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Friday, May 22, 2015

Lagos in Renewed effort to Woo Investors in N71bn Airport

If feelers from government are anything to go by, Lagos, the nation’s commercial capital will have a second international airport under the four-year watch of in-coming governor Akinwunmi Ambode.

Lagos in renewed effort to woo investors in N71bn airport
The in-coming government and the out-going one being of the same party, are said to have commenced discussions with investors after earlier efforts in the old dispensation in the last few years failed to reach conclusion.

The airport is proposed to be developed on a modular basis at an estimated project cost of N71.64bn ($450 million) in its first phase.

“We’re having discussions with new investors showing interest in the airport project. We’re nearing concluding a fresh deal,” a ranking official of the state government told our correspondent, adding that the state remained focused and determined to deliver on the project. “Government is a continuum and in the case of Lagos, we do not envisage any problem under Ambode”, the source pointed out.

Four rated firms are working with Lagos State as consultants to the airport project. They include Arup, a firm of consultant engineers, designers, planners and technical specialists; Norton Rose Fulbright, a global legal firm with more than 3,800 lawyers across 54 offices worldwide; Stanbic IBTC Capital, a member of Standard Bank Group, one of Africa’s largest banking groups, which was appointed sole financial adviser, as well as Banwo & Ighodalo, a Nigerian-based legal firm.
With the current government set to hand over on May 29, Akinwunmi Ambode, the governor-elect, and his team inheriting project, would be expected double the effort of his predecessor in the pursuit of the realisation of the multi-billion naira infrastructure.

A government official confirmed to BusinessDay yesterday, that the bid to get the airport project off the ground under Fashola slowed down because investors who initially showed interest, developed cold feet and eventually withdrew from the deal, forcing the government to return to the drawing board.

BusinessDay gathered that the investors pulled out from the deal, citing inclement political and social environment- thus forcing the state government and its consultants in the project to begin the search for another set of interested investors.
The airport when completed, would bring to two, the number of international airports in Nigeria’s commercial capital. There is currently one federally owned airport in Lagos- the Murtala Muhammed Airport (MMA), situated in Ikeja, the state capital. It is the most used of all Nigeria’s international airports, but is ageing and industry sources say it needs support, as the population of the state and the volume of commerce have increased exponentially over the years.

Ayo Gbeleyi, the Lagos State commissioner for finance, had told BusinessDay during a pre-bid meeting with representatives of the bidders two years ago, that the new Lekki airport is to be delivered as a Public Private Partnership (PPP) project.

According to Gbeleyi, the state government is providing the land and other complementary infrastructure, while the eventual preferred bidder with whom a concession agreement would be signed, would undertake the construction of the airport on a Design, Build, Finance, Operate and Manage (DBFOM) basis, under a competitive tender process, and in accordance with international best practice.

In 2011, as part of the competitive tender process for the building of the airport, the government, through the consultants, made available Request for Pre-Qualification (RFPQ), with no less than 33 Nigerian and international firms indicating interest to participate in the ambitious project.
The companies had earlier submitted Expression of Interest (EOI), bidding for the project under a Public Private Partnership (PPP) arrangement, following a public notice advertised by the state government to that effect.
Of the 33 firms, 20 were Nigeria- based. They were to compete against 13 foreign companies, including Munich Airport Germany, Hyundai Engineering and Construction Co Limited and Canadian Commercial Corporation, among others.

In 2013, three infrastructure developing consortia of firms, including Bouygues Batiment, Eko Global and Maevis, were again in the race for the first round of bidding for the development of the airport. Local and foreign representatives of the bidders were in the state for the preliminary processes of the bidding and held talks with the government and its team of consultants to the project.

They also visited the site for physical inspection to enable them have a first outlook of the area. The preferred bidder was expected to be announced in April 2014, while the signing of a concession agreement and project documents was to take place in June 2014, with the financial close of deal expected in September same year, but this was never realised.

JOSHUA BASSEY

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