The inclusion of already concessioned Tafawa Balewa Square (TBS), Lagos in the list of national assets to be sold to fund the 2018 budget a few weeks after the revocation of the concessioning of International Trade Fair Complex, is brewing concerns among investors and stakeholders. Dayo Ayeyemi reports
From the revocation of Lagos-Ibadan Express road’s project over non-performance to the stop-work order on Federal Secretariat Complex, Ikoyi, Trade Fair Complex in Lagos and recently, Tafawa Balewa Square (TBS), Nigeria is recording a lot of minus in public-private partnership (PPP).
While the dust over other failed projects is yet to settle, especially that of Trade Fair Complex, the Federal Government, through the Director-General, Budget Office, Mr. Ben Akabueze, last week, listed TBS among other national assets to be sold to fund the current budget.
The DG stated this at the public hearing organised by the House of Representative Joint Committees on Finance, Appropriation, Loans, Debts and Aids and Legislative Budget and Research on the 2018- 2020 Medium Term Expenditure Framework and Fiscal Strategy Paper.
In a swift reaction, the concessionaire of TBS Lagos, BHS International Limited, expressed shock over plans by the Federal Government to sell the edifice as part of the national assets to generate sufficient revenue to finance Nigeria’s annual budgets between 2018 and 2020.
According to the Chief Executive Officer, BHS International Limited, Otunba Olu Adenodi, TBS had been concessioned to the company for a period of 30 years since 2008.
He insisted that there was no basis of listing the edifice as part of assets that the government wants to sell to fund the budget.
Expressing shock over the announcement, he explained that the Federal Government through the Bureau of Public Enterprises (BPE) had just granted the company an indemnity to reassure their investors.
“What government should have done was to confirm from BPE before making such announcement,” he said.
Adenodi wants the government to issue a rejoinder before the company takes the next action, noting that BHS International Limited would have turned around the fortune of TBS by now if not for the obstacles posed earlier by Lagos State Government.
“Federal Government has just granted us an indemnity to reassure our investors. I came back from Abuja last Friday with the indemnity, which I showed to my staff and we all rejoiced over it.
“Our investors are happy,” Adenodi said, wondering why the government would list TBS among properties it wants to sell after it was concessioned a few years ago.
The BHS boss said the TBS complex remained the property and commonwealth of all Nigerians held in trust by the government, but leased to BHS under the privatisation policy.
“The concession of TBS to BHS International Limited is for 30 years,” he explained.
Adenodi recalled that before BHS International took over the TBS, the complex provided a haven for miscreants, street urchins and hoodlums, who used the place as a hide out to perpetrate various social vices in central Lagos.
Since the concession in 2008, Adenodi said his firm has been upgrading the facilities in the complex, creating employment for Nigerians in the process, paying taxes to the government, generating income for the Federal Government and keeping the environment clean and safe.
Meanwhile, stakeholders in the construction sector, especially investors, who had earlier subscribed to the government’s PPP projects are currently regretting their decision.
Until early this year that the court ruled in favour of concessionaire of Festac Phase II project, subscribers abandoned the mixed used housing scheme because of issues bordering on ownership between the land owners and the Federal Government.
Also recently, Hotel Presidential, Enugu joined the league, following protracted litigation after its concession four years ago.
The issues surrounding the concession of Federal Secretariat Complex, which was concessioned to Wale Babalakin-led Resort International Limited, is also yet to be resolved.
Justifying the revocation of the concession of the Lagos International Trade Fair Complex (LITFC) penultimate week, the Federal Government said it took the decision because the concessionaire, Aulic Nigeria Limited, grossly breached the concession agreements.
Top on the contract breach is that Aulic Nigeria Limited is yet to pay a lease indebtedness of N6.542 billion accumulated over the years to the Federal Government.
The 322-hectares LITFC was concessioned to Aulic in 2007 for N40 billion lease fees to be paid over 30 years.
The concessionaire, it was gathered paid just an entry fee of N200 million and another N12.73 million for the moveable assets till date.
Consequently, the National Council on Privatisation (NCP) has directed the relevant government authorities to recover the over N6.5 billion lease indebtedness as quickly as possible.
Reasons such as unfavorable policy, lack of continuity in government, inappropriate financial details, lack of depth of conception and absence of wider environmental implications among others, have been adduced for failure of PPP projects in Nigeria by experts.
According to industry’s practitioners, failure of these projects in which investors’ funds are trapped, is denting the country’s image on the international scene.
Lending credence to the above-stated factors, Managing Director, Kola Akomolede and Company, Mr. Chief Kola Akomolede, mentioned lack of continuity in the government and budget’s overload among reasons for their delay.
He said: “This also affects new Falomo Shopping Mall project, which former Governor Babatunde Fashola signed its concession, but abandoned by the incumbent.”
Rather than terminating these projects, Akomolede, a former President of Nigeria’s International Real Estate Federation (FIABCI), advised that the government renegotiate them for their completion.
First Vice President, Nigerian Institute of Town Planners, Mr. Toyin Ayinde, noted that various reasons might be responsible for the failure of PPP projects in Nigeria.
He said the truth is that some of the project proponents have not worked out all the financial requirements of the projects in question, while others have not seriously considered the wider environmental implications of the projects they seek to pursue.
There must be intellectual investment in PPP projects before the deals are signed. The proponents should always dialogue with representatives of the government so they can know how their minds are working in order to evolve workable projects.
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