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.

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.

Because of the failure of LADOL to adhere strictly to its agreement with the government the NPA revoked LADOL’s land lease agreement

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