Apapa Container Terminal concession

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In October 2005, the Nigerian Bureau of Public Enterprises (BPE), the privatization agency, signed a 20 year concession with A.P. Moller Apapa Terminal Ltd., a subsidiary of Danish AP Moller - Maersk Group, to operate, rehabilitate and maintain the container terminal at Apapa port. The port was Nigeria's largest port and contained a number of wharfs. A range of commodities were handled at Apapa, including dedicated facilities for the discharge and loading of wheat, cement, oil, petroleum, fish, dry cargo and containers. The container terminal was located at the Third Apapa Wharf extension and covered an area of 44 hectares. The terminal's maximum capacity was 22,000 TEU. A.P Moller Finance SA won the concession contract through a competitive tender by offering the highest bid for lease and royalty fees with a present value of US$1.061 billion (N141.11 billion) for the concession period. The net present value was calculated considering a discount rate of 10%, used by the government in the tender to compare bids. In addition, A.P Moller Finance SA agreed to pay a US$10 million entry fee and US$15.4 million for the terminal’s moveable assets at the time at the contract signing. A.P Moller Finance SA also committed to invest, modernize and expand the container terminal capacity according to its development plan. The development plan was expected to amount to some US$239.46 million in present value terms. BPE qualified ten bidders to submit bids for the container terminal concession tender, which took place in February 2005. Of them, five bidders submitted offers. In addition to A.P Moller Finance, those bidders were International Container Terminal Services Inc with a bid price of US$202 million, Hutchinson Ports Holding with US$120.3m, PSA International with US$85.1m and International Terminal and Logistics Operators at US$60m. At the time, A.P Moller Finance was selected as preferred bidder and International Container Terminal Services Incorporated as reserved bidder. In April 2005, A.P Moller Finance was declared the winning bidder, and it negotiated the final contract with BPE between April and October 2005. A.P Moller Finance S.A took over the operation of container terminal concession in March 2006. It created the local company SPV APM Apapa Port Terminal Ltd. to operate the facility. It would operate the terminal for 25 years after which the terminal management would revert to the Federal Government. Under the concession contract, Apapa Container Terminal was to operate as a common-user facility. The port charges were expected to fall by 20-30 percent, but no time line was publicly disclosure on such charge reduction. The concessioning of Apapa’s container terminal was part of a port reform program, which included the other terminals at Apapa’s port. With port reform Nigerian Ports Authority (NPA) became responsible for monitoring the terminal operators under the landlord port model. In 2011, it was reported that APM Terminals had already invested 190 million dollars in infrastructure, equipment and training at Apapa. It announced in December 2011 that it was to invest another 135 million U.S. dollars. The terminal handled 485,000 TEU in 2010, and was projected to handle 600,000 TEU in 2011. In 2011, in fact, it was announced that throughput had increased to 650,000 TEU. In 2013, APM Moller-Maersk stated that the fresh investment of US$135 million was to make the Apapa terminal the largest in West Africa, with a capacity of 1.2 million TEU. Capacity is 22 thousand TEU? Updated to 600.000.