NERC begins process to review electricity tariff next year

Nigeria’s electricity sector regulator, the Nigerian Electricity Regulatory Commission (NERC), has begun the process of implementing a review of the electricity tariff by asking electricity Distribution Companies (DisCos) to submit plans on how to improve their service.

“The process will involve a review of the application of the capital expenditure allowances in the MYTO model for compliance with Performance Improvement Plans (PIPs) to be prepared by the Distribution Companies (DisCos) and approved by the Commission,” NERC said in guidelines it released for performance improvement plans it published May 10.

Under the current rules, the capital expenditure allowed for DisCos was N305 billion within five years, but this has proven unrealistic as the cost of metering alone for customers in Nigeria would cost N299 billion, according to Sunday Oduntan, executive secretary, Association of Nigerian Electricity Distribution Companies (ANED), at a customer engagement forum in Lagos last week.

So, the DisCos are unable to invest more than the N305bn in capital expenditure otherwise recovery of costs under MYTO will be impossible.

The MYTO is a methodology for determining electricity tariff in the Nigerian Electricity Supply Industry (NESI) and sets out tariffs for the generation, transmission and distribution of electricity in Nigeria. It employs a unified way to determine total industry revenue requirement that is tied to measurable performance improvements and standards.

 

According to the guidelines for the Performance Improvement Plans (PIPs) set by NERC for DisCos, it will cover the 2020-2024 tariff period but it will be subject to the contractual provisions of the Performance Agreements executed between the core investors and the Bureau of Public Enterprises in respect of the allowances for capital and operating expenditure in the remaining term of the agreement.

 

NERC will use the PIPs to define performance standards for DisCos in the next five years with emphasis on improvement in energy throughput and delivery by DisCos, reduction in aggregate technical/commercial losses and overall improvement in service delivery to customers.
The PIPs will form the basis for revenue requirement projections and also serve as the companies’ service charter with the consumers to which they will be held accountable by the Commission, according to the guidelines.

“The Commission expects an output-based plan that states the target outputs over the planning horizon, the programmes and activities that will lead to the realisation of those outputs, the human and material resources required, the projected costs and analysis of the risk factors and the proposed mitigation measures,” NERC said.

Based on the PIPs, the regulator will be able to assess DisCos’ performance in terms of loss reduction reliability and availability, metering, customer satisfaction, network expansion, safety and social responsibility

The DisCos would show not just running cost but provide explanations for costs under the new rules. This will check abuse as the regulator routinely accuses the DisCOs of keeping more revenue collected from customers than they should. DisCos pay other players in the value chain – power generation companies (GenCos), Transmission Company of Nigeria (TCN) and gas producers – through the Nigerian Bulk Electricity Trading Company (NBET).

For example, NERC said DisCos collected N106.6 billion out of the N171 billion of electricity invoice to customers between January and March last year and remitted 31 percent of the amount to the NBET to settle obligations to other market players.

But to develop this plan, all DisCos are required to demonstrate that they have effectively engaged with a wide range of stakeholders when formulating their plans.

“The Commission will not consider it sufficient for DisCos to set out the stakeholder engagement activities they have carried out without demonstrating what has been learnt from the engagement and how the lessons have impacted on the plans,” the Commission said.
Analysts believe this is a positive for the sector and long overdue.

“It is a positive for the electricity sector in Nigeria because the biggest problem it has right now is lack of cost-reflective tariff. This impacts every other segment, constrains investments and discourages service improvement,” Ayodele Oni, energy lawyer and partner at Bloomfield law firm, said.

Oni further said that NERC seems to be getting the policy right as it is implementing series of complementary policies including meter asset provider, sub-franchising and now tariff review at the same time.

“This new holistic approach is what is required to move the sector forward,” Oni said.

Source: By Isaac Anyaogbu

Rural land prices remained flat in England and Wales in first quarter of 2019

Average rural land values remained broadly flat in England and Wales during the first quarter of 2019 but buyers remain cautious due to the delayed Brexit deal.

Transactions levels traditionally decrease during the first quarter of the year, but this year there has been a significant reduction in activity across the sector, and this languid market has impacted on pricing levels, according to new data from property consultancy Carter Jonas.

Average arable land values now sit at £8,719 per acre, down by 0.3% on the first quarter of 2018. Average pasture land values fell across both the quarter and annually, by 0.9% and 1.3% respectively, to £6,803 per acre.

Across the regions, buyers are still keen to acquire land for the right price. However, with the exception of the South of England where activity remained robust, limited availability has restrained the market.

Assets that are best-in-class, well-located or offer viable development potential remain attractive and, in some cases, sales have been agreed at or in excess of the guide price, the report explains.

‘Limited supply and wider economic and political concerns have caused people to take stock, with many waiting for clarity over Brexit before launching or buying assets,’ said Andrew Fallows, head of rural agency at Carter Jonas.

‘Faced with the heightened level of uncertainty over the past few months, these findings are not unexpected. In the current climate, demand for land is being driven by location and opportunities to add value and diversify,’ he pointed out.

‘For example, land with development potential has long since commanded a price premium, particularly when compared to the steady performance of agricultural land values. An ongoing relaxation in planning policy has unlocked more opportunities for the development of agricultural land, with developers and house builders, on the whole, willing to absorb those costs. Additionally, in some areas, rollover buyers continue to stimulate activity, looking to acquire in the locality of their existing holdings,’ he added.

The report also points out that support remains available for agricultural purchasers. This is reflected in debt levels which are at record highs. Low interest rates continue to benefit the sector and there is clear evidence of purchasers looking at long term fixed rates.

‘Whilst we cannot avoid the current challenges impacting on the market, we are starting to see signs of improvement. Buyers are continuing to drive activity and some land, particularly smaller parcels, are attracting premium prices,’ Fallows concluded.

Source: Property Wire

Property sales market stalls in London but rents are rising

Commercial and residential property markets have stalled in London but the capital’s lettings market has seen increases in rents paid, according to a new analysis.

There has been subdued house price growth, a sharp drop in housing completions and a lower take up of office space, the report by Centre for London shows.

Take-up of commercial property in London and active demand, that is the total space currently sought by companies, both declined by 14% in the first quarter of 2019 compared to the previous year.

House prices fell by 1.45 in December 2018 when compared to the previous year, a fourth consecutive month of falling prices. This contrasted with declining, but still positive growth in the rest of England and Wales.

The picture of house prices is uneven across the capital. Whereas high prices in inner West London fell by almost 11% in the year to December 2018, prices elsewhere in the capital began to rise with the strongest growth experienced in outer North West and West London.

However, the reports says that the continued political uncertainty may be leading to a market slump, with house prices on a downward trajectory since a sharp drop in April 2018.

This could be good news for those looking to get a foot on the property ladder. The subdued house price growth, alongside lower unemployment and rising earnings has boosted the number of first time buyers in the capital.

Political and market uncertainty has also led to a slowdown in residential property transactions and construction activity, as developers take a more cautious attitude to their pipeline.

The analysis found that transaction volumes continued to fall, dropping 12% in the final three months of 2018, compared to the previous year. Flats experienced the sharpest fall, down almost 20%.

There has also been a slowdown in planning activity, with a 12% drop in planning application decisions in the year to the fourth quarter of 2018 and new build housing completions have also suffered a large drop, which just 18,500 completions in the 2018, a 32% decline on the previous year. New build starts remained around 17,500 over the same period in line with the previous two years.

Market data indicates that whereas residential sales and house prices have stalled, there have been modest increases in the city’s rental market, as new supply into the market slows.

According to Dataloft figures used, average rents paid in London increased by 2.6% in the first quarter of 2019 compared to the previous years. However, rents for terraced houses and smaller flats experienced the fastest growth, compared to larger properties which saw rents fall.

While rental price change varies, the highest growth in rental prices paid were in Zones 1 and 2, with an annualised increase of 3.3% and 2.9% respectively in the first quarter of 2019, though increases were also experienced in Zones 5 and 6, including Croydon, Bexley and Sutton as some renters look further afield in search of better value for money.

#With the scheduled date of Britain’s departure from the European Union delayed, continued political uncertainty seems to be denting confidence, leading to a slump in both the commercial and residential property markets,’ said Silviya Barrett, research manager at Centre for London.

‘Businesses are less active in seeking out office space, while home owners are delaying putting their properties on the market. There has also been a slowdown in the supply of new housing and commercial space, as developers are more cautious about the subdued market conditions,’ she pointed out.

‘Lower house prices in some areas of the city has enabled more Londoners to buy their first home, but reduced supply is leading to increased rent levels, putting pressure on those who cannot afford to get on the ladder,’ she explained.

‘With developers being ever more cautious and local councils coping with reduced planning budgets, questions about how London’s housing needs and higher delivery targets will be met, become even more urgent,’ she added.

Source: Property Wire

‘Integrity will Make Estate Agents Indispensable in Property Market’

Real estate professionals are not smiling as usual on account of low patronage but to salvage the situation, experts say integrity and commitment to the practice would help practitioners to thrive.

Speaking during a seminar organised by the faculty of estate agency and marketing, a division of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), the managing partner, Osas and Oseji, an estate surveying and valuation firm, Mr. Hyacinth Oseji urged practitioners to improve on their skills and knowledge through training.

Oseji posited that prompt application of core professional standards of integrity in service delivery would make professionals to be more relevant in the ever-changing socio-economic environment. He stated that virtues such as trust, honesty and commitment to transparency should be uphold while transacting business with the public.

According to him, real estate practitioners must also be able to constantly network to learn from others, as knowledge is key to success in the profession. “Our personal knowledge is the bedrock of anything you want to achieve.

The knowledge entails that we must have a deep understanding of the market where we operate because the real estate market operates in circles, which follow economic trends. Practitioners must have clear understanding of what the client want. Knowledge of what is available in the market at all times including the ones handled by colleagues or other participators in the real estate market”.

Oseji who spoke on, ‘Strategies for timely closure of real estate transactions’, lamented that all over the world the perception that estate agents are fraudulent is rampant because some people collect house rents from clients and disappear without securing the proposed accommodation. However, he said, professionals can change the perception through the way they present themselves to the public in the course of running the business.

Contributing, the chairman of the faculty, Samson Eboigbe tasked practitioners to restrict domination of the profession by quacks and miscreants in the society. He expressed concerns that the estate agency practice in Lagos State has been dominated by quacks, which has rendered the profession as unreliable business.

Eboigbe called for a law regulating the operation such that anyone practicing estate agency would be forced to register with the regulating body in order to erase negative perceptions and restore public confidence in the profession.

Hong Kong Property Prices to Rise for a Decade, Says UBS

Prices are set to rise for another decade in the world’s least affordable property market, Hong Kong, according to UBS Group AG.

Inflows of residents will be key as the Greater Bay Area project integrates a group of mainland Chinese cities with Hong Kong, property analyst John Lam wrote in a research report. The extra buyers will be “more than enough” to outweigh waning housing demand from an aging local population, he wrote.

That would extend a relentless climb that has seen the city’s property prices triple during the past two decades. The UBS report comes as three straight months of gains make it look as though a slide in home values from August through January was just a temporary blip. Prices rose for a 13th straight week, data Friday showed.

Lam estimates annual housing demand in the city to be 60,000 units over the coming decade, well above the government’s long-term supply target of 45,000 units per year.

Critical Mass

Hong Kong will see fewer private homes as the government focuses on public housing. The market has rebounded in recent months as sentiment revives on low interest rates and limited supply. People are flocking to purchase homes because of their fear of higher prices in the future.

At Wheelock Properties Ltd.’s project Montara in the Tseung Kwan O area, 103 potential buyers have been vying for each unit, making it the most competitive project since 2013, according to the Hong Kong Economic Times.

UBS is not alone in forecasting protracted price gains.

“There may be some short-term adjustments in prices, but they will continue to rise in the coming five to ten years,” said Bloomberg Intelligence real estate analyst Patrick Wong, citing population growth and limited land supply.

He expects prices to climb 10% this year.

Source: Bloomberg

Property stokvel buys its first 5.8ha piece of land

After only launching in May last year with a membership of 30 potential investors, the Rustenburg Property Investment Stokvel has grown to 90 members and has already purchased a 5.8ha piece of land worth R5m that is ready to be serviced.

The property stokvel is the brainchild of investment pundit Lebo Ratema, who brought most of her clients – people that she knew – under one roof to get their buy-in to start investing in property.

“As an investor I have the information and the data. I then talked around most of my friends and people that I knew were interested to put our heads together and create wealth,” explains Ratema.

“Many of my clients had been declined by the banks. Some had made mistakes and had been taken advantage of because of their lack of knowledge and know-how to get into the property investment business.”

Ratema is ecstatic with the progress made as Rustenburg Property Investment Stokvel has grown from 30 to 90 members in less than a year.

Each member holds 100 shares sold to them.

Every member has a choice of three investment options. The first option is over three years, the second over four and the last over five years. If you opt to invest over a three-year period you contribute R5,500 monthly, over four years R4,125 and over five years R3,300.

“We have different voluntary contribution and payment plans to suit every member to be able to purchase shares.

“This is not a one-man initiative. I must emphasise that we have a 10-member-strong committee in charge of running the whole project. All of them have signing powers.”

Ratema said the land they are ready to develop is where they are based, in Rustenburg, but the whole project of servicing the land costs R19m, before the actual building of the housing units.

“The rezoning of the land will be completed within a year as we are now busy with proclamations and servicing the land.

“The development of infrastructure like roads, electricity and water must be factored in.”

Ratema and other stokvel members have been liaising with property experts and property management companies who will help manage the properties.

She said the stokvel is open to everyone who aspires to invest in property.

Ratema warned that the project was not a get-rich-quick scheme but a long-term investment. She said members would start getting dividends from their investment once the first house is sold and would share the profit, depending on the number of shares a member has bought.

“Once the last house has been sold and every member has been given their share dividend, we will dissolve the investment stokvel and start all over again.”

Source: BY XOLILE MTSHAZO

Australians Exposed as Property Obsessed

According to new research by HSBC bank, Australians clock up an average 2.5 hours a week preoccupied by the property market – more than twice the time they spend at the gym (1.08 hours) or speaking to parents (0.88 hours).

The research, which makes Australians the seventh-highest property obsessed nation in the world, demonstrates that a cooling housing market is doing little to dent our property fixation.

Property extremists (6 per cent) have taken their obsession one step further, spending more than seven hours viewing property each week.

They feel the time invested in researching properties pays off, with three quarters (74 per cent) saying they feel “relaxed” about buying property and almost four in five (79 per cent) feeling “in control”.

House hunters are even putting off having a baby (8 per cent) or delaying marriage (6 per cent) to get on the property ladder, the survey of 11,932 adults across the world found.

Alice Del Vecchio, head of mortgages at HSBC Australia, said some home buyers are taking their passion for the perfect house to the maximum.

“An industry of property magazines, TV programs and websites has made it harder than ever to have realistic expectations about what you can afford,” he said.

“Many Australians are putting off important early life stages, such as having children, in the quest to afford the perfect property,” she says.

Not much will stand in our way when it comes to purchasing real estate, either.

Rumours of a house being haunted would only deter 21 per cent of buyers, while “difficult” neighbours are the biggest deal breakers in the quest to find the perfect home (46 per cent).

PRDnationwide’s national research manager Dr Diaswati Mardiasmo believes people have become so consumed with real estate because it has traditionally been recognised as a wealth building strategy, which piques everyone’s interest.

“Property will always be a hot topic at the dinner table with friends,” she said.

“We’re also obsessed with renovations and creating a dream home that suits our lifestyle.”

Our preoccupation is also fuelled by the fact that the internet has put real estate at our fingertips at any time of the day, Australian Property Institute chair Tyrone Hodge says.

“The voyeurism element of real estate also gives us permission to view inside other people’s homes and what they’ve done them, which we all love,” he says.

“Looking at real estate is more than just research – it’s an investment opportunity, a hobby and entertainment combined,” he says.

However, our obsession can often be detrimental to success, as time is a key component to capital growth, according to property expert Leonie Fitzgerald, of Wealthology Australia.

“Our own research shows that 56 per cent of our clients procrastinated for at least six months before signing a property contract,” she says.

“People simply don’t want to fail. It’s easier to do nothing than it is to be decisive,” Fitzgerald says.

Melbourne buyer’s advocate Emily Wallace says purchasers often spend hours scrolling through online real estate platforms.

“Many buyers enjoy the online research element but that excitement soon turns to confusion and exhaustion after a few Saturdays spent going over properties, and their judgement becomes clouded,” she says.

There’s a fine line between looking at real estate for research purposes and entering a zone of obsession, Wallace warns.

“If you spend too long caught up on researching, you may never take the leap to purchase.”

By Nina Hendy

Dubai Developers Offer Heavy Incentives to Attract Property Buyers

Lucrative incentives, innovative payment plans and freebees are tempting investors and tenants to own a home in Dubai as developers are going the extra mile to dispose of unsold stock ahead of potential upcoming supply of over 50,000 homes this year.

Developers in Dubai are pulling out all the stops to win over buyers for newly launched and existing projects by extending post-handover payment plans on off-plan properties to ready homes as well as arranging bank financing for initial down payment of the property.

Extended post-handover payment plans from three years to anything up to 15 to 20 years, rent-to-own schemes and guaranteed rental returns are now the industry norm as the developers get creative to compete with other investment markets.

Experts?and analysts said it is a win-win situation for both developers and buyers as Dubai real estate market enters into a maturity phase and shows stability despite more than 27 per cent decline in prices since the peak of mid-2014.

Lynnette Abad, director of Research and Data at Property Finder, said developers have become quite creative over the last few years to sell their properties, both under construction and ready stock. The most popular have been the post-handover payment plans, rent-to-own and new schemes such as the one offered by Emaar and DMCC, she said.

“Developers are very aware that they need to be creative with new offerings to attract more foreign direct investment and be competitive with other popular investment markets,” she said.

Market insiders said developers have been playing the role of banks to stimulate demand for both off-plan and ready properties with ingenious payment plans. This is because under the current loan-to-value requirements in the UAE, the majority of buyers find it difficult to raise bank finance, and establish a foot on the ladder, due to hefty deposits and fees required.?

“As the real estate sector matures, developers need to come up with innovative schemes to attract buyers. Rent-to-own and extended payment plans are crucial in attracting home buyers,” said Rizwan Sajan, founder chairman of Danube Group.

He said more than 80 per cent of the UAE expatriates still live in rented homes and most of them have a wish to own their home in Dubai and these payment plan will surely help them.

“In the coming years, we expect more innovation to drive the growth of the real estate sector in Dubai,” he said.

“In 2014-15, we launched trend-setting one per cent monthly payment plan that helped us to attract thousands of end-users who had earlier been priced out of the market. Since then, we sold more than 5,000 units in the last 5 years.

“We have successfully converted thousands of tenants to home-owners. Going forward, these innovative schemes will help attract more end-users and home buyers to Dubai’s real estate,” he said.

Public, private developers?

While government-affiliated developers are the ones offering flexible payment plans and rent-to-own schemes for ready homes, private players are jumping on to the bandwagon as well. Nakheel is offering a payment plan for the Al Furjan villas and townhouses where buyers can move in now and pay across seven years. Customers only need to put down a five per cent deposit. Other perks include no Dubai Land Department fees, two years free service charges and two years free club membership.?

The latest incentive deployed by Azizi Developments for a newly launched scheme in Al Furjan is to partner with one bank for down payment loans while another financial institution will service the remaining portion of the mortgage. This has been conceptualised to bring in people who cannot afford the initial down payment.

Shaher Mousli, chairman, Arthur Mackenzy Properties Group, said extended multi-year payment plans and rent-to-own schemes are a norm in many parts of the Western world, however it is the developer-financed projects that are able to offer the level of flexibility that the buyers in today’s market expect.

“With offers like 10-year and 15-year rent-to-own schemes direct from the developer in the market, we foresee a sizeable part of UAE residents becoming homeowners,” he said.

 

“International investors have traditionally been unable to benefit from local banks with little or no offerings to suit them. Such payment plans directly from developers will surely add to the surge of international investors ahead of Expo 2020,” he added.

Rent-to-own schemes?

Rent-to-own schemes could see a good take-up since tenants only need to produce a small down payment unlike the 25 per cent sought by banks for mortgages. Even industry giant Emaar Properties is offering back-loaded payment plans for a slew of its off-plan projects across Dubai. The developer offered post-handover payments for buyers of ready villas in Arabian Ranches 2, where the average price is D1,160 per sqft.

Emaar is also providing a scheme at a Dubai Hills Estate project where buyers of an apartment get a three-year renewable business licence, three-year renewable family residence visa and 100 per cent business ownership in DMCC.?

Similarly, Sobha Realty is offering a discount on school fees for those buying an apartment in its project – Hartland Greens, where the average price for off-plan projects is Dh1,870 per sqft, according to DLD data.?

Haider Tuaima, head of Real Estate Research at ValuStrat, said any payment plan that minimises down payments with monthly payments not exceeding 30 per cent of an income is a welcomed news by expats working in the country seeking to become owner-occupiers.

“As the market matures, master developers and sub-developers alike, become further aligned with market demand, and since current demand is biased towards affordable housing, we can expect more innovative payment plans for the medium term,” he said.

“It would be prudent that such plans are designed around a buyers’ ability to re-pay in the long term and that appropriate credit checks are taken by the seller at the outset of the agreement,” Tuaima said.

Guaranteed returns

In a bid to offload unsold stock from their inventory, developers are also offering a guaranteed rental return for several years on their serviced apartments to bring in investors. Damac Properties in particular has been piloting such schemes. However, longer payment plans can also result in higher property prices for buyers. Such properties are always traded at a significant premium to the general market price.?

Even in the rental market, big developers like Dubai Properties are offering up to 12 cheques and adding in sweeteners like a month’s free of rent to fill up unoccupied units in communities like Remraam and Ghoroob Mirdif.

Source: khaleejtimes

Panel Places Property Housing NEITI ‘Under Investigation’

The Special Presidential Investigation Panel for the Recovery of Public Properties (SPIP) has placed a property housing the Nigeria Extractive Industries Transparency Initiative (NEITI) under investigation. The property, Murjanatu House, which is being managed by Zamani Estate Agency and Property Ltd, also houses branches of First Bank Nigeria Ltd and Standard Chartered Bank, among others.

The panel’s head of media and communication, Lucie-Ann Laha said the action of the panel in placing a “Under Investigation” notice on the building on Monday was in furtherance to the findings of the panel thus far. She said according to findings, the property, which is situated on Plot 445 Maitama Cadastral Zone A05 in Abuja, was originally allocated to the National Board for Technical Education (NBTE).

The property became a subject of investigation following a petition to the panel on December 12, 2018 by one Ambassador Abdullah Alifa, the chairman of Petroleum Financial Corporate Ltd (PFC). Alifa, in the petition, had told the panel that his company in 2003 won a competitive bidding exercise conducted by NBTE to develop and manage the property for a period of 23 years with effect from the date of completing the envisaged building.

He said in 2006 while the company was still at the development phase, “There was an illegal and inexplicable encroachment of the property by Messrs. D.B. Mangal Limited and AFDIN Construction Company.

This encroachment was purportedly based on a spurious claim of a revocation of the title of NBTE, which was obviously in total disregard of the extant laws of the country in that respect.”

The petitioner said the encroachment happened after his company had paid N24million to the Abuja Geographical Information System (AGIS) in 2005 for the recertification of the certificate of occupancy of the NBTE property, which he said was handed over to PFC on behalf of the NBTE.

He said Messrs. D.B. Mangal Limited and AFDIN Construction Company continued with their construction on the property despite an order of court by Justice Sidi Bage in 2007 directing “the cessation of all such activities on the property.” He said the recovery of the property would be for the NBTE, who he said is the rightful owner of the property.

By Clement A. Oloyede

Lekki seaport: Analysts proffer measures to avert repeat of Apapa scenario

As Nigerian businesses anticipate the completion and take-off of the much-awaited $1.5 billion Lekki Deep Seaport, the consensus opinion among experts is that the promoters of the port project must do everything possible to avert a repeat of the Apapa conundrum.

Apapa, which plays host to Nigeria’s two busiest ports – Apapa and Tin-Can Island – that together control 75 percent of import and export activities, has for too long been bedevilled by persistent gridlock occasioned by unwholesome activities of truckers. This situation, apart from its effect on daily movement of motorists, residents and commuters in and out of Apapa, has crippled businesses in the port city, crashed property value in this prime location, and left over 40 percent of the buildings in Apapa GRA currently empty.

It is this situation that the analysts say the Lekki Deep Seaport axis may eventually face unless the promoters of the port project push for the expansion of the Lekki-Epe Expressway, Epe-Shagamu Road as well as the development of functional rail line to ensure smooth movement of cargoes in and out of the port.

Iheanacho Ebubeogu, general manager, security, Nigerian Ports Authority (NPA), said Nigeria needs a deep seaport as soon as possible to allow for berthing of bigger ships and achieve economy of scale. He added, however, that there was need to expand the roads leading to the Lekki Deep Seaport to eight lanes to avert the reoccurrence of the Apapa problem.

“To avert the reoccurrence of what is happening in Apapa today, government in building the new port, should ensure that between the port entrance and about 4 kilometres away, there should be only warehouses for storing cargoes and roads for movement of cargo by trucks,” said Kunle Folarin, chairman, Port Consultative Council (PCC), at a recent quarterly business roundtable organised by MMS Plus Newspapers.

Lekki Port, which is a multi-purpose seaport located at the heart of the Lagos Free Trade Zone, is expected to be one of the most modern ports in West Africa at completion. The NPA awarded 45 years concession to Lekki Port LFTZ Enterprise on a Build, Own, Operate and Transfer (BOOT) basis.

The experts say the promoters of the project also need to push for the establishment of truck and trailer transit parks within Epe axis to serve as truck holding-bays where electronic call-up system will be used to streamline the number of trucks coming to the port to pick laden containers or drop empties.

In addition, they say the Federal Government needs to limit the number of oil tank farms licensed to be situated within the Epe axis while the existing tank farms and refineries should use railway or pipelines as alternative means of evacuating products.

When these are done, they believe Nigeria’s first deep seaport will become a destination hub for trans-shipment and local cargoes without recording incidents of traffic congestion that currently obstructs free movement of cargo out of the nation’s major seaports.

Ebubeogu advised promoters of port projects in Nigeria to learn not to depend on port plan but port master plan.

“Port plan covers the jurisdiction of the port while port master plan covers the port itself and its maritime industrial environment. For instance, if the NPA has had the vision of port master plan at the time Apapa port was built, the whole of Creek Road and Wharf Road would have been secured and owned by the NPA,” Ebubeogu said.

“If the NPA had Creek Road, there is no way the authority would have allowed two tank farms to be located on Creek Road. We must have port areas where the port managers collaborate with the city administrators to regulate traffic,” he added.

 

Citing the America example, Ebubeogu said the World Trade Centre and its environs belong to the Port of New York and it enabled the US port authority to regulate the tenancy such that the traffic flow from the city is not in conflict with that of the port.

Folarin said there is no port corridor in Nigeria because there are several residential houses located 10 metres from the port. He suggested that new ports like Lekki should have ring road exclusively reserved for port operations.

“If we keep using single mode of transportation without rail and waterways, the roads will fail due to the pressure on them. For example, when Apapa-Oshodi Expressway was constructed, it was conceived that the road was meant to serve the Tin-Can Island Port, but today the road has become a municipal traffic area used by residents,” he said.

According to Folarin, a recent study carried out shows that about 1 million vehicles transit from Oshodi through Apapa to Lagos at peak period, showing that new ports like Lekki should plan for future growth.

“If we fail to do the right thing today, in the future, if Nigeria prospers and the volume of cargo increases, it will become difficult to manager prosperity than poverty,” he added.

Speaking further, Ebubeogu said traffic has been difficult to manage in ports in Lagos because all Nigerian ports have extensive port mileage except Warri port. Port mileage is the distance between the port entrance and the highway.

Ebubeogu said Warri port is the only port a trailer can come out from and drive into the expressway while others create port mileage, adding that Lekki needs to avoid city traffic interfering in cargo transportation.

“When Tin-Can was built, the highway started from Tin-Can gate, but today, if a trailer leaves Tin-Can Port, the driver will keep accelerating and breaking until the vehicle gets to Mile 2,” he said.
“Leaving Apapa Port from Wharf Road, it is only when the trailer gets to Stadium that the driver will start having constant acceleration. But from the port, the driver can change gear more than 50 times before getting to this point,” he added.

Upon completion, Lekki Port will have a total of three container berths, one dry bulk berth and three liquid berths. It is expected to have 16.5 metres draught for berthing of larger vessels and accommodate 2.7 million Twenty-foot Equivalent Units (TEUs) of container capacity per annum.

In terms of ownership, International Consortium led by Lekki Port Investment Holding Inc. (Tolaram Group) holds 75 percent of the equity share, Lagos State Government 20 percent, and the NPA hold 5 percent.

Source: By AMAKA ANAGOR-EWUZIE

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