executive summary 2015 - deep sea port by broad spectrum ind serv ltd (autosaved)

Executive Summary for the Construction of Deep Sea Port, Super Highway & Development of Mechanized Farming at Calabar Cross

River State by Broad Spectrum Industrial Services Ltd

Investor Brief-Executive Summary for the Construction of Deep Sea Port, Super Highway & Development of Mechanized Farming at Calabar, Cross River State by Broad Spectrum Industrial Services Ltd. (BSIS)

2015

9/25/2015

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[EXECUTIVE SUMMARY FOR THE CONSTRUCTION OF DEEP SEA PORT, SUPER HIGHWAY & DEVELOPMENT OF MECHANIZED FARMING AT CALABAR CROSS RIVER STATE BY BROAD SPECTRUM INDUSTRIAL SERVICES LTD] September 25, 2015

Table of Content

S/N DESCRIPTION PAGE1.0 Executive Summary 3-51.1 Introduction 6-71.2 Vision 71.3 Mission 72.0 Project Description & Justification 72.1 Project Description 7-82.2 Project Justification 93.0 Description of Project Site/Location 104.0 Alternative Option for the Project 10-145.0 Project Investment Cost/Concept of Financial Structure 156.0 Capital & Operation Cost Estimates 16-187.0 Benefits of Deep Sea Port Facilities 18-197.1 Direct Benefits 18

7.1.1 Cost Saving 187.2 General Cargo Vessels 187.3 Petroleum Product Vessels 197.4 Fisheries Vessels 198.0 Project Phases 209.0 Project Incentive, Security/Backing 21

10.0 Project Investment Opportunities 2111.0 Financial Projections 22-2411.1 Key Assumptions 22-2412.0 Economic & Financial Viability 2413.0 Assessment of Nigeria Ports 25

Appendix 1 Ten (10) Years Projected Cash Flow 26-2914.0 Conclusion 30

Appendix 2 Super Highway 31Appendix 3 Deep Sea Port 32Appendix 4 Fully Mechanized Farming 33

2 | P a g e I n v e s t o r B r i e f - E x e c u ti v e S u m m a r y P r e p a r e d B y : C o n s e r v a ti v e I n v e s t m e n t L t d : F i n a n c i a l C o n s u l t a n t s & M a n a g e m e n t A d v i s o r y


1.0 Executive Summary

COMPANY NAME: Broad Spectrum Industrial Services Ltd(Core-Investor & Technical Partner)

RC NUMBER: 410547

YEAR OF INCORPORATION: 2001

PROPOSED PROJECT SITE: Calabar, Cross River State of Nigeria

OPERATIONAL OFFICE: 14B, Thaba Tseka Street, Ademola Adetokunbo Crescent, Wuse 11 FCT, Abuja, Nigeria

WEBSITE/E-MAILS: www. (in-view)/[email protected]@gmail.com

TOTAL PROJECTCONSTRUCTION COST LAY: US$2.427Billion (Two Billion, Four Hundred &

Twenty Seven Million U.S. Dollars)

CORE VALUES: Financing the execution of three (3) major projects identified by the Cross River State Government. The Projects which include:-

A) The construction of 260km super high way containing six (6) lanes and street lighting (Financial Cost US$700Million)

B) Construction of 1.2km Deep Sea Port (Financial Cost US$1.3Billion)and

C) Development of mechanized farming/design, fabrication of plants/machinery(Financial Cost US$300Million)

(BSIS) CONTACT PERSONS 1. Michael Le Havre (CEO) and2. Kenneth E Allen (MD)

CONTACT PHONES: +4475 502 89 502, +234 808 300 6303, +234 809 426 4043

MILESSTONES ACHIEVED: Memorandum of Understanding duly signed with the Government of Cross River State

STATE GOVERNMENT COMMITMENT:

To provide the Core-Investor & Technical Partner with US$25Million (Twenty Five Million U.S Dollars) only as a local Bank Guarantee. This is to take


mailto:[email protected]

mailto:[email protected]


care of pre-construction cost such as Environmental Impact Assessment (EIA), Design, Feasibility/Viability Study Report, Bill of Quantity Engineering Drawings, etc.

The objective of this report is to provide the conceptual designs for the roads and utilities and primary infrastructure for the Calabar Deep Sea Port based on the updated land use Master Plan which was presented and discussed with the Cross River State Government and stakeholders.

The unique characteristics of the project is to create job opportunities for the State, alleviate poverty, and economic empowerment and enhanced revenue generation to give Cross River State a New City the special natural ambience character based on the proposed land use plan.

The Core-Investor & Technical Partner along with their other reputable foreign partners has expressed interest in financing the execution of the three (3) major projects identified by the Cross River State Government which include among others:-

A) The construction of 260km super high way containing six (6) lanes and street lighting,

B) The construction of 1.2km Deep Sea Port and

C) The Development of mechanized farming/design, fabrication of plants/machinery.

Nigeria is the most populous country in Africa and the seventh most populous in the world. Its population is expected to grow from 170 million today to over 440 million by 2050. This has grave implications for the country’s food security situation, given that it is heavily dependent on food imports. If global food price were to spike and drive up the price of imports, as they did in 2007-2008, Nigeria would struggle to feed its populations.

The Core-Investor & Technical Partner is offering a revolutionary way of a fully mechanize farming and International Academy training Institution Centre which include among others: Poultry farming, Dairy Farming, Aquaculture Fish Production Farming, Planting & Seeding of Soya Beans, Maize, Tomatoes, Pepper and Varieties of other Vegetable types, Cow/Goat Slaughter House, and Irrigation and Water Infrastructure that will have a tremendously positive economic impact on Nigerian’s livelihood and that of most of West Africa and potentially the world. Broad Spectrum Industrial Services Ltd will be ensuring that these same resources are employed to plant, cultivate, and harvest the incredibly resilient and super‐productive in quantities that can significantly reduce



hunger in West Africa, create thousands of high‐quality, enduring jobs, and provide outstanding profits and returns to the farmers and investors of this project.

The construction of 260km super high ways containing six (6) lanes and street lighting, building three toll gates and the construction of 46 overhead bridges.

The goal of the tolling traffic and revenue study super highway is to provide a “sketch-level analysis, a high-level investigation into revenue potential.

The project will construct a new alignment six-lane freeway, parallel to existing highway.

Highway tolls can provide a new, stable and dedicated source of funding of highway infrastructure. By applying the ‘user pays’ principle, governments can direct scarce budget resources elsewhere and the highway user pays for the service offered by the highway in the same way that railways, pipelines, power grids, water, broadcasting and broadband networks are paid for.

Potential consequences of tolling include the uncertainty that toll revenues will be sufficient to cover all the costs of construction, maintenance and operation (revenue risk). Toll highways are rarely self-financing, often still requiring substantial public subsidy and may create long term liabilities for governments. High toll tariffs can result in diversion away from the highway onto less suitable routes, resulting in the loss of some of the potential economic benefits of the highway accruing from improvements in travel time reliability, time savings, vehicle operating costs and highway safety.



1.1 Introduction

Broad Spectrum Industrial Services Ltd, the Core-Investor & Technical Partner is a duly registered company with the Corporate Affairs Commission, Abuja RC: 410547 with the aim of carrying on various aspects of initiating project financing, energy and power, civil engineering, designs and agriculture.

The Cross River state Government recently conceived the idea of developing and construction of a deep sea port, 260km super high way containing six (6) lanes and street lighting and development of mechanized farming/design, fabrication of plant/machinery in the coast line of the State.

The projects are proposed to be private sector driven with the state owning 30% equity on each of the projects before repayment of project finance cost while Core-Investor & technical Partners owns 70% i.e 50% is for project finance repayment while 20% is equity ownership. Upon full repayment of project finance, the Cross River state Government shall own 80% equity while the Core-Investor & technical Partners shall retain 20% equity in all the projects.

The project focuses on promoting International Trade, Transit Trade, Bonded Storage and Export processing as well as other ancillary businesses including Banking, offshore Finance, Insurance, Futures Market, Commodity Exchange, Wharf Management, Haulage, Forex Operations, IT and other related businesses.

For the realization of a highly efficient and automated seaport container-handling system, we have focused on an automated guided vehicle (AGV) transportation system. We proposed a design methodology to find the appropriate number of operating machines required for container handling.

Broad Spectrum Industrial Services Ltd, the Core-Investor & Technical Partner has signed an agreement with the Government of Cross River State to undertake various projects which includes the design, funding arrangement, construction, management and operation of a Deep Sea Port in Calabar; super highway; mechanized farms; etc.

Broad Spectrum Industrial Services Ltd (BSIS) is seeking funding from Global Investors/Funding Solutions Providers in order to realize this project.



In conformity with the requirements of the environmental legislation, an Environmental and Social Impact Assessment (ESIA) for the project is accorded top priority. The environmental and social impact assessment (ESIA) of the said project will be undertaken in compliance with the legal requirements of Nigeria, International policies and procedures and the performance standards of the International Finance Corporation (IFC). In accordance with International environmental and social requirements, the ESIA examined the physical, biological and socio-economic aspects and their impacts, upon which the ESIA recommended several mitigation measures. The ESIA summary of the aforementioned project will be presented in due course

1.2 Vision

To be the large cargo port of choice in the West Africa Sub-region that provides investors with an unmatchable business ambience.

1.3 Mission

To provide world-class State of the Art facilities, highly attractive incentive and focused business support services in a safe and conducive environment that offers opportunities for all Stakeholders to thrive and flourish. 2.0 Project Description and Justification

2.1. Project Description:

The project consists of construction of 1.2km Deep Sea Port, construction of 260km super high way containing six (6) lanes and street lighting expanding the existing facilities of the harbor in order to enable large container carriers to enter the sea port of Calabar and to subsequently distribute these containers to neighboring countries and States on feeder ships. The third aspect of the project is the development of mechanized farming/design, fabrication of plants/machinery.



The following images show the site intended for this project (see Figure 1).

Figure 1

Broad Spectrum Industrial Services Ltd (BSIS) plans to build and operate facilities, which would include a dock with several berths, and to build a large area intended for container storage, within the framework of a Concession Agreement which binds it to the Government of Cross River.

The project will be executed in the main stages described below. - The pre-construction stage, during which subsurface studies, oceanographic, feasibility and viability studies, and environmental impact assessment will be undertaken.

- The construction and installation of facilities stage: targeted construction and development sections of the project will be carried out in a progressive manner over the following three phases:

Phase I Land-facing wharf wall, 750m long, with three berths; Sea-facing wharf wall, 1,025m long, without facilities; Land-facing area for storing containers: 160,000 m²; and Depth of water in the dock, the harbour basin and the access channel: –14.60m z.p.

Phase 2 8 | P a g e I n v e s t o r B r i e f - E x e c u ti v e S u m m a r y P r e p a r e d B y :

C o n s e r v a ti v e I n v e s t m e n t L t d : F i n a n c i a l C o n s u l t a n t s & M a n a g e m e n t A d v i s o r y

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Land-facing wharf wall, 1,050m long, with three berths; Sea-facing wharf wall, 1,315 long, without facilities;

Phase 3 Land-facing area for storing containers: 220,000 m²; and Depth of water in the dock, the harbour basin and the access channel: – 16.60m z.p.

2.2. Project justification: This is in line with the Federal Government of Nigeria sectorial policy of economic diversification from crude oil, the major strategic objectives of which are:

- To increase the port’s capacity and to create an international commercial, efficient and competitive port in Nigeria; - To harness the natural, nautical and geographical resources of the State coast;

- To increase maritime transshipment and transit trade with landlocked countries (like Central Africa Region, Niger, Chad, and others); - To have a good shipping service with regular trade vessels, particularly container carriers, with adequate frequency to reduce waiting times and costs.

The proposed Calabar sea port is projected to become a dry and liquid cargo gateway for the vast central and eastern Nigerian markets and beyond. Development and subsequent operation of the port will generate substantial economic activity in the region.

The Calabar Deep Sea Port will have the following unique features:-

Requires little dredging to accommodate large ocean going vessels;Located in the oil rich region and would serve the oil companies and oil service companies located within the region;Easy access to the oil rich Gulf of Guinea;Proximity and centrality to deep offshore operation & West Africa region, Sao Tome, Central Africa, Equatorial Guinea, Cameroon, and Angola;Could stimulate industrial mercantile and tourism activities;Development of infrastructure to support oil and gas exploration, shipping industries and international trade within a free trade zone framework;The synergy so generated would be used as a vehicle for rapid development;



Employment of a strategy that balances rapid industrialization/economic growth with environment protection.

3.0 Description of Project Site/Location

Calabar, eastern Nigeria's main port, is situation 83kms up the Cross River in the Niger delta. Nestled in the far south east of Nigeria, Cross River State is Nigeria's frontier to Cameroon, Sao Tome, Equatorial Guinea and beyond.

The proposed Calabar seaport will have an array of modern facilities for export and import trade. It enjoys direct road link with the middle belt and the north-eastern parts of the country. Its facilities include 860m quay length and 35,000 sqm of stacking area.

The port channel is 7m deep and is being dredged to 9m and 13m draught, at turning basin and quay side respectively. This will allow vessels of 170m and between 10,000 and 15,000 dead weight to steam into the port without hindrance.

Its location on the south-eastern extremity of the country, almost entirely isolated by rivers, warrants the maintenance of good network of roads.

The two major road transportation arteries are the East West lkang Calabar ltu Road and the North South Calabar lkom Yola road. However, parts of both highways have fallen into a severe state of disrepair on account of lack of adequate maintenance.

It is vital that both roads be rehabilitated and in fact dualized. The road network runs directly through the commercial city of Aba through to Onitsha, Nnewi and Enugu.

Distances are as follows:

Aba - 125 km Onitsha - 280 km Enugu - 285 km Nnewi - 270 km



The Cross River towns have good intercity transportation (taxis, buses, motorcycles), in addition to a good system of intercity and inter local government area transportation.

4.0 Alternative Options for the Project

There are no alternate sites available in Calabar for this project. The construction of a new harbor at a different site will impact much more harmfully on the environment, considering the area required and the extent of the construction needed to be undertaken. The super highway has been carefully mapped to avoid any disruption of the natural biodiversity and ecosystem.

Potential impacts and measures for mitigation and enhancement

The project activities will be a source of impact during all the phases (pre-construction, construction, operation and end of project). During the construction phase, activities will include construction of sand barriers, stripping the soil, raising the site, compacting the soil, sealing the soil, filling the beach and deepening the existing harbor basin and access channels.

During the operational phase, activities will include increased maritime traffic, increased land port activities and development and operation of the terminal.

During the end of project phase, activities will include continuation of maritime traffic, continuation of land port activities, development and operation of the terminal, as well as upgrade activities of various types, and repairs to e.g. wharf walls.

Negative impacts

Negative impacts on the various environments are potentially associated with the activities which will be carried out in the different phases of the project. These impacts and the measures for managing them are described below.

Noise pollution and atmospheric pollution

Most of the construction activities, for example compaction of the area, construction of wharf areas and of the infrastructure of the new harbour area including roads, buildings, workshops etc., cause noise and atmospheric pollution that will continue at various intensities during the construction period. This will increase noise and atmospheric pollution. The impacts caused by noise pollution and by the quality of the air will be limited to the periods of work.



If Option (A) (metal sheet-pile wall) is selected for construction of wharf walls, the hammering works will cause noise pollution which will be clearly heard by the riverside residents of the site for the duration of the 9 months that the operations continue. The inhabitants of the Calabar Port, and some other locations, to the west will be exposed to this impact. In compliance with Local Content requirements, none technical employment would be made to inhabitants, who would be supplied with protective gears to mitigate pollution.

Soil

The main impact will be the stripping of the top soil for the road construction which could impact the environmental air exchange as the natural vegetation is replaced by asphalt surfaces. This is mitigated by the strenuous efforts made to retain the natural park environment as is and also plant new trees on road embankments.

Water resources

The major risk concerns marine or underground water pollution by the chemical substances that will be handled in the construction and operation phases. Thus plans for management of these substances will be developed and implemented during these phases of the project.

Vegetation

Stripping of the soil in the pre-construction phase of the terminal will have a destructive impact on the biophysical environment, as it will lead to the destruction of some hectares of thickets and mangroves. A replanting programme is being developed in consultation with the appropriate institutions. The replanting programmes will at least double the areas which were cleared and ensure the success of the replanting. The other activities targeted in this programme consist of identifying the reforestation sites, information and awareness of the riverside populations of the sites, training in plant production techniques, follow-up and evaluation. A specialized NGO will be appointed for carrying out these tasks.

Fauna

Animal habitat will be affected directly by the construction of barriers and indirectly by the changes in the oceanic circulation regimes and the sedimentary dynamics related to it. More mobile species, such as fish, will be less affected as they will move to adjacent areas.



Socio-economic environment From the pre-construction phase (at the latest by the start of the construction phase) those people occupying the site of the facilities will be involved in the activities found in or carried out around it will be relocated from the site permanently or they will no longer be able to continue with the activities that they are currently involved in.

It is in this manner that a full resettlement action plans for the market gardeners and full resettlement action plans for the sand miners will be developed. The details on these plans are consolidated in the separate summary on the Resettlement Action Plans for this project.

The project has the potential of breaking social and cultural ties that characterize the populations in the area of the project. These ties have guided the populations in their economic and social activities, including sand collection, market gardening, harvest festivals etc. The break will be more serious if the population, due to the involuntary relocation, are not relocated to the same new locations and will no longer have their financial support systems, a shared culture etc. Positive impacts: National economy and local economy The most significant potential impact of the project is expected in the operation phase, during which the socio-economic benefits will contribute towards improving the national and local economies. The Cross River State and the city of Calabar will have supplemental revenues with the injection of the financing for the realization of the proposed projects. The employment mass will have important fiscal effects. There will be an increase in taxes due to the increase in revenues by each person directly or indirectly involved in the terminal activities.

Maritime services will be improved. The increase in revenues and incomes for the state and the concerned institutions will enable them to have additional financial resources to enhance existing infrastructure and services and also to realize other projects or initiatives which would contribute to the economic development of the State.

Construction and operation of the terminal will make room for new companies and commercial activities. This emergence will be accompanied by a great demand for staff to support their activities. There will be direct and indirect job opportunities during the construction phase and the operational phase. Small and medium enterprises and large enterprises will be created to



respond to the services and needs of the terminal. The additional incomes and salaries will benefit the national and local economies.

Job creation

The project prioritizes local recruitment. The recruitment of youths and women is also considered. Certain parts of the construction works will experience a need to employ local businesses and their staff, and this will require a considerable labour force. As skilled workers are available in large numbers in Calabar, most of these will be recruited on site. The project will result in the creation of direct employment opportunities (2,500 persons) and indirect employment opportunities (4,500 - 5,000 persons) during the construction phase. There will be permanent employment opportunities at the terminal (1,000 persons). Several associated and secondary jobs will also be required for such large projects that are carried out by such a large staff complement. Indirect employment opportunities (6,500 - 9,000 persons) will be created during the construction phase period.



5.0 Project Investment Cost/Concept of Financial Structure

The estimated proposed project investment cost amounting to US$2.3Billion will be used for the economic and financial return analysis including the investment options.

5.1 Concept of Financial Structure for the Deep Sea Port, Super Highway and Fully Mechanized Farming


DEEP SEA PORT LONG TERM DEVELOPMENT PROJECT COST

US$1.3bILLION

PORT FACILITIES

US$900MILLION

TERMINAL FACILITIES

US$400MILLION

TERMINAL FACILITIES & EQUIPMENTS

STRATEGIC PORT FACILITIES

NON- STRATEGIC PORT FACILITIES

PRIVATE PUBLIC PARTNERSHIP (PPP)

PRIVATE OPERATORS

CONSTRUCTION OF 260KM SUPER HIGHWAY WITH 6 LANE AND 46 OVER HEAD BRIDGES PROJECT COST

FULLY MECHANIZED FARMING PLANTS/EQUIPMENTS PROJECT


6.0 Capital and Operating Cost Estimates

Preliminary cost estimates have been made for the Capital and Annual Operating costs of the Deep Sea Port facility. Detailed estimates are presented (in United State Dollars) in Tables 2 and 3 respectively below.

These estimates are intended for initial planning purposes only and will need to be refined as the preferred design of the port facilities is selected. .

6.1 Summary

The development of an Integrated Port Facility within the harbor area of Calabar Deep Sea Port is considered technically feasible.

A number of options are available with respect to the type of marine structure that is proposed for the berth itself. For this assessment, and specifically in development of project cost, a caisson structure has been proposed as a viable option, but it is noted that a more cost effective design may be presented at future stages of project development.

The next phase of the project would be to progress all aspects of planning and facilities design to a feasibility level (or even to a detailed design level) of assessment, which in turn will provide a higher level of confidence in the capital and operating cost estimates for the project.

Table 2 Calabar Deep Sea Port Facilities:Base Capital Estimate and Total Capital Estimate


PRIVATE INVESTORS PRIVATE OPERATORSBUILT OPERATE & TRANSFER (BOT)


Item Unit Qty Unit Cost Cost in $Deepwater Berth Capital Estimate:Berth StructureStorage Yard Storage Shed Operations Bldg & furnishings Site Utilities Road Access "Canoe Passage" Bridge Land Pipeline upgrade Oil Transfer Arm Safety and oil spill gear Subtotal

Lump SumM2M2M2LS

Linear metre (LM)

M2L/MLSLS

20,000700100

1,600800

1,800

75750750

8502,500

750

$20,000,0001,500,000

525,00075,000

2,000,0001,360,0002,000,0001,350,0001,750,0001,500,000

$30,560,000

Deepwater Berth Equipment Capital EstimateMobile Crane (150 t capacity)Container Top Lift Truck (40 t Capacity) GC Handling Fork Lift Truck (12t) GC Handling Fork Lift Truck (5t) Container Fork Lift Truck (3t) Cargo Handling Gear (slings, ropes, shackles etc.) SubtotalDeepwater Berth Total Capital Estimate

LSLSLSLSLSLS

11112

1,500,000 500,000 170,000 85,000 60,000

$1,500,000500,000170,00085,000

120,000100,000

$2,475,000$33,035,000

Small Craft Harbour Capital EstimateRoad Access Causeway/BreakwaterBoat Mooring Floats Float Piling per pile Access Ramp Storage Areas Fuel day tanks and supply lines L/S Small Craft Harbour Total Capital Estimate Integrated Port Base Capital Estimate

L/ML/MM2

per pileM2M2L/S

2502757001690

10,800

8504,000 3007,500 450 50

$212,5001,100,000

210,000120,00040,500

540,000200,000

$2,423,000

$35,458,000

Port Facility: Base Capital, Environmental, Engineering and ContingencyBase Capital Cost Environmental assessment/regulatory approvals (@5 % of Capex) Engineering (@ 6% of Capex) Contingency (@20% of Capex)

Total Deep Sea Facility

$33,035,000

1,651,7501,982,1007,003,420

$43,672,270

Small Craft Facility: Base Capital, Environmental, Engineeringand ContingencyBase Capital Cost Environmental assessment/regulatory approvals (@5 % of Capex)Engineering (@ 6% of Capex) Contingency (@20% of Capex)

Total Small Craft Facility

$2,423,000

121,150145,380513,676

$3,203,206



Integrated Port Total Capital Estimate, with Environmental, Engineering and Contingency $46,875,476

Note- all costs are order of magnitude estimates only and will be refined at the final engineering stage

Table 3 Estimated Annual Operating CostItem General Cargo/

ContainersOil Products Fish

ProductsTotal

Projected Annual Cargo Volume (metric tonnes) Terminal Operating ComponentsEstimated. cargo transfer rate (metric tonnes/berth hr) Estimated Ship Discharge Time (hours/annum) Operational Efficiency (working hours/available hours) Estimated Effective Ship Discharge Time (hours/annum) Estimated Effective Ship Discharge Time (days/annum) On-site Manpower requirements per shift (number) Estimated cost per hour per man & equipment (dollars per hour) Estimated man & equipment hours per annum Estimated operating costs per annum

10,000

224550.83

545.4522.73

1485

7,636649,091

43,000

3501230.92

134.035.58

475

53640,208

8,400

30280

0.83336.0014.00

6

85

2,016171,360

61,400

$860,659

Other Terminal Costs

Terminal Facility Infrastructure Maintenance* Terminal Facility Equipment MaintenanceInsuranceOverhead & Management 1Total Other Terminal Costs

Capital Estimate

40,553,7703,118,500

43,672,27043,672,270

% of Cap. Est./yr

0.75%2.50%1.00%0.25%

304,15377,963

436,723109,181

$928,019

Base Estimated Annual Deep sea Facility Operations Cost Contingency (at 20%)

$1,788,678

$357,73618 | P a g e I n v e s t o r B r i e f - E x e c u ti v e S u m m a r y P r e p a r e d B y :

C o n s e r v a ti v e I n v e s t m e n t L t d : F i n a n c i a l C o n s u l t a n t s & M a n a g e m e n t A d v i s o r y


Estimated Annual Deep Sea Facility Operations Cost

$2,146,413

*Note- include Capital estimate of 33,035,000 plus contingencyNote- all costs are order of magnitude estimates only and will be refined at the final engineering stage

7.0 Benefits of Deep Sea Port Facilities7.1 Direct Benefits: 7.1.1 Cost Savings

Construction of deepwater sea port facilities at Calabar will have a major impact in the State while detailed estimates of costs and potential cost savings as a key element of feasibility studies, it is possible to provide an initial estimate of the cost savings to these three user groups: general cargo vessels/containers, oil products and fish products using the data outlined above in this section:

7.2 General cargo vessels:

For general cargo vessels, current ship days spent in port are calculated from the recent figures on average days in port, 4.1 days, and the average number of cargo vessels, 17 vessels annually. Overall, general cargo ships spend 70 days in port annually. It is estimated that with modern port facilities allowing for unloading through all phases of the tide cycle, reduced number of time handling cargo, a reduced level of cargo damage, and increased use of containerization, this could be reduced by almost 80%, to 15 days annually. In addition, general cargo vessels would save on the costs of lighter age (barging) currently required transporting cargo to the beach.

7.3 Petroleum Products Vessels:

Current annual ship days in port are 16 (an average of 4 vessels per year requiring 3.9 days’ average for transferring products).

It is estimated that through reduced transfer time as a result of more efficient procedures and reduced risk, this could be reduced by a factor of about 60%, to 6 days annually.

7.4 Fisheries Vessels:

Currently, fisheries vessels are travelling to ports in Newfoundland for unloading product resupply and crew change, which requires from 8 to 12 days for the return trip to port and back to the fishing grounds, depending on the location of the port. If an average of 10 days is used as the current number of days required, this could be replaced by a round trip of 4 days for



the projected minimum of 8 fisheries vessels visiting a port at Iqaluit an average of 3 times per season in the future.

The results would be very significant cost savings for fisheries vessels, increased fishing time and greater volume of catch where quotas are not currently being filled, and vastly increased visitation to Deep Sea Port by fisheries vessels (up from an average of less than 1 visit per year).

The initial estimate of cost savings for these three user groups, based on low and high estimates of operating costs per day for vessels, is presented on the following page. The costs estimates are calculated in real terms, that is, inflation has not been factored in at this point.

This initial estimate of costs savings suggests that there could potentially be a savings to these user groups of between $3.5 and $4.9 million annually. When this figure is compared to the project annual operating costs of port facilities, the indication is that there will be a reasonable potential for charging a level of user fees that will cover operating costs and provide for a viable operation, as well as a potential for reducing cargo and petroleum transportation costs. This would be a significant benefit for Nunavut, which has the highest cost of living of any jurisdiction in Canada. This does not take into account at this point additional user fees to be obtained from other user groups.

Estimated Cost Savings to General Cargo, Petroleum Products, and Fisheries Users from Construction of Deepwater Port Facilities

Item General Cargo Oil Fish TotalLow Range

High Range

Low Range

High Range

Low Range

High Range

Low Range

High Range

Current Annual Ship Days in Port or Transit Forecast Annual Ship Days at Berth or Transit Variance in Annual Port/Berth time or Transit Estimated Cost per Ship day Estimated Annual Ship Cost SavingsEstimated Lighter age cost per day Estimated Lighter age cost per annum

70

12

57.725,000

1,442,500

10,000

697,000

70

12

57.735,000

2,019,500

15,000

1,045,500

16

6

9.635,000

336,000

16

6

9.645,000

432,000

240

96

1447,000

1,008,000

240

96

14410,000

1,440,000

2,786,500

10,000

697,000

3,891,500

15,000

1,045,500



Total Annual Estimated Cost Savings

2,139,500

3,065,000

336,000

432,000

1,008,000

1,440,000

3,483,500

4,937,000

8.0 Project Phases Eight project planning phases are outlined in the main report to provide general guidance and timing for the overall Calabar Deepwater Port Project. Funding for this project should occur in stages to correspond with the project planning phases, which allows for effective cash management and gives maximum flexibility as port concepts evolve. The flowing planning phases and schedule for the project are described in detail in the main report:

Initial Project Planning/Scoping Consultation (Throughout the planning project) Deep Sea Port Plan and Feasibility Engineering Baseline Programs Final Engineering and Project Design Environmental Assessment and Regulatory Approvals Construction Operation and Monitoring

9.0 Project Incentive, Security/Backing

The Cross River State Government, as part of its equity contribution to the project shall: -

Provide the land with appurtenances in the selected communities for the execution of these projects.Provide adequate security of persons and properties for each allocated land where construction, deep sea port and planting shall be carried out.Ensure the continuous stability and provide an enabling environment to function effectively in the host communities.Secure/grant necessary approvals and permits that will lead to the commencement of the proposed projects.



Ensure that the relevant people in the host communities execute all the necessary land documents needed for the smooth operation of these projects.

10.0 Project Investment Opportunities

Deep Sea Port Development, Bonded Storage Warehouses, Logistic Companies, Service Companies, Airstrip Development, Helipad Development, Refineries and Petrochemical Companies, Machines tools and Equipment Fabrication Companies, Export Oriented Companies

11.0 Financial Projections11.1 Key Assumptions

Item Assumption Expense base 2015Business days per week 7 days Working days per month 30 days Capital expenditure (CAPEX) $2.3Billion United State Dollars



Professional/Consultancy fees, Bank Mgt/Processing fee and Financial Charges $126.5Million United State DollarsSecurity Assets of the business will be used as collateral Interest rate 3% Period of Debt 10 Years Expected yearly growth rate in revenue 10% Inflation rate 6.5% Tax Rate 30% Depreciation 10% Moratorium Period 2 YearsTolls Gates: three in NumberAverage number of Big Thriller per day: 7,000

2 trips per day @ N500.00 per toll gate fee

Average number of truck per day: 5,000

2 trips per day @ N300.00 per toll gate fee

Average number of Buses per day: 10,500Average number of Car per day: 10,000

2 trips per day @ N200.00 per toll gate fee2 trips per day @ N100.00 per toll gate fee

Exchange Rate Applied $1:N198

Monthly/Yearly Revenue on Toll Gate Fee

Toll GatePer Day/week Per Month Per Year

Average number of Big Thriller per day: 7,000 x 3 Toll Gates A N147,000,000 N588,000,000 N7.056,000,000Average number of truck per day: 5,000 x 3 Toll Gates B 63,000,000 252,000,000 3,024,000,000Average number of Buses per day: 10,500 x 3 Toll Gates C 88,200,000 352,800,000 4,233,600,000Average number of Motorists per day: 10,000 x 3 Toll Gates D 42,000,000 168,000,000 2,016,000,000

- - -

Total Monthly/Yearly Revenue on Toll Gate FeeN340,200,00

0N1,360,800,0

00N16,329,600,0

00



Assumption of Revenue on Containers Clearing

Year 1DESCRIPTION

PROJECTED No OF CONTAINERS YEARLY CLEARING CHARGES TOTAL

20 FT 1,500,000 N24,000 N36,000,000,00040FT 1,000,000 N40,000 40,000,000,000

Total Revenue Year 1 N76,000,000,000

Year 220 FT 1,750,000 N24,000 N42,000,000,00040FT 1,250,000 N40,000 50,000,000,000


Year 320 FT 2,000,000 N24,000 N48,000,000,00040FT 1,500,000 N40,000 60,000,000,000


Year 420 FT 2,250,000 N24,000 N54,000,000,00040FT 1,750,000 N40,000 70,000,000,000


Year 520 FT 2,500,000 N24,000 N60,000,000,00040FT 2,000,000 N40,000 80,000,000,000


Year 620 FT 2,750,000 N24,000 N66,000,000,00040FT 2,250,000 N40,000 90,000,000,000


Year 720 FT 3,000,000 N24,000 N72,000,000,00040FT 2,500,000 N40,000 100,000,000,000


Year 820 FT 3,250,000 N24,000 N78,000,000,00040FT 2,750,000 N40,000 110,000,000,000


Year 920 FT 3,500,000 N24,000 N84,000,000,00040FT 3,000,000 N40,000 120,000,000,000




Year 1020 FT 3,750,000 N24,000 N90,000,000,00040FT 3,250,000 N40,000 130,000,000,000


12.0 Economic and Financial Viability

The critical issues in port planning, development and management are the ability of a port to conveniently receive and effectively service ships calling at the port at the least cost and in the shortest time.

Preferred ports worldwide that distinguish themselves with their high competitive profiles are invariable ports with:-

Specialized/wide berths; Berthing and access channel depths of at least 15m; Secure warehouses; Spacious container yards; Specialized loading/offloading gantry cranes; Adequate transportation infrastructure which ensure convenient

movement of goods into and from the port zone; Efficient port operating systems handled by proactive port

management.

Flowing from the prevailing conditions above, there is a compelling need for a deep sea port and FTZ as planned, on the western flank of the Niger Delta. Since there is no deep sea port along the West African Coast, a well-developed, equipped and effectively managed deep sea port of a world-class standard, serviced with good access roads, and properly marketed, will inevitably become the West Africa hub port and trans-shipment terminal serving Nigeria, the land-locked countries to the North of Nigeria and smaller coastal countries along the West African Coast.

Based on preliminary evaluation, the deep sea port project is an attractive investment proposition. From the experience of relatively small Onne Oil and Gas Free Trade Zone, a well- planned deep sea port of 10,000 hectares; well serviced with first class infrastructural facilities and superior quality access roads linking interstate highways would have comparative advantage.



13.0 Assessment of Nigerian Ports Based on the considerations above, existing ports are not competitive. Apart from the Lagos Port, they are all small. All Nigeria ports have relatively shallow depths, are congested and ill equipped, ill maintained and managed poorly.

These factors account for the poor services in the ports, characterized by shipping delays, pilferage, lack of competitiveness, high tariffs and long service turnaround times.

An eloquent manifestation of the non-competitiveness /unattractiveness of Nigeria Ports is the significant and continuing increase in the importance of Lome and Cotonou Ports in Nigeria’s economic life.

+



Appendix 1 Ten (10) Years Projected Cash Flow Statement Sources of Cash: Beginning Year 1

N’000Year 2N’000

Year 3N’000

Year 4N’000

Year 5N’000

Cash on hand

N480,447,000,000

40,200,533,000

99,675,667,749

178,545,668,414

277,149,501,790

CASH INFLOW:

Investor Fund 480,447,000,000

SALES REVENUE: DEEP SEA PORTTerminal Handling Charges

-

Container Clearing Charges: 20ft & 40ft

-76,,000,000,000 92,000,000,000 108,000,000,00

0124,000,000,00

0140,000,000,0

00Ocean Freights Charges

- 2,128,000,000 2,234,400,000 2,246,120,000 2,363,426,000 2,481,597,000

Demurrage Charges - 500,000,000 525,000,000 551,250,000 578,812,500 607,753,000

Landing, Parking/Handling Charges

-

1,148,000,000 1,176,700,000 1,206,117,500 1,236,270,000 1,267,177,000Jetty/Maritime Services - 1,395,000,000 1,429,875,000 1,465,622,000 1,502,263,000 1,539,820,000

Car Park - 146,000,000 148,200,000 150,423,000 152,679,000 154,969,000

Speed Boat 30 Seaters Marine Transportation

- 195,000,000 198,900,000 202,878,000 206,935,000 211,074,000

Vessel Berthing Length in Metre

- 1,182,000,000

1,217,460,000 1,253,984,000 1,291,604,000 1,330,352,000

Warehouse Marine Cargoes Handling Charges

-

1,741,000,000 1,784,525,000 1,829,138,000 1,874,866,000 1,921,738,00030-50 Metric Tons Fork Lifting Crane

-,572,000,000 586,300,000 600,958,000 615,982,000 631,382,000

Total Inflow in Naira (N)

480,447,000,000

85,007,000,000 101,301,360,000

117,506,490,500

133,822,837,500

150,145,862,000

Total Inflow in Dollar ($)

$2,426,500,000

$431,507,614 $511,623,030 $593,467,124 $675,872,917 $758,312,434

SALES REVENUE: TOLL GATEAverage number of Big Thriller per day: 7,000 x 3 Toll Gates

N7.056,000,0007,761,600,000 8,537,760,000 9,391,536,000 10,330,689,60

0


http://www.business-plan.co.za/1.4-cash-flow-projections-sheep-farming-business-plan.html


Average number of truck per day: 5,000 x 3 Toll Gates 3,024,000,000 3,326,400,000 3,659,040,000 4,024,944,000 4,427,438,400Average number of Buses per day: 10,500 x 3 Toll Gates 4,233,600,000 4,656,960,000 5,122,656,000 5,634,921,600 6,198,413,760Average number of Motorists per day: 10,000 x 3 Toll Gates 2,016,000,000 2,217,600,000 2,439,360,000 2,683,296,000 2,951,625,600

-Total Sales Revenue Toll/Gate in Naira (N)

N16,329,600,000

N17,962,560,000

N19,758,816,000

N21,734,697,600

N23,908,167,360

Total Sales Revenue Toll/Gate in Dollar ($)

$82,472,727

$90,720,000

$99,792,000

$109,771,200

$120,748,320

SALES REVENUE: FARMSSales of Grain 200,000,000 220,000,000 242,000,000 266,200,000 292,820,000

Livestock 250,000,000 275,000,000 302,500,000 332,750,000 366,025,000

Products 150,000,000 165,000,000 181,500,000 199,650,000 219,615,000

Other Sources of Farm Income

150,000,000 165,000,000 181,500,000 199,650,000 219,615,000

Total Sales Revenue Farm in Naira (N)

N750,000,000

N825,000,000

N907,500,000

N998,250,000

N1,098,075,000

Total Sales Revenue Farm in Dollar ($)

$3,787,879

$4,166,667

$4,583,333

$5,041,667

$5,545,833

Net Sales Revenue in Naira (N)

N102,086,600,000

N120,088,920,000

N138,172,806,500

N156,555,785,100

175,152,104,360

Net Sales Revenue in Dollar ($)

$515,588,889

$606,509,697

$697,842,457

$790,685,783

$884,606,588

CASH OUTFLOW:

Road Construction Cost

138,600,000,000

- - - - -

Deep Sea Port Infrastructure Development Cost 257,400,000,00

0

- - - - -

Cost of Fully Mechanized Farm Plants & Equipments 59,400,000,000

- - - - -

Professional fees/Consultancy fees 2.50% 11,385,000,000

- - - - -

Bank Management/Processing fees 1.50% 6,831,000,000

- - - - -



Financial Charges 1.50%

6,831,000,000 - - - - -

Investors Repayment - 48,044,700,000 48,044,700,000 48,044,700,000 48,044,700,000 48,044,700,000

Interest on Investment - 13,841,367,000 12,569,085,251 11,258,105,835 9,907,251,724 8,515,310,097

Total Outflow 480,447,000,000

61,886,067,000 60,613,785,251

59,302,805,835

57,951,951,724

56,560,010,097

Net Cash Flow 0 N40,200,533,000

N59,475,134,749

N78,870,000,665

N98,603,833,376

118,592,094,263

Balance B/Fwd 0 N40,200,533,000

N40,200,533,000

N99,675,667,749

178,545,668,414

277,149,501,790

Cumulative Balance C/Fwd in Naira (N)

0 40,200,533,000

99,675,667,749

178,545,668,414

277,149,501,790

395,741,596,053

Cumulative Balance C/Fwd in Dollar ($)

0 $203,032,995

$503,412,463

$901,745,800

$1,399,744,959

$1,998,694,930

Sources of Cash: Beginning Year 6N’000

Year 7N’000

Year 8N’000

Year 9N’000

Year 10N’000

Cash on hand 277,149,501,790

395,741,596,053

534,577,346,325

693,960,042,927

874,219,541,217

1,075,714,854,312

CASH INFLOW:Investor FundSALES REVENUE: DEEP SEA PORTTerminal Handling Charges Container Clearing Charges: 20ft & 40ft 140,000,000,00

0156,000,000,000 172,000,000,00

0188,000,000,000 204,000,000,00

0220,000,000,00

0Ocean Freights Charges

2,481,597,000 2,605,677,000 2,735,961,000 2,872,759,000 3.016,397,000 3,167,217,000

Demurrage Charges 607,753,000 622,947,000 638,521,000 654,484,000 670,846,000 687,617,000Landing, Parking/Handling Charges 1,267,177,000 1,298,856,000 1,331,327,000 1,364,610,000 1,398,725,000 1,433,693,000Jetty/Maritime Services 1,539,820,000 1,578,315,000 1,617,773,000 1,658,200,000 1,699,655,000 1,742,146,000Car Park 154,969,000 157,294,000 159,653,000 162,048,000 164,479,000 166,946,000Speed Boat 30 Seaters Marine Transportation

211,074,000 215,295,000 219,600,000 223,992,000 228,472,000 233,041,000

Vessel Berthing Length in Metre

1,330,352,000 1,370,263,000 1,411,371,000 1,453,712,000 1,497,323,000 1,542,243,000

Warehouse Marine


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Cargoes Handling Charges

1,921,738,000 1,969,781,000 2,019,026,000 2,069,502,000 2,121,240,000 2,174,271,000

30-50 Metric Tons Fork Lifting Crane 631,382,000 647,167,000 663,346,000 679,930,000 696,928,000 714,351,000

Total Inflow in Naira (N)

150,145,862,000

166,465,595,000

182,796,578,000

199,139,237,000

215,494,065,000

231,861,525,000

Total Inflow in Dollar ($)

$758,312,434 $840,735,328 $923,215,040 $1,005,753,722

$1,088,353,864

$1,171,017,803

SALES REVENUE: TOLL GATEAverage number of Big Thriller per day: 7,000 x 3 Toll Gates 10,330,689,600 11,363,759,000 12,500,135,000 13,750,148,000 15,125,163,000 16,637,679,000Average number of truck per day: 5,000 x 3 Toll Gates 4,427,438,400 4,870,182,000 5,357,200,000 5,892,920,000 6,482,212,000 7,130,433,000Average number of Buses per day:10,500 x 3 Toll Gates 6,198,413,760 6,818,255,000 7,500,081,000 8,250,089,000 9.075,098,000 9,982,608,000Average number of Motorists per day:10,000 x 3 Toll Gates

2,951,625,6003,246,788,000

3,571,467,000 3,928,614,000 4,321,475,000 4,753,623,000

Total Sales Revenue Toll/Gate in Naira (N)

N23,908,167,360

N26,298,984,000

N28,928,883,000

N31,821,771,000

N35,003,948,000

N38,504,343,000

Total Sales Revenue Toll/Gate in Dollar ($)

$120,748,320

$132,823,152

$146,105,470

$160,716,015

$176,787,616

$194,466,379

SALES REVENUE: FARMSSales of Grain 292,820,000 322,102,000 354,312,000 389,743,000 428,717,000 471,589,000Livestock 366,025,000 402,627,500 442,890,000 487,179,000 535,897,000 589,487,000Products 219,615,000 241,577,000 265,735,000 292,308,000 321,539,000 353,693,000Other Sources of Farm Income

219,615,000 230,596,000 242,126,000 254,232,000 266,944,000 280,291,000

Total Sales Revenue Farm in Naira (N)

N1,098,075,000

N1,196,902,500

N1,305,063,000

N1,423,462,000

N1,553,097,000

N1,695,060,000

Total Sales Revenue Farm in Dollar ($)

$5,545,833

$6,044,962

$6,591,227

$7,189,202

$7,843,924

$8,560,909

Net Sales Revenue in Naira (N)

175,152,104,360

193,961,481,500

213,030,524,000

232,384,470,000

252,051,110,000

272,060,928,000

Net Sales Revenue in Dollar ($)

$884,606,588

$979,603,442

$1,075,911,737

$1,173,658,939

$1,272,985,404

$1,374,045,091

CASH OUTFLOW:Road Construction Cost - - - - -Deep Sea Port Infrastructure Development Cost

- - - - -

Cost of Fully Mechanized Farm Plants & Equipments

- - - - -



Professional fees/Consultancy fees 2.50%

- - - - -

Bank Management/Processing fees 1.50%

- - - - -

Financial Charges 1.50%

- - - - -

Investors Repayment 48,044,700,000 48,044,700,000 48,044,700,000 48,044,700,000 48,044,700,000 48,044,700,000Interest on Investment 8,515,310,097 7,081,031,228 5,603,127,398 4,080,271,710 2,511,096,905 894,194,150

Total Outflow 56,560,010,097

55,125,731,228 53,647,827,398

52,124,971,710

50,555,796,905

48,938,894,150

Net Cash Flow 118,592,094,263

138,835,750,272

159,382,696,602

180,259,498,290

201,495,313,095

223,122,033,850

Balance B/Fwd 277,149,501,790

395,741,596,053

534,577,346,325

693,960,042,927

874,219,541,217

1,075,714,854,312

Cumulative Balance C/Fwd in Naira (N)

395,741,596,053

534,577,346,325

693,960,042,927

874,219,541,217

1,075,714,854,312

1,298,836,888,162

Cumulative Balance C/Fwd in Dollar ($)

$1,998,694,930

$2,699,885,588 $3,504,848,702

$4,415,250,208

$5,432,903,305

$6,559,782,263

14.0 Conclusion

In this study an examination has been conducted of various factors that must be considered before a deepwater sea port facility at Calabar can be constructed and it has been determined that such an endeavor is indeed both technically feasible and economically desirable. Preliminary estimates of costs for each of the phases necessary to bring the construction of deep sea port facilities to fruition have been identified and range of cost benefits also initially assessed. To complete this project, considerable effort will be required and it will take time. Perhaps the most ambitious estimate for completion of this project is two years, but more realistically three years from this point before the first ship could be berthed at the new wharf.

This report notes that there are a number of options available with respect to the type of marine structure for the berth itself. Nevertheless, in order to develop some preliminary cost estimates it was necessary to choose one of these and a caisson structure has been proposed as a viable option.



Notwithstanding this initial choice, more cost effective designs may be presented at future stages of project development.

Appendix: 2 Super Highway



Appendix: 3 Deep Sea Port


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Appendix 4 Fully Mechanized Farming


executive summary 2015 - deep sea port by broad spectrum ind serv ltd (autosaved)

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