Selection of Preferred Bidder
on the 15th june lessee submitted
Nigerian Ports Authority
The terminal was concessioned to ensure increased efficiency of port operations, decrease the cost of port services to port users, and boost economic activities and accelerate development, among others. It is expected that the concession will bring about improvements to the leased properties, as further described in the development plan handed over to the terminal operators during contract execution.
Real property in the Delta Port and certain immovable property affixed to the premises, and making certain improvements to the lease property.
Handling and delivery services for cargo, including without limitation stevedoring, loading and unloading of vessels, transporting, sorting, and storage of cargoes at the port terminal.
A landlord model was selected to ensure that the government retains the right to supervise daily operations at the ports. The model prescribes certain obligations that must be carried out by the lessor, such as maintenance, repairs, renewals, and replacements of the quay wall and navigational aids on the premises during the concession time. The lessor is also expected to provide certain utilities and facilities to enhance port operations. Such utilities/facilities include electricity power, water supply, tug boats, and repairs and maintenance of access/common user roads.
Done in 2005 before the port concessions. Over time, the Infrastructure Concession Regulatory Commission has also made efforts to meet with stakeholders to the ports during its periodic monitoring visits. These stakeholders include public sector officials, National Assembly members, terminal operators, and port users.
SUMMARY OF STAKEHOLDER ENGAGEMENT ON THE REVIEW OF PORT CONCESSION CONTRACTS
The Commission in May, 2015 recommended the review of the port concession contracts signed by the Nigerian Ports Authority (NPA) in 2005/2006 with Port Terminal Operators in Apapa, Tin-Can Island (Western Ports), Onne, Port-Harcourt, Warri and Calabar Ports (Eastern Ports). The NPA on 2nd March, 2017 informed the Commission that it has initiated the review of the port concession contracts with terminal operators.
The Nigerian Ports Authority set up an Inter- Agency Committee which was inaugurated on 16th May, 2017 following mutual agreement by the parties to review the contracts with the aim of improving on the Management of the port terminals.
The ICRC was nominated as a member of the Committee among other stakeholders (The Federal Ministry of Justice, Bureau of Public Enterprises (BPE) and Federal Ministry of Transportation). Several meetings and interactive sessions were held by the Committee to review the contacts under three thematic areas of – Legal Issues, Administrative Issues and Operational Issues in the contract. The Committee visited all the port terminals in the Eastern and Western parts of the country between 12TH – 15TH December 2017 to carry out an on-the-spot assessment of the terminals and engaged with the operators on the contract review.
The Committee received technical support from the World Bank through its Consultants - (MBTS) which assisted the Inter-Agency Committee on the review exercise.
The parties met and negotiated the contract clauses reviewed and other essential issues which were considered during the review exercise. A draft supplemental agreement was prepared by NPA and sent to the Federal Ministry of Justice and the ICRC for review. The ICRC concluded its review of the supplemental contracts in May, 2020 and forwarded its views to NPA for consideration. Some of the issues considered during the review exercise were:
One-pager prepared by the ICRC, attached.
on the 15th june lessee submitted
Execution of the Concession Agreement
Commencement of operation after fulfilling initial financial obligations
Expiry of contract agreement
Redacted PPP Contract attached
|Type of risk||Description||Allocation||Mitigation|
|Pre-construction risk||Risk associated with project preparation/Permit and approval risk||Public Sector|
|Construction / Completion||Construction and Renovation of Terminal structures||Private Sector||periodical review of project implementation schedule|
|Cost risk||Cost Overrun||Private Sector|
|Refinancing risk||Financial Close/Debt servicing/interest repayment||Private Sector|
|Risk related to change in law, taxes, scope, technical standards, regulatory framework||Project scope, laws, environment, government policies||Public Sector|
|Exchange rate risk||Fluctuation in country's exchange rate/devaluation/global impact||Public and Private Sectors|
|Operating risk||Competition, workers action, etc||Private Sector|
Throughput fee at break bulk/multipurpose terminals 2016/2017
Throughput fee rate at Oil and Gas Related Terminals 2016/2017
|Events of Default||Brief description||Termination Payments||Documents|
|Insolvency||Immediate termination notice||Pay to the Lessor any and all actual costs, expenses, charges, and/or penalties incurred or sustained by the Lessor as a consequence of such termination|
|Performance Failure||Fails to perform the Operations for 14 consecutive days in an operating year or 60 non consecutive days in a non operating year.||Pay to the Lessor any and all actual costs, expenses, charges, and/or penalties incurred or sustained by the Lessor as a consequence of such termination|
|Events of Default||Brief description of events of default||Termination Payments||Documents|
|Government Action||Lease property (in whole or in part) is expropriated compulsorily acquired or nationalized by a Government Agency.||Pay to the Lessee any and all actual costs, expenses, charges, and/or penalties incurred or sustained by the Lessee as a consequence of such termination|
|Government Action||Lessor event of default in the first perating year||Refund of commencement fee, all construction/develoment cost incurred by Lessee|
|Performance Failure 1|
|Category of failure||Financial objectives|
|Number of events||1|
|Penalty or abatement provided in contract||Lessee guarantees to handle at least ninety per cent (90%) of projected cargo throughput as provided in its technical proposal|
|Penalty or abatement imposed||If Lessee fails to achieve at least ninety per cent (90%) of such throughput, the Lessee shall pay the Lessor the throughput fees of the difference between the throughput handled and the guaranteed volume of ninety per cent (90%).|
|Penalty paid or abatement effected||Yes|