Our Operation not Illegal, Petroleum Tank Farm Association Tackles Lagos State Govt
The attention of Ijegun-Egba Tankfarm Owners and Operators Association has been drawn to the statement by the Lagos State Commissioner for Physical Planning, Hon Idris Salako (Dr) at the Stakeholders Meeting on Friday 20th September 2020 regarding the operations of Tankfarms in Lagos State, especially to the effect that our members are operating illegally in Lagos State, that our members do not pay any taxes, charges or fees to the Lagos State Government and that our members have, by their operations have destroyed infrastructural facilities within their operational areas.
The Hon Commissioner also threatened to immediately shut down Tankfarms. These statements have, to say the least, painted the operators of Tankfarms in very bad light, hence the need to make some clarifications in respect of our members operations.
As an umbrella organization of all the Oil Companies currently engaged in the operation of Petroleum Storage Tankfarms and Facilities at Ijegun – Egba, Satellite Town, Lagos, along the Ojo Creek Channel, to wit: A.A. RANO Nigeria Limited, AIPEC Oil & Gas Limited, Bond Global Energy Projects Limited, Chipet International Limited, Emadeb Energy Services Limited, First Royal Oil Nigeria Limited, MAO Petroleum Company Limited, Menj Oil Limited, Ocean Pride Energy Services Limited, Stallionaire Nigeria Limited, Star Synergy Petroleum Services Limited, Wosbab Energy Solutions Limited and Rainoil Limited, the Association wishes to restate our members’ commitment to contributing to government’s effort in building a robust business environment to stimulate economic growth.
LEGALITY OF OUR MEMBERS BUSINESS OPERATIONS
We wish to categorically state that, contrary to the Hon Idris Salako’s statement, all our members are duly licensed and authorized by the Department of Petroleum Resources (DPR) to operate Petroleum Storage Facilities (Tankfarms) at Ijegun and have all requisite Permits, Licenses from all appropriate Agencies of government to construct, own and operate Tankfarms, as well as engage in oil marketing and petroleum product distribution operations.
Our member companies have their facilities mostly on the shoreline of the Ojo Creek Channel, with a considerable distance to community houses and were granted title by the Land registry, Federal Ministry of Lands and Housing to use same for industrial and/or commercial purposes. The cluster our members occupy was a wetland, of which rigorous sand filling and shoreline protection were undertaken at great cost, thereafter pilling in line with best practices to sustain the structures thereon.
Regarding the regularization of our members’ drawings with the Lagos State Government, let it be on record that in 2014, our members through the Association applied for regularization. The government, at the time, was not keen at regularizing same. Recently, when the Government asked our members to submit documentations for regularization, all our members complied.
But to our greatest shock, each company is arbitrarily charged approximately N300,000,000.00 (Three Hundred Million Naira). With the present global economic outlook, this is outrageous and a big strain on our members.
INFRASTRUCTURAL OUTLOOK, DEFICITS AND OUR INTERVENTIONS
The environmental outlook and challenges were apparent on our members’ entry into the Ijegun Shoreline to develop their respective facilities. The area was a wetland, without access roads.
Further to our members’ commitment to improve the environment, safety and infrastructural deficits within the Tankfarm cluster and environ, the Association has undertaken several collective projects and actions with a view to addressing some of the infrastructural deficits. As credible and responsible business owners who place high premium on life, safety and environment, the Association has since 2013 been responsible for the maintenance, rehabilitation of Marwa Road and sections of Old Ojo Road, the reconstruction of Pioneer Road and others roads within our operational environment.
These are just a few of the interventions that the Association and member companies have undertaken to address the infrastructural deficits and environmental challenges within the Ijegun axis.
It is of interest to note that the Tankfarms at Ijegun have individually and collectively, as an Association, expended over ₦2 Billion in tackling some pressing infrastructural deficits and challenges within our corridor of operations, namely:
- In April, 2019, the Association awarded a contract for the rehabilitation of the entire stretch of Marwa Road and reconstruction of Pioneer Road to Sappers Engineering Co Ltd (Nigerian Army Engineers) at the cost of ₦500,343,994.37. The scope of work included the rehabilitation of all portions of Marwa Road, reconstruction of failed drainage, desilting the drainage etc. On Pioneer Road the scope included the reconstruction thereof with re-enforced concrete, reconstruction of the drainages etc. Sappers Engineering Co. Ltd (Nigerian Army Engineers) was chosen out of four Bidders based on their outstanding competence, expertise, discipline and trust, in order not to compromise standards. There was also an extension of the scope of work to cover Old Ojo Road from Finiger to Dantata Junction at an additional cost of ₦70,000,000.00. The said works have been completed.
- Reconstruction of Pioneer Road by two Contractors, namely, Biella Nigeria Limited and Sappers Engineering Co. Ltd (Nigerian Army Engineers), each working on their respective sections. Sappers Engineering Co. Ltd (Nigerian Army Engineers) and Biella Nigeria Limited have completed their respective sections, to ease traffic congestion, traffic mishaps, flooding and improve safe movement of goods and services.
Let us reiterate that prior to the aforementioned Contracts with Sappers Engineering Co. Ltd (Nigerian Army Engineers) and Biella Nigeria Limited, the Association have since 2013 embarked on several interventions in the area of road maintenance and rehabilitations, construction and reconstruction of roads and drainages.
It was in appreciation of our effort in maintaining Marwa Road that the Oriade LCDA intimated the then Governor of Lagos State, vide letter dated 10th July 2018, of our efforts and solicited the support of the government towards a long term solution.
Regarding other collective and individual interventions and Corporate Social Responsibilities, suffice to mention a few for record purposes, namely:
- In 2013 the Association rehabilitated Pioneer Road at the cost of ₦13,000,000.00.
- In December 2013 A.A. Rano Ltd and Emadeb Energy Services Ltd awarded a contract to Biella Nigeria Limited for the construction of road from Pioneer Road to Wosbab Tankfarm at the cost of ₦350,000,000.00
- In 2014 Emadeb Energy Services Limited rehabilitated approximately 600 meters of the collapsed section of Marwa Road down to the Lagos State Jetty at over ₦15,000,000.00.
- The Association by Letter of Award dated 17th May 2017, awarded contract for the rehabilitation of Marwa Road to Elbuns Engineering Construction Limited at an initial sum of ₦55,041,334.00, and later reviewed upward to ₦72,500,000.00 following additional scope of work.
- On 11th December, 2017 we awarded a contract to Biella Nigeria Limited for the reconstruction of the Tankfarm Ring Roads by re-enforced concrete, at an initial value of ₦115,000,000.00 and later reviewed upward to ₦151,000,000.00 following an additional scope of work. The work has since been completed, and services both the Tankfarms and the Community.
- In June 2019, we carried out palliative works at Old Ojo Road, Lagos-Badagry Express Road and particularly Alakija roundabout to make it motorable. These are Federal and State Roads.
- Aside from the aforementioned interventions, we wish to state that the Association has been the one maintaining Marwa Road for years. In fact every portion of Marwa Road with inter-locking stones had been undertaken by the Tankfarms.
- In 2016 Bond Global Energy Limited, a member of the Association, reconstructed Oba Sekummade / Bond Road at the cost of ₦40,841,225.00. And in 2019 did maintenance works on the same roads at the cost of ₦2,913,855.00.
- 1n 2015-2016 Chipet International Limited constructed the Chipet Road with drainage at the cost of ₦60,000,000.00
- 1n 2015-2016 A.A. Rano Limited donated a Toyota Hilux to Satellite Town PCRC for security patrol.
- Within 2018/2019, Wosbab Energy Solutions Limited undertook the grading of Folarin Road and construction of culverts at the cost of ₦1,760,000.00
- Within 2015/2019 the Association expended over ₦15,000,000.00 for palliative works on Marwa Road at several collapsed portions, especially after heavy rainfall.
- Prior to commencement of operations, Stallionaire Nigeria Limited, a member, a member of the Association, constructed the access road at the cost of ₦64,200,000.00.
- It is worth mentioning that Emadeb Energy Services Limited in May 2018 equipped an Information Technology Class with modern computer systems, internet, generator and accessories at Ijegun-Egba Primary School, Satellite Town, Lagos State.
- In 2020, in the storm of the pandemic the Association donated and made available palliatives to the community to cushion the effect of the hardship experienced at that time
These are just a few of the interventions that the Association and member companies have undertaken to address the infrastructural deficits, environmental challenges and other CSR within the Ijegun axis.
OUR MEMBERS IMPACT ON NATIONAL ECONOMY
The Tankfarm operations have contributed immensely to National economy by way of revenue through taxes, levies and charges to the Federal and State governments, as well as the local governments where the storage facilities are located. Regarding payments to Lagos State Government, we wish to state that our members pay the following taxes, charges and fees to the State Government, namely:
- Lagos State Signage & Advertisement Agency (LASAA)
- Lagos State Environmental Protection Agency (LASEPA)
- Lagos State Government-PAYEE
- Lagos State Government Development Levy
- Radio and Television License Fees- Local Government
- Land Use Charge
- Wharf Landing Fees Collecting Authority
- Lagos State Ministry of the Environment and Water Resources
- Lagos State Waste Management Authority (LAWMA)
From the above mentioned payments, it very sad and embarrassing for the Hon Commissioner to publicly say that the Tankfarms do not pay taxes, charges and fees to the Lagos State Government.
The Tankfarms are an integral part of petroleum product supply chain in ensuring product supply, energy stability and energy security. Tankfarms have played and will continue to play significant roles in the supply and distribution of petroleum products across the nation. The Tankfarms at Ijegun, Satellite Town, Lagos play a very pivotal part in petroleum distribution in Nigeria, accounting for 35% national petroleum product distribution.
Our members are committed to ensuring efficient petroleum product distribution, and by extension ensuring energy security in line with the Federal Government’s policies and regulations. Our member companies have contributed immensely in ensuring energy stability and energy security in the Nation, and have always rose to the occasion in ensuring efficient supply and distribution of petroleum products to avoid scarcity of products.
Our commencement of operations have stimulated economic and commercial activities around the environ and beyond. Many small scale businesses have sprang up within the Ijegun axis, attesting to the value chain our operations have added to the business environment, as well as in uplifting the standard of living.
Our operations have provided direct and indirect employments and opportunities. Our member companies account for over 2,000 combined direct employments and over 5,000 indirect employments, including indigenes of the community where our facilities are located. Likewise, our operational activities have opened immeasurable business opportunities within our area of operation. This in no small measure has stimulated and improved business cum commercial activities and standard of living.
OUR POSITION ON SHUT DOWN OR CLOSURE OF TANKFARMS
Taking cognizance of the current bleak global economic outlook, occasioned by the pandemic that has brought economic activities to a very low level, with countries across the world focusing on measures to revitalize businesses, through injecting finances and funds to stimulate business activities, stimulate national economic growth, industrial and business development and advancement, it will be counterproductive to shut down or close the Tankfarms at Ijegun or at any place.
Any shut down or closure of Tankfarms will result in national economic crisis, energy insecurity, massive unemployment, banking and financial crisis and the shock in the banking sector will adversely affects other business and commercial activities. These might be difficult for the Nation to bear.
With the threat to shut down or close Tankfarms we wish to state that our national economy and energy supply, marketing and distribution of petroleum products across the country will be adversely affected, with a resultant unprecedented negative impact on energy security. Scarcity of petroleum products and long queues with attendant impacts on business, movements and safety will resurface in response to the cut in supply chain.
All our members are committed to conducting their business operations in line with best practices, strict adherence to safety rules and regulations, improving the state of infrastructure within our corridor, safeguard life and property, protect and preserve the environment as well as maintaining a good business environment.
Barr Eshiet E. Eshiet