THE failure of the Federal Government to honour its obligations under the Public Private Partnership (PPP) arrangement for the conversion of the Federal secretariat to resident apartments for Nigerians in the Diaspora cost the concessionaire N80 billion.
Dr. Wale Babalakin, the chief executive officer of Resort International Limited – the owner of the Federal Secretariat – made this disclosure at the Infrastructure Policy Commission session at the Nigeria Economic Summit (NES).
The session was moderated by the Managing Director of United Bank for Africa (UBA), Mr. Philips Oduoza, yesterday in Abuja.
He lamented what he called the “colossal losses suffered” by his company because of government’s tardiness.
Babalakin told the gathering that “the total loss on the project is in the excess of N80 billion”.
Babalakin said before Resort International Limited entered into the agreement, the “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,” he said.
On the controversial Lagos-Ibadan Expressway, Babalakin was also concerned that three years after, the road was still in a mess, stressing that “by now, the concessionaire would have completed the project to the benefit of Nigerians”.
He decried the sale of assets to the Asset Management Company of Nigeria (AMCON), noting that “the assets were sold at 100 per cent”. “The implication of this is that they were good assets,” he added.
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.”
As a result of government’s infraction of a court order, Babalakin noted that “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. 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 Lagos Ibadan project and the institution of criminal charges, he said, confirmed the existence of an agenda that was not based on the laws of criminal prosecution.
Babalakin noted that the attitude “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.
He said PPP is a very important way of bridging the infrastructural deficit in Nigeria, stressing that “the process has been poorly implemented by those in charge of the reins of power”.
On the way out of the 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.”
The Director General of the Infrastructure Concession Regulatory Commission (ICRC), Mr. Aminu Diko, said the ICRC law was very weak. He said there was a bill before the National Assembly to amend the ICRC Act with a provision for the name of the commission to be changed because it’s 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.