WALE AKINSELURE, speaks with Director, South West Zonal Coordinating Office, Nigerian Shippers’ Council, Ibadan, Mr Glory Onojedo, on why takeoff of the Ibadan Inland Dry Port in Olorisa-Oko is delayed, the 15 percent equity demand of the Oyo state government as well as fears that Oyo state may lose the project.
The Minister of Transportation, not long ago, had a meeting with Governor Seyi Makinde, in Ibadan, with regards to the Ibadan Inland dry port project. Some concerns warranted that meeting, what were those concerns?
There were really no concerns regarding the Ibadan Inland Dry Port. For a Public/Private Partnership project, there is a requirement that upon having a preferred bidder, we should go into negotiation. But in the course of the negotiation which was basically between the federal government, on the one hand; the Oyo state government, on the other and the preferred bidder which is China Railway Construction Corporation (CRCC). In the course of the negotiation, some matters came up which, as it were, the officers representing the Oyo state government could not take a decision on. So, it was necessary for the Honourable Minister for Transportation, Rt. Honourable Rotimi Amaechi to meet with His Excellency, Governor Seyi Makinde for them to look at those areas and resolve them. This basically centres around the equity participation of the Oyo state government in the project. In addition, some infrastructure that the state government will be required to provide which include access roads, electrification and general security. These were the matters that made the Honourable Minister to visit Governor Seyi Makinde at that time. They are not serious matters that should agitate the minds of any of the parties that could threaten the project. When the Honourable Minister met with His Excellency, Seyi Makinde, these matters came up and they were amicably resolved to the benefit of all the parties. The Oyo state government, of course, is taking off 15 percent equity in the project and as at the time the Minister was meeting with Governor Makinde, one of the access roads had already constructed and even commissioned, that is, the Moniya-Iseyin road. It was even dualised up to an extent and thereafter the road was paved with bitumen. So, even regarding infrastructure, the Oyo state government had already started providing it all for the benefit of the Inland Dry Port. There are two other access roads that the Oyo state government accepted to do. These are the road from Olorisa-Oko to old Oyo road and the one from Olorisa-Oko (Moniya axis) to the Ibadan-Oyo express road.
There are notions that the 15 percent equity provision by the Oyo state government is delaying the takeoff of the project and that if this continues the state might lose the project to Ogun state.
I am not aware of Oyo state losing the project. However, when the Minister visited, he did say that there has been overtures to him from other states particularly Ogun state requesting a project or this particular project be moved to the state. It was merely overtures. That Oyo state will lose this particular project has not come up anywhere. It was merely Ogun state soliciting that if the Oyo state government is not showing enough interest then they will be willing and ready to have the project. Since then, Oyo state has been very true and committed to its own side of the bargain. Yes, Oyo state government will hold 15 percent equity in project.
I am aware that when the Minister met with the governor, there was a conversation about Oyo state providing the 15 percent equity in form of infrastructure not cash. Has there been an agreement on the terms of the 15 percent equity participation of Oyo state in the project?
Yes, that matter came up and it was actually one of the things that made the Minister to come out that they will rather use that money to provide infrastructure. When you own 15 percent of the project, it means that if there is a loss or profit, all parties bear it. That means Oyo state government will be entitled to 15 percent of dividend declared. But, that is not an issue for parties, in this case, federal government, Oyo state government and preferred bidder to look at, that is purely an issue for the promoters to look at. If Oyo state government is taking 15 percent and the other 85 percent is going to some other parties, including CRCC, it is when they meet as promoters or equity holders forum that they will decide on how each party will make good their equity participation. It is not a matter that should come up during negotiation. The negotiations are on and I will take it that the meeting between the Honourable Minister and His Excellency should be the concluding stages of that negotiation. So, all the matters that were negotiated and agreements reached will all be put into a Concession Agreement. That Concession Agreement is currently being drafted that will capture all the resolutions and decisions reached.
Talks about this project in Olorisa-Oko began in 2018, what do think of notions that the takeoff of this project is being delayed?
I do not want to subscribe to that notion or belief that the takeoff of the project is being delayed. For a Public/Private Partnership (PPP) project, there are stages and phases. After the negotiation, the concession contract will be drafted, and a Full Business Case (FBC) will also be produced. The Full Business Case will go to the Infrastructure Concession Regulatory Commission (ICRC), which is the body that regulates PPP. If ICRC looks at FBC and is satisfied that it meets all the necessary requirement, they will grant a No-Objection or Compliance certificate. Once that is done, the Full Business Case, Concession Agreement together will other documents will all be transmitted to the Federal Executive Council (FEC) for the final approval from the federal government. Mind you, it is a federal government project and it is only the FEC that can approve the project. All the things that are being done till the time are all prelude to the FEC approving the project. But, of course, you can be sure that FEC will approve because all the compliances will have been obtained like the Outline Business Case Compliance, Full Business Case Compliance, the Environmental and Social Impact Assessment. All these things have been done in the past but all these documents will be put together and taken to the Federal Executive Council and once the FEC gives it final approval, the next thing will be to do the Turning of the Sod or Groundbreaking where the concessionaire will be taken to the land and that will signal the commencement of construction work. For this type of project, all this work is being done in the background. Apart from occasional talking to the press or the public, so much work is being done in the background which will ultimately culminate into the time when the contractor will be taken to the site. It is at that stage that most stakeholders will know about this project because right now, work is being done but there is nothing to show because the site has not been cleared, the concessionaire is not at the site so the natural feeling is that there is so much delay but the truth is that work is being done in the background.
Some form of politicking usually goes into decisions on project. Are there circumstances that could make Oyo state lose that project to another state?
I don’t want to speculate on what could make Oyo state lose that project. I must say that that a PPP project is not a political project. It is purely an economic project. That is why there are rigorous stages leading to the final approval of the project. The Business case is done to ensure that the project is sustainable not just profitable. A business case will look at all the risks: economic, market, commercial and political. This project has gone through the business case study and a Compliance has been issued. There has been a procurement process and it was advertised locally and internationally. The opening of bids, selection of preferred bidder was done in an open, competitive and transparent manner, with civil societies witnessing the opening, compilation and selection processes. It is not individuals that are subscribing, it is the state government. So, whether it is Peoples Democratic Party (PDP) or All Progressives Congress (APC) in power, Oyo state remains an entity; Oyo state government remains a body recognised by constitution of the Federal Republic of Nigeria, it has nothing to do with the party in power at the time. But, if tomorrow Oyo state says its land is no longer available for this project then the federal government will have to look for a land elsewhere. If for example the designated land experiences natural transformation, like erosion, major flooding, then that will be a major threat. But other than that or absence of land, I can hardly think of any other reason. I will only advise the Oyo government to continue to give all the support and assistance and ensure they monitor the progress that is being made regarding the project.
With the planned Ibadan Inland Dry Port at Olorisa-Oko, does that confirm the abandonment of the Erunmu project?
Erunmu Inland Container depot has not by the federal government. In fact, the federal government is still committed to that project. But, the concessionaire has vacated the site for a long time. It was a PPP project and a concessionaire was appointed to do the construction work and operation. It is the concessionaire that has exited the site and construction work has stopped for some time but the federal government is still committed to that project.
Is it fair on the people of Erunmu that their own project has been abandoned and, in the same state, a similar project is about to be done?
I must say that the amount of cargo that comes to the South West is so much that even one Inland Dry port may not even have the capacity to take it up. The capacity of Erunmu is 50,000 TEUs which is 50,000 20ft equivalent unit container while Olorisa-Oko is 80,000. But, simply pay a visit to Lagos, you will see bonded terminals springing up everywhere. This is because the containers need a place to be stacked or kept. I can tell you than even the 80,000 TEUs of Olorisa-Oko will soon reach full capacity. So, there is no reason why you cannot have both Erunmu and Olorisa-Oko existing side by side in Oyo state.
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