In view of President Muhammadu Buhari’s sustained efforts to attract foreign investments (FDIs) into Nigeria, it has become imperative for the various agencies of the federal government to key into this drive for investments by speeding up their interventions to settle the feud between the Korean shipbuilding giant, Samsung Heavy Industries Nigeria (SHIN/Samsung) and Lagos Deep Offshore Logistics (LADOL).
Since the relationship between SHIN and LADOL went sour, a number of Federal Government agencies like the Nigerian Ports Authority (NPA), Nigerian Export Processing Zones Authority (NEPZA), Nigerian Content Development and Monitoring Board (NCDMB), Department of State Services (DSS) and other agencies have made positive interventions.
These agencies have been working behind the scene to resolve the dispute in view of the reputational damage it had done to Nigeria.
NPA has recently taken a very bold step to resolve the feud in a win-win situation by leasing a total of 11.2426 hectares of the land (where SHI-MCI FZE yard is located) at the LADOL free zone to SHI with a view to protecting the company’s investment at the base, according to a report by Vanguard Newspaper on January 22, 2020.
With the signing of this new lease with NPA, SHIN is now assured of the security of its investments, and this will incentivise it to deploy its advanced technology from its parent company, Samsung Heavy Industries Korea to enable Nigeria to compete with the global leaders in shipbuilding industry.
Nigeria will no doubt reap huge economic benefits as advanced shipbuilding technologies from Korea can be deployed to Nigeria.
The carving out of a free zone to SHIN will help Nigeria to own a specialized free zone that can compete with other free zones in the world, thus making Nigeria a global leader in the market.
Indeed the direct lease to SHIN is a blessing to Nigeria as the country’s name will soon appear in the global map of shipbuilding giants by the time the deep-pocket multinational brings in its technology.
However, oil and gas industry operators have raised concerns that the separation will hurt LADOL’s finances adversely because the huge revenues it has been deriving from SHI will stop to flow.
The LADOL Free Zone is already facing a critical situation with its future uncertain as a result of the feud with SHIN, which is its biggest partner with the biggest investment in the entire zone.
LADOL has been struggling to survive the crisis by approaching smaller players for partnership but it is doubtful if these small entities can help it to overcome its self-inflicted financial woes.
Many industry players believe the crisis facing LADOL was self-inflicted because of the company’s unethical and hostile attitude to its partners, which scared potential investors.
In all its dealings with its partners, LADOL was said to have priotised profits instead of encouraging investments in the zone.
Free zones belong ultimately to the Federal Government and the Government, through its agencies, is at liberty to ensure that the zones are utilised optimally for the benefit of Nigeria by using them to attract investments, creating employment opportunities, curbing the monopolistic tendencies of some free zone managers and boosting the Nigerian economy.
The partnership between SHIN and LADOL started when the two companies entered a joint venture and established SHI-MCI FZE. In turn, SHIN was able to build a fabrication and integration yard at the LADOL free zone in Lagos for the integration of around $3.0 billion Floating Production Storage Offloading (FPSO) unit.
The FPSO was built by SHIN in South Korea for the 200,000 barrels oil per day capacity Egina oilfield being operated by the French oil giant, Total.
The fabrication and integration yard was the first ever such yard in sub-Saharan Africa.
But as soon as SHIN completed the fabrication and integration of the FPSO and the facility sailed to the Egina oilfield, LADOL took steps to sack SHIN and SHI-MCI FZE from the yard so as to appropriate the investments of the Korean giant and this fueled the feud between the two companies.