Multi-dollar Badagry port signals major shift for large vessel repair

Promoters of the Badagry Dockyard Limited say the multi-billion dollar project is capable of operating in consonance with globally acceptable shipbuilding, repair and construction yard standards to make a difference in Nigeria and Africa.

This is because, according to Laolu Saraki, project director, BSMEC, the Lagos road-show last year has established a credible roadmap for the project.

Consequently, Adrian Arnold, global director, Shipyard Royal Haskoning, is of the opinion that the new dockyard will require a harbour for two principal reasons.

First is to create an area of tranquil water necessary for shipyard operations, and then to provide a protected length of marine access to enable a vessel entering the harbour safely.

Arnold observes that the Badagry Port has been sited at the optimum location along the coast with respect to bathymetry and wave climate.

He further said that for the sizes of vessels visiting the dockyard, the protected access will be of the order of 1,500m long to a turning circle about 600m in diameter. Thus the dockyard will need breakwaters and a dredged channel to form a harbour of the scale planned for the Port.

Y.K. Kim, Senior Vice President, Hyundai Heavy Industries, (the world’s No1 shipbuilder with 15 percent market share of the global shipbuilding industry) and Y.S. Kang of Samsung, which is a leader in the high-tech said, ”HHI and SHI are proud to be one of the promoters of the project for the development of a world class ship repair and engineering facility in Nigeria.”

Some analysts put the cost of the Badagry Port breakwaters and channel at about $400 million.  Therefore the cost of a greenfield harbour in sub-optimal conditions will be of the order of perhaps $450 million.

In Roylal Haskoning’s LNG Shipyard feasibility study business plan, an allowance was made for $150million CAPEX contribution to the Badagry Port breakwaters to cover the cost of the main breakwater modifications attributable to the shipyard.

The land area of the shipyard in the feasibility study base case was 72 ha which ideally for Badagry Dockyard’s plans would be increased to about 110 to 120 ha.

Saraki further explained that for Badagry Dockyard to be able to support a breakwater CAPEX of three times that in the business plan, the revenues would have to triple and the land required to achieve it would be commensurately greater, up to perhaps 300 ha.

The dredged channel depth planned by Badagry Port will enable the shipyard to attract deeper draft higher premium vessels than any other locations in Nigeria.  The cost of providing and maintaining this depth of channel purely for a shipyard at a greenfield site would be onerous.

“APMT’s intention as the landlord in the Badagry Port is to allow the tenants to develop their sites on a standalone basis.  This means that for services and utilities the tenants will be free to make their own arrangements on a market driven basis, without an obligation to purchase from the landlord.

In the longer term, APMT considers it logical for tenants, if they so wish, to use their combined purchasing power to develop common sources of services such as a power station.

The implication is that the landlord will only provide the common infrastructure such as access roads and the harbour breakwaters.  Each tenant will develop their own facilities such as quays and cranes.

The lease terms will be arranged to be in line with the operational life of these assets, which will exceed 25 years. Other tenants at the Badagry Port will add to the demands for services creating an economy of scale which should benefit Badagry Dockyard.”