The failure of the Federal Government to honour its obligations under the Public Private Partnership arrangement for the conversion of the Federal Secretariat in Ikoyi, Lagos State resulted in the loss of N80 billion by the concessionaire.
Speaking at the Infrastructure Policy Commission of the Nigeria Economic Summit Group, moderated by the Managing Director of the United Bank for Africa Plc, Philips Oduoza, on Wednesday in Abuja, Dr. Wale Babalakin, the Chief Executive Officer of Resort International Limited, the company that won the concessional rights to the Federal Secretariat project conversion, lamented what he called the “colossal losses suffered” by his company because of government’s tardiness.
Babalakin told the gathering: “The total loss on the project is in the excess of N80 billion.
“Once again it was the failure of the government to honour its obligations under the agreement that led to the project being stalled.”
However, before Resort International Limited entered into the agreement, Babalakin said “the Development Lease Agreement actually anticipated this scenario. Clause 3.2(iv) provides that that the Federal Government shall facilitate the obtaining of a ‘No Objection Approval’ from the Government of Lagos State to change of use of the premises from offices to residential apartments.”
On the controversial Lagos-Ibadan Expressway, Babalakin was also concerned that three years after, the road is still in a mess, stressing: “By now, the concessionaire would have completed the project to the benefit of Nigerians.”
The Bi-Courtney boss also decried the sale of assets to the Asset Management Company of Nigeria, noting: “The assets were sold at 100 per cent.
“The implication of this is that they were good assets.”
However in what he described as a “breach of Nigerian laws”, Babalakin said “a Federal Government agency moved against those assets. It was a wrong and disgraceful move. Rightfully the Court upheld the rights of the Concessionaire and dismissed the claims of AMCON.”
Inspite of a court order directing the Federal Government to set off whatever AMCON alleged that these companies are owing from the debt that the Federal Government is owing the companies, this order he said has not been obeyed till date.
As a result of this government infraction of a court order, Babalakin noted: “In law, Bi-Courtney and also its sister companies are not indebted to AMCON. On the contrary, Bi-Courtney is a net creditor to the Federal Government of Nigeria. Painfully the system does not realise that once Government is a bad debtor, no serious economy can be created.”
The coincidence between the termination of the Lagos-Ibadan Expressway project and the institution of criminal charges against him and the company he said confirms the existence of an agenda that is not based on the laws of criminal prosecution
The attitude of government, he said, “lacks respect for sanctity of contracts and the Rule of Law with attendant lack of investor security; Corruption and Malice being propagated in the country.”
The PPP, Babalakin said, is a very important way of bridging the infrastructural deficit in Nigeria, adding: “The process has been poorly implemented by those in charge of the reigns of power. Ignorance, deliberate refusal to learn and malice have played a serious role in the underdevelopment of Nigeria.”
On the way out of this problem, Babalakin and other speakers noted that “enlightenment must take place at a very high level to educate the populace that PPP is for the overall good of all. There must be an end to the triumph of mediocrity”.
Also speaking at the event, the Director General of the Infrastructure Concession Regulatory Commission, Aminu Diko, said the ICRC law was very weak and already there is a bill before the National Assembly to amend the ICRC Act with a provision for the name of the commission to be changed because its acronym is similar to that of the International Community of the Red Cross.
Giving the bad experiences narrated by some of the concessionaires and PPP operators, many speakers recommended enhanced capacity of public sector participants, “if not they will keep being an impediment”.