Many Logistics Challenges With Lekki Deep Seaport, Dangote Refinery

Many Logistics Challenges With Lekki Deep Seaport, Dangote Refinery
By Yusuf Odejobi

As the commencement of operations at the Lekki deep seaport draws nearer, the fact that the $1.6 billion deep seaport project in the Free Trade Zone is  without plans for an intermodal transport system necessary for seamless cargo evacuation remains a source of concern for the port stakeholders.

When fully completed, the port, which covers 90-hectares of land, will feature three container berths, long dry bulk berths and three liquid berths, which will allow it to handle up to 2.7 million twenty-foot equivalent units (TEU) of containers per year.

The seaport project was awarded to Lekki Port LFTZ Enterprise Limited by Nigerian Ports Authority (NPA) on a Build, Own, Operate and Transfer (BOOT) agreement for a period of 45 years before transfer to NPA, is set to place over 4000 trucks on the roads when it commences activities.

Recently, Lekki Port LFTZ Enterprise Limited received US$ 60M, which is the first installment of the US$ 629M loan facility from China Development Bank (CDB) for the seaport project.

This was disclosed by the company’s Managing Director, Mr. Du Ruogang while briefing the delegation of the Federal Ministry of Transportation, NPA, Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Shippers’ Council (NSC) and other stakeholders during the ministry’s first quarterly monitoring visit to the project site.

However, as it nears take-off, neither railway nor additional road networks have been budgeted to ease the deep seaport of the possible logistics constraints witnessed at the Apapa and Tin Can Island Port environs.

The Lekki Port LFTZ Enterprise boss, however, added that the construction would be completed as scheduled with a targeted commercial operations date in fourth quarter of 2022, without roads, rail or pipeline connection for Dangote’s refinery.

While the Managing Director of Nigerian Ports Authority and Executive Secretary of Nigerian Shippers’ Council (NSC) have warned repeatedly about the impending logistics constraints of the project, which has reached 50% completion with 1,909m long core of the main breakwater fully complete, and work on the quay wall and landside infrastructure at advanced stages.

The port which is expected to a relief the traffic congestion at Apapa axis and alternative to the Lagos ports, has become a major source of worry for maritime stakeholders about the logistics part of the multi-billion dollar project with no provision for rail or piping as alternative modes of cargo evacuation while the existing road is already characterized by gruesome traffic and in need of an alternative road.

In a webinar monitored by MMS Plus newspaper last week, hosted by Lagos State University (LASU) School of Transport, themed “Nigeria’s Seaport in Crisis”, a senior lecturer, School of Transport and Logistics, Dr. Taiwo Salaam disclosed that Dangote refinery would make use of 4000 tankers per day to deliver its crude oil products.

Salaam expressed worry that the Lekki environs may witness worse traffic chaos than the challenges observed at Apapa and Tin Can Island port environs at the moment.

Similarly, the General Manager, SIFAX Logistics Company Limited, Mr. Adewale Aderibigbe stressed on the importance of intermodal form of transportation as it is the key for seamless port operations, especially large scale ones like deep seaports.

Adewale said that 90% of the cargoes that leave the Lagos ports move via the roads, stressing that until the nation has an efficient rail system, seaport operations and inland port operations won’t be seamless.

While commenting on the barge operations,  he opined that barging is a viable alternative to roads and non functional railways, but lamented that no one is talking about its safety let alone do something about it by way of regulation.

He admonished the government not to repeat the logistics shortcomings at Lekki deep seaport, adding that people won’t invest in dry ports until the government addresses the infrastructure deficits.

Recall that the Executive Secretary of NSC, Hassan Bello while speaking on the challenges confronting ports operations said: “We cannot make the mistake of Apapa and Tin Can Island ports, that is the advantage of deep sea port to take in larger ships hence there’s reduction in cost of containers.”

“Cargoes should be able to leave the ports as soon as they arrive in order to make things easy. The government, terminal owners and shipping companies will make more money when it happens like this.”

He added that the Lekki port should be a transit port and situations where containers are stacked in the ports should be avoided.

Meanwhile, when quizzed about the need to connect the railway to the Lekki deep seaport, the Managing Director of Nigerian Railway Corporation (NRC) Engr. Fidet Okhiria told our correspondent that there is no budgetary provision for that in the 2021 budget.

Similarly, there is also no budgetary provision for pipelines to connect the Dangote refinery to major depots even though piping would ease the burden of cargo evacuation of petroleum products.

Neither Lekki deep seaport champions nor Dangote should be saddled with the onus of providing railway or pipeline to support their investments because such burden should be borne by the federal government as part of efforts to support the investments.

While Dangote refinery remains the hot spot and most advertised project in the Free Trade Zone, many multi-million dollar projects are also springing up yearly with some already operational and some yet to commence  operations.

Dangote refinery is a 650,000 barrels per day (bpd) integrated refinery and petrochemical project under construction in the Lekki Free Zone and is expected to be Africa’s biggest oil refinery and the world’s biggest single-train facility, upon completion in 2020.

The refinery is expected to produce 10.4 million tonnes (Mt) of gasoline, 4.6Mt of diesel, and 4Mt of jet fuel a year. It will also annually produce 0.69Mt of polypropylene, 0.24Mt of propane, 32,000t of Sulphur, and 0.5Mt of carbon black feed.

With these amounts of outputs, questions on the lips of many is where and how would these products be transported with the level of traffic experienced to access the island from the mainland and vice versa and Lekki-Epe Expressway?

The Lekki Free Trade Zone which houses the port is linked by a single road, Lekki-Epe Expressway. With no rail yet or water transport, the link road cannot serve the thousands of trucks that would be accessing the port.

Also the growing amount of house development and the influx of people into new towns daily on the Lekki-Epe corridor have increased the number of vehicles on the road, leading to constant traffic congestion. This is a taste of what awaits commuters when the seaport takes off.

The success of any port greatly depends on enhanced road infrastructure as well as railway connectivity. These two factors would ensure smooth flow of cargo and containers to and from the terminals.

With this in mind, on the 1st of November 2020, Lagos State Governor, Babajide Sanwo-olu flagged off the upgrading work on the 19km access road Lekki-Epe Expressway from Eleko to Epe T Junction which will have six lanes, three lanes on each side where the extreme lane will be reinforced for dedicated heavy container trucks.

The problem, however, is that the deep seaport is scheduled to take off next year but the road construction is yet to commence.

The Lagos Government will also construct two other important roads for port access, namely Lekki-Epe Expressway from Ajah to Eleko with a length of 31km and the Old Ibeju-lekki Road from Eleko to Akodo, which has a length of 21km.

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