Africa: Lagos yet to find investors for Lekki Int’l Airport 10 years after

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More than one decade after it was proposed and investment prospectus pushed into the global market in search of investment partners, it appears foreign and local investors are yet to be convinced that the $450 million Lekki International Airport in Lagos is worth staking their funds.

Lagos, Nigeria’s economic hub and commercial capital, operates one federally-owned international airport which currently attracts average annual air-passenger traffic of about 9 million from the total average of 15 million travellers across the 31 airports in the country.

There is the general thinking within the aviation industry that the numbers are not attractive enough to spur investors’ interest in the development of a new airport in Lagos given the capital-intensive nature of such a project. This, among other socio-political factors, might be working against the proposed Lekki International Airport, industry experts believe.

The airport was proposed as a Public Private Partnership (PPP) between the state government and would-be investor in which the government would provide the land and other complementary infrastructure while the private partner would construct the airport on a Design, Build, Finance, Operate and Manage (DBFOM) basis under a competitive tender process and in accordance with international best practices.

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It was gathered at the weekend that part of the proposed site of the airport, measuring 3,000 hectares along the Lekki-Epe corridor, is being turned into a dumpsite. There has been a contention between the host community of the proposed airport and the Lagos State government, which was resolved about two years ago, in the hope that it would galvanise investors’ interest in the multi-million dollar project. But this has done little or nothing as investors remain aloof and seem not ready to touch the airport project even with a long spoon.

“We haven’t found an investor for the airport. We’re still searching,” an official of the Lagos State Ministry of Commerce and Industry, who craved anonymity, confided in BusinessDay on Friday.

This is in spite of several trade exhibitions and foreign trips in search of would-be investors embarked upon by officials of the ministry and other relevant state government agencies in the last 10 years.

Olayinka Oladunjoye, state commissioner for Commerce, Industry and Cooperatives, whose ministry has been promoting the airport, would not speak on the project. When contacted via the telephone, Oladunjoye said she was in a meeting.

In a later reply to a text message sent to her cell phone on the current state of the project, however, Oladunjoye referred BusinessDay to another official of the ministry, who was also not available to speak on the matter.

Situated about 10km from Lekki Free Trade Zone (LFTZ), the airport was proposed to cater for the Airbus A380, making it a Code F compliant airport with capacity for 2 million passengers per annum for a start.
Investors banked on to get the project off the ground resented and pulled out of discussions four years ago. Since then, the Lagos State government had been unable to talk new investors into the project.

The airport was proposed to serve the fast-growing residential cum industrial Lekki hub where several multi-billion-dollar investments are springing up, including the LFTZ, Lekki Deep Seaport, Dangote 650,000bpd refinery, among others.

Four rated firms had worked 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, which was appointed sole financial adviser, and Banwo & Ighodalo, a Nigeria-based law firm.

Effort to bring the airport into a reality under Babatunde Fashola, 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.

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 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, 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-hand impression of the site. 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 of the same year, but this was never realised.

Under Governor Akinwunmi Ambode who took over 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.
Although the official said the Ambode-led government never abandoned it, what is now obvious is that the airport project has failed to take off under the outgoing governor.

Source: JOSHUA BASSEY

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