Project Summary of Apapa Bulk Terminal ‘B’ A Public Private Partnership Between Nigerian Ports Authority And Apapa Bulk Terminal Limited
Disclaimer This summary should not be relied on as a complete description of the rights and obligations of the parties to the project and is not intended for use as a substitute for the contracts.
Abbreviations and Acronyms ABT
Apapa Bulk Terminal
NPA
Nigeria Ports Authority
FMN
Flour Mills of Nigeria Plc
GMT
Guaranteed Minimum Tonnage
ICRC
Infrastructure Concession Regulatory Commission
RfP
Request for Proposal
Introduction The Terminals specializes in Dry and Liquid bulk cargo terminal and a common user facility to the public. The terminal is expected to perform the following operations on the premises, utilizing the lease property and other improvements to be added to the lease property under the development plan. 1. The handling and delivery services for cargo, including without limitation stevedoring, loading and unloading of vessels, transporting, sorting, storage and the procurement , operation and maintenance of equipment for the forgoing; 2. The repair and maintenance of lease property 3. Implementation of the Development Plan. The terminal currently handles bulk cargo predominantly for the Industrial Processing and Bagging Plants of Flour Mills of Nigeria which is the holding company for the Terminal. This summary is in four parts; Part I contains basic project information Part II contains specific contract information, Part III contains information on actual performance of the project, and Part IV contains information on contract variation (if any). Project Summary: Part I: Project Overview Project Name: Apapa Bulk Terminal A Status: Under Implementation Name of Contracting Authority: Nigerian Ports Authority (NPA) Name of Concessionaire: Apapa Bulk Terminal Limited
Scope of the Project: Handling and delivery services for cargo, including without limitation stevedoring, loading and unloading of vessels, transporting, sorting, storage and the procurement, operation and maintenance of equipment.
Concession Period: 25 Years Total Project Value: USD 31,632,385 as total lease fee excluding cost of implementation of Development Plan.
Mode of Financing: Debt/Equity provided by the Concessionaire. Project Benefits: The benefits envisaged for the project includes: i. to increase the efficiency of port operations, ii. decrease the costs of port services to port users, iii. boost economic activity and accelerate development, amongst others.
Bidding Brief: Pursuant to the NCP approval, BPE, on 27th January, 2005 invited bids from the FMN for a right to enter into an agreement with the Lessor to lease the real property in the port of Lagos and certain immovable property affixed to the premises make certain improvements to the Lease Property. The Lessee is also expected to carry out maintenance and other services with respect to the Lease Property.
Approval Structure: On 15th June 2005, FMN submitted its bids and following an evaluation process conducted by the BPE, the right to enter into such agreement was awarded to the FMN. FMN formed the Apapa Bulk Terminal Limited as a Special Purpose Vehicle (SPV), to enter into this Agreement.
Part II: Contract Information Date of Execution of the Concession Agreement: 25th Oct., 2005. Start Date of Concession: 25th October, 2005 Date of Expiry of the Concession: April, 2016. Contact Details: Public Authority/Lessor: The Nigerian Ports Authority 26/28 Marina, Lagos Nigeria Tel: +234 (01) 2631574 Attention: The Managing Director
Private Entity/Lessee: Apapa Bulk Terminal Limited 2 Old Dock Road, Apapa Lagos, Nigeria Tel: +234(01)5453960-9 Attention: The Managing Director
Attention: Director General Infrastructure Concession Regulatory Commission Plot 1270, Ayangba Street Near FCDA Headquarters, Area 11, Garki – Abuja www.icrc.gov.ng
[email protected] Tel: +234-9-4604900
Shareholders of the Concessionaire: Flour Mills of Nigeria Plc Provision for Equity Transfer: N/A Lease property Transfers to Concessionaire: Commencing on the Effective Date and continuing throughout the Transition Period in accordance with the Transition Plan, the Lessor shall transfer to the Lessee the Lease Property free and clear of Security Interests for the Term. The Lessor shall remain the owner of the Lease Property except as expressly agreed to in writing by the Lessor subject to the provisions of Sections 4.3(b) and 4.4 in the contract agreement, throughout the lease term. Rights to collection of user charges: Concessionaire/Lessee collects user charges by way of throughput fee. Rate setting: Handled by Nigerian Shippers Council (NSC) being the Economic Regulator Performance Review: The Lessor and the Lessee shall hold a monthly voyage meeting (the "Voyage Meeting") not later than five (5) Business Days following the end of each calendar month, at which the Parties shall reconcile and agree the total volume of Cargo handled on vessels that have used the Premises in the preceding calendar month. Within five (5) Business Days of the meeting, the Lessor shall raise an invoice for the Throughput Fee based upon the volume of Cargo handled on vessels that have used the Premises as agreed between the Parties in the Voyage Meeting. Risk Allocation Risk Category Risks associated with project preparation Permits/Approvals Risk Provision of Utilities Risk Construction Risk Completion Risk Cost Overrun Risk Technical Risk Force Majeure Risk Operational Risk Financing Risk Demand Risk Environmental Risk Termination Risk
Concessionaire/Lessee
Contracting Authority/Lessor X X X
X X X X X X X X X X
X
X
X
Expected levels of performance: Minimum Expected Performance Criteria Concessionaire/Lessee to ensure there is no decline in the standard of the operations
Agreed Correction Period for Failure N/A
Reporting and Performance Monitoring The Lessee shall submit to the Lessor and the Regulator the Quarterly Traffic Report within thirty (30) days after the end of each quarter of each year during the Term. The Parties shall agree upon the format of the Quarterly Traffic Report. The Lessee shall provide any clarification of the Quarterly Traffic Report requested by the Lessor and the Regulator. Dispute Resolution: If the Parties cannot resolve the Dispute in accordance with the procedure specified in Section 16.3, then any Party may submit such Dispute to arbitration by notice to the other Party. Such arbitration shall be governed by the Rules of Arbitration of the International Chamber of Commerce, as in effect on the date of such notice. The arbitral tribunal shall consist of three (3) arbitrators. The Party initiating the arbitration shall provide written notice to the other Party of the arbitrator that it nominates. Within fourteen (14) Days of the receipt of such notice, the other Party shall provide to the initiating party a written notice identifying the name of the second nominated arbitrator, with the understanding that if such nomination is not made within such fourteen (14) Day period, then the International Court of Arbitration of the International Chamber of Commerce Court (the 'ICC Court') shall make such appointment. Within Ten (10) Days of the date of the appointment of the second arbitrator, the two arbitrators shall appoint the third arbitrator, with the understanding that if the two arbitrators are not able to agree on third arbitrator within such Ten (10) Day period, then the third arbitrator shall be appointed by the ICC Court. Events of Default and Termination Main events of Default
Defaulting party
Insolvency.
Lessee/ Contracting Authority
Fails to perform the Lessee Operations for 14 consecutive days in an operating year or 60 non consecutive days in a non operating year. Fails to pay any amounts Lessee /Contracting due in accordance with Authority the Agreement.
Procedure for Termination. Immediate termination notice. 15 days written notice to correct.
Same as above
Termination Payments. As stated under Termination Payment
Commits a breach of a material provision in the Agreement. Lease property (in whole or in part) is expropriated compulsorily acquired or nationalized by a Government Agency. Change in Law
Lessee /Contracting Authority
Same as above
Contracting Authority
Immediate termination notice.
Contracting Authority
Same as above
Termination Payments: The termination payments for the events leading to default and termination either due to the Lessee or due to the Lessor or due to other reasons are described below: Party and Events of Default Lessee event of default
Lessor event of default
Termination Payment 1. Pay to Lessor any and all actual costs, expenses charges, and/or penalties incurred or sustained by the Lessor as a consequence of such termination. 2. An Aggregate amount equivalent to the lease fees payable by the lessee for 2 years following the lessee event of default if such default occurs within two years from the effective date. Termination due to Lessor Event of Default. If the termination is due to a Lessor Event of Default, the compensation payable by the Lessor shall be the aggregate of: (a) any and all actual costs, expenses, charges, and/or penalties incurred or sustained by the Lessee as a consequence of such termination; (b) in the event that there is termination due to a Lessor Event of Default in the first Operating Year following completion of the works to be undertaken pursuant to the Development Plan: (i) the Commencement Fee; and (ii) any and all construction and development costs incurred by the Lessee pursuant to the conduct of the Development Plan or otherwise incurred pursuant to the development of the Premises in accordance with this Agreement.
Transfer at expiry of contract: The Lessee shall ensure smooth transfer of Lease Property to the Lessor upon expiration of contract term where renewal has not been effected as stated in the agreement. The parties agree to minimize disruption of the operations performed by the Lessee. Condition of Lease Property: Must be up to expected standard as reflected in the terminal Development plan. Responsibility for defects and liabilities: The Lessee and Lessor shall appoint two members to form a transition committee responsible for overseeing the remedying of defects and liabilities.
Part III: Implementation Information
Actual Project Performance The Lessee is required to achieve ninety per cent (90%) of forecasted volume as contained in their Technical Proposal. The Lessee guarantees to handle at least ninety per cent (90%) of projected cargo throughput as provided in its technical proposal and hereby attached. If Lessee fails to achieve at least ninety per cent (90%) of such throughput, the Lessee shall pay the Lessor the throughput fees of the difference between the throughput handled and the guaranteed volume of ninety per cent (90%). However, if the Lessee achieves between ninety percent (90%) and one hundred percent (100°/~), the excess throughput fee shall be discounted by ten (10%) per cent. Any achievement above one hundred per cent (100%) shall attract a discount of twenty (20%) per cent on the excess.
Performance Indicators* Bulk Cargo (Import & Export)
Performance Indicators* Bulk Cargo (Import & Export)
Year 1(mt)-2006 T A 701,250 N/A
Operational Phase Year 2 (mt)- 2007 Year 3(mt)-2008 T A T A 819,000 N/A 959,175 N/A
Year 6(mt)-2011 T A 1,445,1 N/A 75
Operational Phase Year 7 (mt)- 2012 Year 8(mt)-2013 T A T A 1,488,53 N/A 1,533,186 N/A 0
T= Target A=Actual Achieved *Performance indicator measured on GMT
Year 4 (mt)- 2009 T A 1,126,204 N/A
Year 5 (mt) -2010 T A 1,325,398 N/A
Year 9 (mt)- 2014 T A 1,579,182 N/A
Year 10 (mt) -2015 T A 1,626,557 N/A
Performance Failures The following instances of performance failure/breach of contract were noticed during the given year with penalty imposed and paid as shown: Yr Description of No. of Penalty (amount in Penalty paid failure or breach events Naira) Yes/No N/A None Failure to pay None agreed lease fee Failure to Achieve Covenanted GMT
N/A
None
None
Part IV: Contract Variations
Contract Clause No. N\A
Description of Variation N\A
Date Variation came into effect N\A
Process followed for validation of disclosed information [State the process followed for checking data for accuracy before proactive disclosure] Yes/No Date Review and Sign-off by the ICRC 2017
