Investors elude $450 mllion Lagos Lekki International Airport (Nigeria)

By Joshua Bassey | BusinessDay, Nigeria March 3, 2016

Efforts to secure investors for the construction and management of the proposed $450million Lekki international airport, near Epe, in Lagos, are not producing the desired results, several years after the project was mooted and site earmarked.

BusinessDay findings show that 3,000 hectares of land on the Lekki-Epe corridor, once cleared in anticipation of the take-off of the first phase of the airport, is now back to thick bush. Situated about 10km from Lekki Free Trade Zone (LFTZ), the airport was designed to cater for wide-body, double-deck, four engine aircraft which have capacity for up to 500 seats, such as the Airbus A380 making it a Code F compliant airport with capacity for two million passengers per annum for a start.   

Investors banked on to get the project off the ground rescinded and pulled out of the discussions three years ago. Since then, the Lagos State Government had been unable to talk new investors into the project in spite of several foreign trips and trade exhibitions embarked on by the previous government.

If it comes to being, the airport will lessen pressure on the poorly ageing federally-owned Murtala Muhammed International Airport (MMIA) in Ikeja, and serve the fast growing residential cum industrial Lekki hub, where several multi-billion dollar investments are springing up, including the LFTZ, Lekki Deep Seaport and Dangote 650,000bpd refinery, among others.

Four rated firms had been working with Lagos State as consultants on the airport project. They include Arup, a firm of consultant engineers, designers, planners and technical specialists; Norton Rose Fulbright, a global legal firm with 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, and Banwo & Ighodalo, a Nigerian based law firm.

Efforts to bring the airport to reality under Babatunde Fashola, the immediate past governor of Lagos, suffered a setback because investors who initially expressed interest withdrew from the deal, forcing the government to return to the drawing board.

It was gathered that the investors pulled out from the project citing inclement political and social environment- thus forcing the state government and its consultants to launch a fresh search for another set of investors.

Sola Oworu, the immediate past commissioner for Commerce and Industry in Lagos, said the Lekki airport is proposed as a Public Private Partnership (PPP) project.

Ayo Gbeleyi, a former commissioner for finance under Fashola, said the state government would be 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 practices.

  In 2011, as part of the competitive tender process for the construction of the airport, the Lagos State Government, through its consultants, advertised a Request for Pre-Qualification (RFPQ) and 33 Nigerian and international firms indicated 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. 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.

  With the hand over to Governor Akinwunmi Ambode on May 29, 2015, it was expected that the new government would re-double effort in the pursuit of the realisation of the multi-billion naira infrastructure.

An official of the ministry of commerce, industry and cooperatives, who preferred anonymity, told BusinessDay that the Ambode led government has not abandoned the airport project. “The government is working to secure investors,” the official said. However, Rotimi Ogunleye, the commissioner in charge of the ministry would not speak on the project.

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