19 December
Transaction Advisors appointed
Approval of the Transaction Adviser Halcrow Infrastructure Consortium for the Dagbolu ICD
Transport
Osun
Procurement
Nigerian Shippers' Council
15-11-2023 21:00:52
The worsening plight of Nigerian shippers, especially those in the hinterlands, in the face of perennial port congestion and other infrastructure deficiencies more than ever underscores the urgent need for the optimization of the Inland Container Depot (ICD) facilities. The following factors sum up the reasons for the establishment of Dagbolu ICDs in Osogbo: • Seaport problems culminating in congestion, cargo clearance delays, high demurrage, and sharp practices resulting in shipping businesses costing more • Government policy inconsistency, such as policies on selected banned imported items resulting in port congestion and other allied problems • That Nigeria is a coastal country with large hinterlands and good expanse of inland waterways • Multiplicity of agencies in the port, leading to the tollgate concept and exclusive extortion and corruption. In light of the above, the Osun State Government in collaboration with the Nigerian Shippers’ Council is promoting the development of the Dagbolu ICD in Osogbo for the adequate coverage of the southwest geopolitical zone of the country.
The proposed ICD will have a modular design that consists of a facility with annual capacity of 10,000 TEUs, which can be easily expanded with increasing throughput. The site measures approximately 260 ha and is located in Dagbolu, near Osogbo, the Osun state capital. The project site lies within the immediate vicinity of Osogbo – Ilorin dual carriageway. The site is also on the Osogbo-Ilorin railway track. A dual carriageway is being constructed from the project location to link with the Osogbo-Ilorin dual carriageway. The project location is strategic, as it is located near the Steel Rolling Mill and Machine Tools Ltd. These companies have been privatized and will start producing soon. The ICD will provide a ready avenue for storing products and exportation. The Machine Tools and Steel Rolling Mills are about 1km from the Dagbolu ICD in Osogbo.
The Dagbolu ICD will provide the following services: 1. Cargo handling and processing capacity for 50,000 TEUs per year. 2. Integrating surface transportation of containers in the Southwest region. 3. Cargo consolidation point and customs clearance for cargo originating or destined for the Southwest region. 4. Provision of a comprehensive cargo sorting center. 5. Provision of a temporary cargo storage facility. 6. Cargo and truck management, through installation of appropriate equipment and machinery to receive and dispatch containerized cargo to and from the ICD for onward shipping. The Dagbolu ICD shall put in place the necessary security and safety infrastructure, equipment, and measures to comply with national and international requirements for such a facility.
The BOOT model of concession is considered most suitable for the concession of the Dagbolu ICD in Osogbo for the following reasons: • It is in tandem with the existing policy and legislative framework, which approved concessions as a model for the private sector's involvement in the nation's port sector. • As the landlord, NSC retains the ultimate ownership of the land on which the ICD will be located, but transfers all the financial and operational risks to the concessionaire. • The option will ensure that NSC continues to act as the technical regulator while the concessionaire assumes the responsibility for development of the ICD and it operations. • The private sector is more likely to deliver the project within the prescribed timeline than would the public sector and also the efficiency and organization of the private sector in operating the facility would benefit the project more than if it was operated by the public sector. • In recommending the BOOT option, the need to source private sector financing for the infrastructure development, operation, and maintenance was considered important, likewise the need to allow the private investor recoup its investment over time before the infrastructure is handed back to the NSC. Under this proposed arrangement, the concessionaire will agree to undertake the following: • Develop the proposed ICD facility and its ancillaries. • Assume substantial financial, technical, and operational risks • Receive financial return through payments from operating the facility and other identified and approved sources of revenue over the life of the concession agreement. • Return the infrastructure to the NSC's ownership at the end of the contract. The BOOT concession as proposed is for a period of 25 years, after which responsibility for maintenance and operation shall revert to the government. The concessionaire is expected to recoup its investment, operating, and financing costs and its profit over this period. The BOOT option is guaranteed to introduce private sector efficiencies.
The first stakeholder engagement meeting on the Dagbolu ICD was held on the March 23, 2017. The meeting brought together key stakeholders. A project delivery team has been constituted to ensure that the expectations of the stakeholders are meet. An Evolving Corporate Social Responsibility plan has been put in place, which includes consultation with the host community and local government and ensures provision of identified projects/amenities.
Outline Business Case Compliance Certificate
19 December
Approval of the Transaction Adviser Halcrow Infrastructure Consortium for the Dagbolu ICD
31 July
Development of Dagbolu Inland Container Depot (ICD), Osogbo, Osun State under a PPP
6 September
Project Proposal Screened by the Infrastructure Concession Regulatory Commission
8 November
OBC Compliance Certificate Issued by the Infrastructure Concession Regulatory Commission
ICRC has issued OBC Compliance Certificate for the Dagbolu ICD project
