IN a recent column on a prominent champion of the public-private partnership approach to development, I highlighted his list of hindrances, describing them as “enemies of public-private partnership in Nigeria.”
Based on his personal experience, Resort Group Chairman Dr Wale Babalakin (SAN) had named these enemies of public-private partnership (PPP) at the 2016 Nigerian Economic Summit in Abuja, including the attitude of the government, lack of respect for sanctity of contracts and the rule of law, lack of investor security, corruption and malice.
”Babalakin’s involvement in PPP encouraged some of us to get involved in PPP Project, now with regrets,” a reader lamented in a text to me after the column was published. According to him, “These evils led to the current degradation of infrastructure, and are solely responsible for the state of total abandonment of the Federal Civil Service Club, along Mabushi-Kado Expressway, Abuja.”
It is a story of rot; not only the physical deterioration of the club, but also the corruption of the PPP model.
”Briefly, the Office of the Head of Civil Service of the Federation (OHCSF) offered the renovation and infrastructural development of the club to a private company on 29th December, 2015, and acceptance was conveyed, next day to the offeror,” my source said.
A letter to the company, dated 29th December, 2015, said: “I am directed to convey the approval of the Head of Civil Service of the Federation, in respect of your proposal of 6th November, 2015, and to inform you that your company, M/S Wajul Catering Services Ltd., has been awarded the lease for the running and infrastructural development of the Federal Civil Service Club, Mabushi, Abuja, on PPP lease arrangement subject to renewal at a lease amount of seventy five million naira (N75m) for the first five years and subsequent increase of 10% on the lease amount at each five years renewal totalling 20 years. You are to pay 50% of the lease amount to the Government Treasury and 50% to Club account.” It was signed by H.O.Alayaki, Director (Employee Relations and Welfare), for Head of Civil Service of the Federation.
A letter from the company’s lawyer, dated 30th December, 2015, addressed to Head of Civil Service of the Federation, and received by Mr Anuwe Charles, the Secretary of the PPP committee, on the same day, said: “We have the instruction of our client to hereby accept the lease for the running and infrastructural development of the FCSC, Abuja, on PPP arrangement upon the terms as clearly stated in her proposal dated 6th November, 2015, and as approved by the Head of Civil Service of the Federation.”
According to my source, “Part payment was made by the Investor in the form of request by the OHCSF to the Investor to settle/refund the extant tenants of their unutilised rent totalling N9m after OHCSF negotiated and agreed to refund the rent…The Secretary (PPP) collected and acknowledged the receipt of part payment.”
Furthermore, a notice of temporary closure of all activities at the club until further notice was issued to take effect from 21st March, 2016. “The Secretary (PPP) handed over the Club to Messrs Wajul Catering Services Ltd. on 23rd March, 2016. Messrs Codeline Limited (Engineering Consultant to the Lessee) was mobilised to site on 19th April, 2016, and 30% mobilisation fee of N30, 794,557 was paid to the company,” my source said.
The PPP agreement turned into a disagreement in June 2016 when the lessee indicated that it was “ready to pay the balance of the lease as follows: N37.5m via the E-payment to the Treasury and N28.5m into the Club’s account after the deduction of the N9m part-payment.” The company was “advised by the D(ER&W) to hold on the payment.”
Strangely, in October 2016, “the Head of Service (HoS)… stated that the lessee did not accept the offer,” whereas the acceptance letter was “received and acknowledged by the Secretary, PPP Committee.” To clarify the situation, “Proof of acceptance letter was delivered to the lessor. This was received at the HoS Registry.”
This question is: If there wasn’t acceptance and part payment, on what basis was the property handed over to the lessee in March 2016? “The lessee was in occupation till December 2016. It is on record,” my source stressed.
By December 2016, the PPP agreement had failed, “principally due to disrespect for contract and rule of law, corruption and malice by the erstwhile Head of Service, Mrs Winifred Ekanem Oyo-Ita,” my source claimed. As a result, ”Further to the HoS assurances to refund the lessee’s expenses, a formal handing and take-over of the club was carried out by both parties.”
The company considered commencing legal action against the lessor “in the absence of further communication and the refund promised,” and petitioned the Minister of Justice and Attorney-General concerning the club issue.
In February 2017, the OHCSF/Lessor replied to an inquiry from the Attorney-General, stating that “the HoS put the PPP on hold pending the involvement and direction of Infrastructure Concession Regulatory Commission (ICRC) to ensure compliance with standards and procedure.”