Investment advisors and other maritime operators have called on President Muhammadu Buhari to intervene on the issue of the high charges slammed on investors at the Tarqua Bay base of Lagos Deep Offshore Logistics (LADOL) to encourage inflow of investments.
The operators lamented that the exorbitant cost of land per square meter, and high cost of boat services in the free zone have scared potential investors who are willing to take advantage of the strategic location of the zone to bring in Foreign Direct Investments (FDIs).
According to them, the cost of land per square meter and the cost of boat services within LADOL are the highest compared to what investors pay in the other zones.
For instance, investigation reveals that the zone operator demands $15 free zone entry and exit fee per person per day; and annual passenger jetty service fee of $6,000,000 even when the value of the jetty itself is less than $1 million.
Each investor operating at the free zone is also required to pay $160,000 annual fee to station four armed guards in the free zone while the zone operator spends less than $10,000 on these guards.
Maritime operators argued that unlike other free zones in the country, LADOL base is under lease to a private zone operator, which compels potential investors to negotiate with the zone operator instead of the Nigerian Ports Authority (NPA).
This arrangement, they argued has led to investors paying exorbitant and suffocating charges to the zone operator, compared to the “pittance” the zone operator paid to the NPA for the lease.
The operators urged President Buhari to look into the high charges, which they said have led to gross underutilisation of the large expanse of land, despite its attractive strategic location.
Some of the operators pointed out that the high charges imposed on oil and gas industry stakeholders at the Lagos free zone are passed on to the Nigerian National Petroleum Corporation (NNPC) by the free zone operator and subsequently paid by the federal government.
Speaking on the issue, a maritime expert and Lagos-based lawyer, Mr. Kingsley Omose told journalists that for the federal government to reduce the cost of producing crude oil, it must check the high charges imposed on the operators doing jobs at the free zones.
“If the federal government and the NNPC want to slash production cost for a barrel of crude oil, they should look at the operations and charges of the likes of Intels and LADOL who are tenants of NPA but whose exorbitant charges are paid by federal government through NNPC’s majority stakes in the joint venture oil operations of the international oil companies (IOCs). For the Production Sharing contracts the reason why federal government’s take from offshore oil production is little or nonexistent is due to the high charges, which Intel’s and LADOL incorporated and which must be deducted by IOCs before sharing the balance oil with the federal government”.
He said for a company to invest in the free zone, such a company would have to approach LADOL and will have to pay a premium.
“You can see that with the Samsung situation – where what they were charged by NPA is pittance compared to what they’re paying LADOL. That is the story of Nigeria, where public officials constantly put the interest of others and themselves before the Nigerian state”.