Lekki FTZ Suffers Setback as Foreign Partner Dumps Port Project

The low price of oil that led the Nigerian economy into its first recession in decades, has also resulted in the cancellation a concession agreement for the operation of the ultra-modern port, to be built in the Lekki Free Trade Zone

International Container Terminal Services, Inc. (ICTSI) announced, on Monday, it has pulled out of the agreement to operate what was slated to become one of the largest container terminals in sub-Saharan Africa.

The Manila-based company said its local subsidiary, Lekki International Container Terminal Services LFTZ Enterprise (LICTSE), terminated a concession agreement with the Lekki Port LFTZ Enterprise (LPLE) by mutual consent, owing to delays in the execution of the project at Lekki Port.

ICTSI is believed to have received some compensation over the failure of the project, but the amount was not dislosed.

“The parties arrived at the decision following delays in the completion of the Lekki Port Project,” ICTSI said in a disclosure to the Philippines Stock Exchange.
ICTSI said LICTSE and LPLE have mutually agreed to terminate their Sub-concession Agreement dated August 10, 2012, subject to a payment of an agreed amount to LICTSE.

The Agreement granted LICTSE, as a sub-concessionaire, an exclusive right to develop and operate, and to provide handling equipment and container terminal services, at the container terminal within Lekki Port located at Ibeju Lekki, Lagos, for a period of 21 years.

“The termination of the Sub-concession Agreement has been finalised and is deemed effective May 24, 2017,” said ICTSI.

ICTSI had signed the agreement in 2012 and had committed to invest $225 million for cargo handling equipment and related IT infrastructure after it got a sub-concession to develop and operate the deep water port in Nigeria.

The port was envisioned to emerge as the new container hub for the West Africa range. ICTSI said then that the advantageous location combined with state-of-the-art facilities serving clients with 14 Post-Panamax cranes and a draft allowing vessels of 10,000 TEU to call at the terminal will enable the port to establish itself as the preferred destination in the region.

With a quay of 1200m, this modern facility, which was expected to be fully operational in 2016, will have an annual capacity of 2.5 million TEU, making it the largest single terminal in Sub-Saharan Africa.

The port was to be built over 90 hectares of land in the heart of the Lagos Free Trade Zone, just 65 km east of Lagos.

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