By AYOOLA OLAOLUWA
The decision of the Federal Government to embark on another concession exercise for the moribund Lagos International Trade Fair Complex has drawn the anger of concerned stakeholders in the complex, who described the move to take over the national monument from them as a breach of contract and a threat to their investments.
It would be recalled that the Federal Government, through the Bureau of Public Enterprises (BPE), had last week announced plans to concession the Tafawa Balewa Square, Lagos International Trade Fair Complex and the Calabar and Kano Special Economic Zones.
Disclosing the plan, the Head of Public Communications of the BPE, Amina Othman, said the bureau would hold soon an International Investors’ webinar on the four concession opportunities.
According to Wikipedia, a concession is a form of Public-Private Partnership (PPP) where a publicly-owned asset is operated and maintained by a private investor for a period of time on terms contained in a concession agreement.
The trade fair complex, a 350 hectare facility along the Lagos-Badagry Expressway, was constructed in the 1970s by the federal government to host the 1st Lagos International trade Fair held in 1977. After the 1977 fair, the infrastructure within the complex became moribund due to idleness and poor management.
However, after several years of neglect and abandonment by its owners, the complex received a lifeline in 2000, when consumer goods traders from the popular Balogun Market in Lagos Island, auto spare parts traders, furniture and jewelry traders moved to the complex. It currently hosts a number of market traders under different associations.
While the plan by the government to concession the complex has continued to receive commendations from many who argued that the moribund edifice would come back to life after receiving the much needed injection of funds from the new concessionaire, concerned investors who secured development lease agreements from the Ministry of Industry, Trade and Investment and the Trade Fair Management Board, fired the opening salvo against the planned concession of the complex.
According to the leader of the affected investors, Chief Eric Ilechukwu, who is also the President, Association of Progressive Traders in the complex, they already have different development lease agreements from the Federal Government through the Ministry of Industry, Trade and Investment and Trade Fair Management Board.
Ilechukwu on Monday led the group of 61 affected investors on a protest march to the Executive Director of Trade Management Board, Omosefe-Ajayi, where he presented a petition titled: ‘Sixty-one investors reject concession plan of Lagos Trade Fair complex by BPE’.
According to Ilechukwu, the traders consider the statement issued by the BPE that it would showcase investment opportunities in Lagos Trade Fair complex, TBS, Calabar and Kano Special Economic Zones to the investing public in a webinar in Abuja as worrisome.
“It is worrisome that the same Federal Government that had entered into different development lease agreements with 61 of us at different times is coming back to the same complex it has leased out to concession.
“It is important to make this clarification to the general public that the Federal Government had from 1995 till recently been leasing out portions of the complex to our members and none of the development lease agreements runs less than 25 years. In fact, some are 45 years with an option of renewal.
“Currently, what can be said to be remaining or yet to be leased out is about 20 or 25 per cent of the complex. So, we are saying that as far as our different lease terms are still running and valid in law, what the Bureau of Public Enterprises has for concession is only the undeveloped portion.
“All 61 of us have never reneged on our lease agreements and we all are up to date in paying our ground rent directly to the Federal Government’s Single Treasury Account through the supervising TFMB.
“Also, having demonstrated resilience in developing over 75 per cent of the complex to a world class shopping and business centre, we use this opportunity to equally tell the BPE that we are ready to take up the remaining undeveloped areas.
He also disclosed that if the government go ahead with its decision to appoint a new concessionaire for the complex, his members will lose the over N10 trillion they have invested in the complex.
“Since 1995 to date, our members have invested not less than N10tn in the development of the complex to world class business centre with borrowed money and we cannot allow our sweat to be suddenly snatched away from us in the name of concession.
“Any plan to turn us, the key developers in the complex as at today to tenants upon securing legitimate lease agreements and borrowing from banks to develop a hitherto abandoned federal asset into the largest single trading complex in sub-Saharan Africa, shall be resisted by all legal means,” he warned.
Also, the ASPMDA President, Chief Daniel Offorkansi, kicked against the move to concession the complex, insisting that it will not be fair to concession places that have been bought and built up.
“Between year 2000 and now, TFSF members have invested trillions of naira and built hundreds of modern shopping plazas.
“We have developed all the portions given to us, which are about 75 percent of the entire complex and we are ready to take up even the remaining 25 percent. We are at peace with our landlord, the Trade Fair Management Board,” the ASPMDA president said.
However, BH findings revealed that the traders may be fighting a lost battle, as there are many powerful and influential forces behind the new concession process.
“It is a fait accompli. There is nothing they can do about it. It is beyond them”, declared a top official in the Presidency.
“Even the Federal Government had tried to do it alone but failed. But this time around, it had to bow to the Lagos State government by carrying it along, knowing fully that the state government could scupper the move like it threw spanner into the sales of the Federal Secretariat Ikoyi and the Tafawa Balewa Square ((TBS).
“It (Lagos) has continued to argue and rightly so, that it gave the federal government its lands to build projects free and should by right get the first right of refusal in the event that the properties are to be sold or concession.
“The federal government tried to ignore the state government on several occasions and we are all alive to see the consequences. For instance, the old Federal Secretariat in Ikoyi sold to Dr. Wale Babalakin has remained abandoned because the state government refused to cooperate with the new owner.
“The state government frustrated all attempts by Babalakin to convert the complex into condominiums. He was denied all necessary building approvals by the government. Even, the federal government, for it to build in any state, must obtain necessary approvals from the state governments. That is why you see some federal projects like housing projects stalled in many states.
“The major obstacle to the trade fair complex and Tafawa Balewa Square concession is the Lagos State government, and it has been taken care of”, the official said.
BH gathered that in the new concession arrangements, the Federal Government ceded 24 percent equity to the Lagos State government.
While speaking at an investors’ forum at the just concluded Lagos Economic Summit (Ehingbeti 2021), the Director-General of the Bureau of Public Enterprises (BPE), Alex Okoh, said the Lagos government would contribute 24 per cent of the required investment in exchange for the same amount of shares in concession Special Purpose Vehicle (SPV) in partnership with the concessionaire.
Okoh said the concession would be for a period of 30 years, renewable by the federal government for another 30 year period.
“Should you emerge as the preferred concessionaire, we will negotiate with the Lagos government. From that stage, Lagos will take 24 percent of shares with the Lagos International Trade Fair Complex (LITFC) or Tafawa Balewa Square (TBS),” he had said.
BH investigations revealed that there has actually been a long-drawn battle for the control of the trade fair complex by contending forces dating back to 1999.
In 2000, the administration of former President Olusegun Obasanjo had entered into a lease agreement with various trade unions, including the Association of Progressive Traders (APT), Auto Spare Parts and Machineries Dealers Association (ASPMDA), Balogun Business Association (BBA), C-tempo Group, Mandilas United, Association of Nigerian Tyre Marketers (ANTM), Lagos International Trade Fair Plaza Owner’s Association, Tools & Hardware Dealers Association and Mike Express Company Limited.
The lease agreement with the new investors under the umbrella of Trade Fair Stakeholders Forum (TFSF), available records show, is for a 50 year period, renewable for another 49 years.
While the complex management board will manage the areas housing the unions, they in turn (investors) are to pay ground rates to the government through LTFMB.
Barely six years into the agreement, the federal government, in a major policy somersault, announced a bid for the concession of the whole trade fair complex in 2007. The exercise was won by Aulic Nigeria Limited, owned by Professor Nick Eze, a well known Peoples Democratic Party (PDP) member who out-bid his rivals with a bid of N40 billion spanning a 30-year period.
Rattled by the controversy generated by the exercise and the opposition against it by the initial lease holders under the auspices of Trade Fair Stakeholders Forum (TFSF), the government carved out the complex into two: developed and undeveloped areas.
While the developed area being occupied by the Trade Fair Stakeholders Forum was returned to the Trade Fair Management Board to manage, which in return will receive ground rates from the traders on behalf of the government, the undeveloped areas was ceded to Aulic.
The peace of the complex was again shattered by the emergence of the All Progressives Congress (APC) administration in 2015 which alleged that the concession was illegally done by the previous PDP government to favour one of its own. It also accused Aulic of not remitting any money to the federal government account since it secured the contract in 2007.
In its defence, Aulic argued that it never earned a dime from the deal as it was stripped of the right to manage the developed areas of the complex where traders operate. Despite its claims of fidelity, the new administration went ahead to terminate the concession agreement, handing over the complex to its management board.
However, several sources at the complex confided in BH that Aulic, after losing out the control of the more juicy areas to government, soon started selling lands in the undeveloped areas to interested buyers, particularly sitting tenants in the developed areas.
“Aulic can’t claim ignorance of not knowing that it officials were selling lands to interested parties. In fact, the portion of land where I built my warehouse was sold to me in 2009 by officials of Aulic”, declared an investor in the complex who simply identified himself as Ugo.
Meanwhile, BH gathered that the land selling spree under Aulic management was a child’s play, compared to when the management board of the complex took over after Aulic’s sacking.
“The LTFMB management under the control of its head, Omosefe-Ajayi, in connivance with market union executives, sold the lands to the executives in large portions on the excuse of building malls, offices, warehouses and shops.
“The executives in turn resold them at exorbitant rates to members. While I bought a space for N20 million, I heard others bought for as much as N30 million.
“For instance, the presidents of the unions would bargain with the board and pay for instance, N100 million for a space, then they will begin to divide the space into quarter plots and sell them for between N20 million and N30 million.
“The practice soon blew into the open, necessitating the decision of the government to fully concession the complex”, revealed a member of Auto Spare Parts and Machineries Dealers Association (ASPMDA) who did not want his identity revealed.
It was also gathered that the heist taking place in the complex was exposed by officials of the Lagos State Internal Revenue Service (LIRS) who visited the complex during tax drives. While the officials were doing the enumeration of the several buildings and businesses in the complex, they found out that non was paying taxes to the state government.
The officials, it was gathered, reported back to their superiors who in turn, protested to top government officials in Abuja. Alarmed by the scope of the fraud, the government, it was learnt, decided to totally hands off control of the complex in a PPP arrangement.