Yemisi Izuora
Potential investors in Nigeria’s free zones, are now nervous following action by Global Resources Management Limited (GRML), a subsidiary of Lagos Deep Offshore Logistics (LADOL), to sack Samsung Heavy Industries (SHI) Nigeria Limited from the the LADOL free zone in Lagos, investigation has revealed.
SHI operates a fabrication and integration yard (SHI-MCI yard) in LADOL free zone, which was used to integrate the Egina Floating Production Storage Offloading (FPSO) vessel, which has sailed away to the 200,000 barrels per day Egina oilfield.
The SHI-MCI yard is a joint venture between LADOL and SHI with SHI having 70 per cent stake and LADOL 30 per cent.
The yard is the only one of its kind in Africa, designed to make Nigeria a hub of FPSO fabrication in the continent.
Oriental News Nigeria learnt that SHI will lose over $300 million of investments if sacked from the island as it will be difficult for the Korean firm to remove the fixed assets in the yard, and that to evacuate the fixed assets would require dredging of the river, which will gulp millions of dollars.
Our investigations also revealed that LADOL has denied SHI workers access to the integration and fabrication yard since Monday, a development that has sent wrong signals to international investors on the risks involved in investing in Nigeria’s free zones.
Our correspondent, who visited the LADOL jetty in Masha Place in Ademola Street Ikoyi Thursday saw several Nigerian workers of SHI who were stranded at the gate because they could not be allowed entry to the island to resume work at the yard.
Some of the workers who spoke to journalists that witnessed the incident, said LADOL’s actions will prevent potential investors from investing in Nigeria’s free zone.
“President Muhammadu Buhari is in China to woo investors but a company like LADOL is frustrating his efforts by chasing investors away. The president is in Asia with a strong delegation of governors and ministers when another Asian investor is being denied access to its investments. How do you convince other investors that Nigeria is safe for investments? How can foreign investors come to Nigeria’s free zones when they see what is happening to Samsung?” the worker queried.
He alleged that the free zone is an investor hostile location as they use their private free zone status to the detriment of enterprises.
“The policies and abuse of power exhibited in the LADOL Free Zone by its operators, LADOL and GRMFZC, are against the federal government’s initiative on ease of doing business in Nigeria. This is to the detriment of Nigeria. LADOL has already killed the operations of a number of enterprises by pushing them away. Apart from Samsung, other International companies have gone underground due to LADOL’s actions. When the companies invested in the free zone, LADOL will use one excuse or the other and will not renew their licence so that they abandon the investments,” he explained.
Another SHI worker who spoke to journalists said it was SHI that brought LADOL to national limelight with the fabrication and integration of the Egina FPSO in the free zone.
“LADOL used to be a deserted logistics base without much activity away from Onne, Rivers State and Bayelsa State. However, with hard work of Samsung Heavy Industries as the Contractor to Total for the execution of the Egina Project and its success story, LADOL has received more attention than it deserves. LADOL is only a logistics operating company with a Private Jetty. LADOL does not have a Port or a fabrication and integration yard. LADOL advertises and leverages on Samsung’s Fabrication and Integration yard as if it is owned by LADOL,” the worker added.
“We suspect that LADOL’s ultimate goal is to take over Samsung’s fabrication and integration yard by any means possible. The refusal to renew SHI-MCI’s Operating licence is one of the steps LADOL has taken to achieve its goal. Blocking us from going to work as you can see this morning is the second step. LADOL lures investors into the LADOL Free Zone with investor friendly incentives. However, once the enterprise commences operations, LADOL issues directives to frustrate the enterprise’s operations,” he added.
The third SHI worker who spoke on the issue alleged that “LADOL’s mis-representation in the media has gone overboard and did not expect that LADOL’s lies and mis-information of the public would go this far to the extent that they claim that LADOL partnered with Total to execute the Egina Project. LADOL is trying to attract local and foreign investors by claiming in the media that it is a major stakeholder in the Egina Project which is not the case. It is unethical to misrepresent the true state of facts to the public and LADOL’s actions are a clear indication of how far they can go to achieve their ultimate goal”.
Investigation revealed that LADOL’s grouse was that SHI was dealing with NPA, NCDMB and other regulatory agencies instead of dealing with LADOL.