China Harbour Engineering (CHEC) are the investors set to construct Nigeria’s first ever seaport. In this interview with a delegation of LEADERSHIP staff on an eye opening visit to the ancient province of the Peoples Republic of China, the Chairman, Lin Yichong, spoke with RUTH TENE NATSA on CHEC’s interests in the construction of Lekki Port among other issues.
Tell us about China Habour Engineering….
China Harbour Engineering Company Limited, is a subsidiary of China Communication Construction Company (CCCC). It is one of the biggest project constructors in China with a total asset of over 1trillion RMB as at 2017. For the fortune 500, the CCCC ranked 103 in the global ranking. Though we are a subsidiary of the CCCC, we are different from other subsidiaries because we are authorized by the China government to handle overseas businesses, meaning our focus is on the international markets. We began operations in 1980, over thirty years ago and currently have over 90 subsidiaries globally. We are mainly focused on the transportation projects, such as the ports, highways, bridges, railways, airports and real estate’s development. We also supply port machineries through a subsidiary company in Songhai which also belongs to the CCCC and provides over 80 per cent of the cranes in the global markets, it is the biggest Port machinery company in the market world. We are contractors, manufacturers, investors, developers and operators, this is to ensure we have a phenomenal development. This means we may not only build the Port, but will be shareholders, investors and operators. By this we have built some highway projects by Public Private Partnership (PPP) or Build, Operate Transfer (BOT) models.
Tell us some of the projects you have done in Africa
Right now we have some projects in Camaroon, we are also the real estate developers in some Asian countries such as Sri-lanka, Malaysia, Tunisia and in Nigeria we should have some real estates in Nigeria. In 2017 we signed a $14billion USD project and the revenue from that is around -6 billion. So when talking about construction companies we are the leading company in construction in China.
What is your impression on the Belt and Road Initiative?
Actually we started our business in 1994 in Nigeria where we did some reclamation from 1994 to 2012. We have finished between 4-5 projects. One of the projects we have built is the Lagos Belt and Road. When we are talking about the Belt and Road Initiative, I believe because we started our business 20 years ago in Nigeria and know the country very well. I think the demand, needs in Nigeria is very huge and how we can proffer a solution for the financing is quite important. With the Belt and Road Initiative, highly common, the Chinese have provided different kinds of mechanism for the financial solution. This is why in the past few months we have discussed with the relevant ministries in Nigeria to see what we have as a solution for the financing to meet the demands for the infrastructures. Right now we started the loan agreement for one of the Highway, from Keffi to Makurdi at a cost of about N500m, we have signed a loan agreement already and if everything goes smoothly, we can start construction in the second half of this year. We also discussed about the second phase of the Highway, as well as the Port development in Lekki, Lagos Nigeria. For the Lekki deep sea port which you know Nigeria does not have one at the moment, the water must be over 16 meters, but already the existing water depth at the moment is 13meters which cannot meet the requirement for the sea generation container ship as we need over 16 meters. However considering the size of the country and the population, the Port facility at the moment is far behind, which is why we are the EPC contractors and at the same time discussing about the investment, in which hopefully we will become the major shareholders at the Port and we also hope to finalize all the negotiations in a few month’s time. And on its completion it would become the first duty port in Nigeria. I believe this initiative will provide more solutions not only for Nigeria but the Chinese company to have a solution for the financing. And of course the Ports facilities including the waste, water supply and even power supply would become unique
How long is the project supposed to last?
It is supposed to last over a 3 year period, the project has just started but we are still negotiating on the terms of the financing. We hope to sign the agreement on the China-Nigeria Summit.
With the low water level, is there anything that can be done that can be done?
With the Lekki Port we are going to make it 16.5meters, while the new one we think the size of the economy, considering Nigeria is the biggest economy in Africa, I think we need at least one needs one sea port, I do not think one is enough for the country, but as it is Nigeria does not have any in the country. Which is why we are glad that the relevant ministries and officials have agreed and have really started.
What is the estimated cost of the entire project?
The estimated cost I do not remember the exact figures, but it must be above one billion dollars
What have been some of the challenges you have encountered with the authorities since your discussions began?
The challenges for the port project, of course every country has its own regulations and as investors, we must abide by those regulations. Sometimes it may take longer for the government departments to approve all necessary documents, but fortunately for this project we have almost finished all the necessary approvals, so I do not think there are any other issues for us. Right now we have the concession contract already and hope in about two three months, we shall finalize, because it is investment. We also need to deal with the bank, this is when the bank also needs to also review and provide other necessary documents. So we need about 2/3 months for all the procedures.
You are aiming to become major shareholders, how is that?
According to our earlier discussions, we will become the major shareholders of the Port
What would be the sharing formular, is it going to be 50/50 or?
No there are several stakeholders, and we would take around 45% as the biggest shareholder.
You would actually be bigger than the Nigerian government itself?
This is why when I met the Chairman of the Nigerian Ports Authority (NPA), I told him right now we are partners and he is also the Chairman of the Lekki port and I tell him, he is our boss.
Is there any provision to transfer knowledge to Nigerian Engineers?
Yes, actually we are doing different programmes in different countries and normally whenever we have a project, we need to recruit local Engineers and labour, as many as possible because the increase of Chinese labour makes it quite difficult for us even not many Chinese people want to work abroad right now, we need to use more and more local labour force. And normally we have some training classes in Angola and other countries and after they finish we offer some certificates after which they can work for us and when our project is finished they can work for other clients. And some other countries may provide some forms of scholarships for their workers to come to China to study at the University. Every year we have a number of students from Africa to study in China. We provide scholarship and for Nigeria for this project, I am sure after or even during the construction we are sure to have a lot of Engineers to join us, but in the meantime, we are responsible for this project also and we will need local people to help us with the operations in different ways. Either to help us cover the job opportunity for the local community.
How many job opportunities would this Port create?
I am not too sure but for the construction alone, at least over one thousand.
And what would that contribute to Nigeria’s immediate economy?
That is difficult for me to say, as I do not know the current Gross Domestic product (GDP) of the whole Nigeria.
Not much is known about your involvement in this project, why?
True, that is why when I met with the NPA Chairman, I told him that China Harbour are doing quite well compared to the other companies, we are however not doing quite well in Nigeria, which is why I think Nigeria is one of the most important economies not only in Africa, but in other countries of the world. And last year I made a decision I made a decision to arrange more research and come into the country. We think for all the business, we should think about how to bring solution which is why we are thinking more actively to discuss with some relative ministries to see whether we can or not we can …the relative project in Public private Partnership (PPP) or BOT models. This way we can use the advantage of the company because we have the technical knowhow, expertise and also have very strong financial capacity. Of course what is most important is that we have the ability to work with African countries and we have the resources and if both sides would work together, we think we can identify the project if accepted not only by the government but by our company, which is why we are currently discussing so many projects and this way the government can discuss with us more easily.
So we are willing to make more contributions for a country like Nigeria, because I am confident of this country when we talk about the development, because we have the youth population, high demand so the room is huge for us. What is important right now is for us to understand each other. We are doing quite well in other countries but in Nigeria, not many people know China harbor. Just like I told the NPA chairman, we build a very big project in Cote d’ voire, we are almost finished and yet they do not know and I tell him I will like to invite him to Cote d’voire, Ghana or even Cameroon for him to see what we are doing
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