President Directs NPA to Respect FG’s Land Lease Pact with LADOL

Obinna Chima

President Muhammadu Buhari has directed the Nigerian Ports Authority (NPA) to comply with the federal government’s approval of a 25-year lease agreement with the Lagos Deep Offshore Logistics Base (LADOL).

To this end, it is expected that the NPA would restore the land lease agreement with LADOL, which was terminated earlier this year.

The Attorney-General of the Federation and Minister of Justice, Abubakar Malami (SAN), conveyed  the president’s position in a letter titled: “Re: Brief on the LADOL Free Zone Disputes and the Need for the Federal Government to Intervene Urgently,” dated June 3rd, 2020, that was obtained by THISDAY yesterday.

The letter addressed to government agencies read: “I wish to refer to a letter Ref No. PRES/97/HAGF/93 dated 27th May, 2020 from the State House, Abuja and to convey Mr. President’s directive as follows: That NPA complies with Mr. President’s subsisting approval for 25 years lease covering 114,552 hectares granted to Messrs. Global Resources Management Limited (GRML) in 2018.

“That all relevant agencies comply with the legal opinion attached hereto which is geared towards resolving the dispute, restoring investor confidence to the industry and bringing NPA’s actions in conformity with the extant laws and federal government’s policy on local content. Accept the assurance of my warm regards, please.”

The NPA had sanctioned LADOL for allegedly violating the terms of the land lease at Tarkwa Bay, near Light House Beach in Lagos.  The agency revoked the lease via a letter dated November 14, 2019 and addressed to the Managing Director of 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.”

The NPA had alleged 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.

“Consequently, the authority has reviewed the events and decided to exercise its rights under the lease and hereby revokes it with immediate effect,” NPA had stated.

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

The firm was alleged to have collected $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.

Documents exclusively obtained by THISDAY revealed that whereas the NPA charged GRML a rent of $104,821.95 per year for five years on 11.2426 hectares for the head lease, GRML charged the sublease (SHI) $9 million per year for five years for the same portion of land, collecting a total of $45 million.