Stepping into the premises of this once a household name in the Nigeria facility construction business, it would not be out of place for one to immediately assume he has entered a restricted area of which trespasses is punishable under law. The premises could be likening to a deserted site but for the few vehicles and dusted assorted cars. Inside the building of Nigeria’s oldest construction company was not in any way different. Though, the edifice with interiors befitting a world class construction company was however left with empty chairs and desks with no sign that is been used recently. Too quiet indeed for a company whose business is to hit the hammer on the nail.
Costain West Africa Plc was incorporated in Nigeria as a private limited company in June 1948 with Costain Group UK as its subsidiary. It took over the various works being undertaken then by John Holt and Company (Liverpool) Limited’s building department. John Holt established a world-class reputation in building and civil engineering, open-cast mining, dredging and other construction related activities throughout the world.
In the last 63 years, the former construction giant has executed a wide range of building and civil engineering projects throughout Nigeria for private organizations, Federal and State Governments. Costain West Africa Plc went public on the 13th of March, 1974. Its shares were quoted on the Nigerian Stock Exchange (NSE) subsequently. The company was also the first construction company to be quoted on the NSE.
As at 2009, before things started falling apart for the company, records put the total employees of the company at 1,942; a figure ranking it as one of the highest employers of labour in the construction industry in the country at the time.
Some of the projects of the company had successfully accomplished include:
West African Gas Pipeline Company Ltd in JV with DBN Delattre-Bezons Nigeria (Lagos Beach Compressor Station for Nigeria – Republic of Benin – Togo – Ghana Gas Pipeline); Kano State Government (Tamburawa Water Treatment Plant, Kano) in JV with PCI of South Africa; Chevron Nigeria Ltd (Chevron Estate Complex Lekki, Lagos.); Shell Trustees Nigeria Ltd (Shell Trustees 1 & 4 Estate, Abuja); Oyo State Government (Ogunpa Channelization, Ibadan); Delta State Government (Delta State Government House Complex Development at Asaba, Warri City Stadium, Warri); Rivers State Government (Initial Construction, Renovation and Refurbishment of Rivers State Secretariat, Port Harcourt); Mobil Producing Nigeria Unlimited (QIT – Qua Iboe Terminal Facilities Ibeno); NLNG (NLNG Lay down Project in Port Harcourt; Shell Trustees Nigeria Limited. (Shell Trustees Elelenwo Estate; Port Harcourt): Nigerian Railway Corporation contract, (Renovation of rail tracks Jebba – Kano) Remodeling and Renovation of Akanu Ibiam Stadium Main Bowl Luxury Residential Apartments, Ikoyi, Lagos among others.
The beginning of the trouble
A senior staff of the company, who pleaded anonymity because of his position, told BD SUNDAY that the Karim’s family (the family of the current CEO Ayodeji Karim) acquired the company in 2008. “They have been managing the company from then trying to stabilize the economics of the company. They went into IBO in 2008 which they realized money”, he said.
According to him, since then, business at the company became table and has been doing very well until they started the down turn witness largely due to mismanagement. “Overtime, we started noticing a deviation from the normal norms of paying salaries as at when due. We told the management to address the issue because workers needed to be paid their salaries so that they can perform optimally”, he said.
He said what became more worrisome was that the workers noticed since 2010 the company stopped remitting pension scheme of its workers. “They deduct our union dues and taxes without paying to the appropriate bodies and that is against the law. For the past two years taxes that have been duly deducted from our salaries are not remitted. Our management, the Directors, they relocated from here to the Headquarters (the parents company. For the past 4 weeks they have not been here. What they have decided to do was to sack the entire workforce and in doing that, they will pay everybody one month salary and subsequently pay the remaining gradually. We said that arrangement was not okay by us. If you want to disengage us, pay us everything due us. They have refused to come here”, he said.
He said further that, few weeks ago, First Bank officials came to seal up the company. He said the reason given for the intended seal up was that Cosatin West Africa has gone into receivership. “It was hell let loose that day. It was later we actually discovered that First Bank was asking for loans our company had taking from them which the bank was asking them to pay” he said.
Fredrick Imhazetu, a retiree of the company said he started working with the company long ago in Benin City, the Edo state capital until recently when he was transferred to Lagos. “I was part of the staff that built the brewery in Benin. I have spent 38 years with this company. The amount Constain owe me is up to N10M”, he said.
Neither Fredrick Imhazetu, a-66-year-old father of 6, nor his wife who came with him to ask for his money was without ailment. He could barely speak when asked questions. The wife with a big scare on her left leg actually assisted the husband in answering some of the questions. She lamented the painful condition her husband and her family had had to go through as a result of the non-payment of the husband’s entitlements.
“We have been coming here since the beginning of last year and the management kept telling us to hold on. Nothing has been done. My husband retired last mid last year and there is a letter to that effect. He never stole any of their properties while working with Costain”, she said in resignation.
Rauf Adekundle, another retiree said he spent 24 years with the company until he retired over a year now. “They have not given me anything until now. The company owed me over N2 million and I have documents to that effect. My children who are supposed to be in school are at home right now. I owe house rent. Paying electricity bill is a big problem for me now”, he lamented.
The Union Leader in the company, Joseph Chika, told BD SUNDAY that they decided to shut the complex during the protest last year because the management staff of the company had relocates to a subsidiary company (Shoreline Electrical Company Limited) in Illupeju where they accused senior staffers of spending the looted treasure of Costain West Africa
“They are now using this place as a branch. They have sold almost everything here. They have started selling our property even in Minna Niger state as I talk to you now and buying private jet when over 1,000 plus retirees are affected by their actions and inactions”, he said.
Ibit Omon,said his company (Fyestpida Nigeria Limited) was supplying petroleum products to Costain West Africa. He said supplied a truck of diesel in 2010 valued at N4.6 million.” I have not been paid 1kobo until today. Every time they would say there is no money and that NPA (Nigerian Port Authority) and FG owes them money but you find them buying big cars. There have been times even when they are around the securities would be told to inform us that ‘oga is not around’”, he said.
Ndidi Benson, Secretary to the Union, said the issue was not that the company was not making profits. “All the proceeds from here they have used in establishing another company. They own Michelin Tyres in Portharcourt. As I am talking to you now, they have oil well. We did a work in Minna Niger state worth N12 billion recently. You can go and confirm from Nigerian Railway. How can they claim not to have
Lagos-Kano passenger rail track recently awarded to Costain West Africa PLC by the FG
money? Where did they have the money to buy Michelin in Port Harcourt if not from here? They control all the whole Mr. Biggs in Nigeria. What actually cause this fight was because they threatened to sack all of us without benefits. It’s total mismanagement. It is the reign of Karim that brought this misfortune. It was never like this. When Karim assumed leadership there was controversy on who to become the MD”, he said.
Attempt to speak to Ayodeji Karim, the Managing Director of Costain West Africa PLC, did not yield meaningful result. When he was reached on the telephone he promised a meeting where he would clarify the current position with the company the following day. The propose meeting was never to be as someone who picked his call at the time for the scheduled meeting said Ayodeji Karim was busy attending a meeting somewhere. As at the time of filling in this report he had yet to return calls to his cell phone and reply text message clarifying the questions and emphasizing the need to go to press on Friday.
But, President General, National Union of Civil Engineering Construction Furniture and Wood Workers (NUCECFWW), Comrade Amechi Asugwuni told BD SUNDAY In his office that the issue of Costain to the best of his knowledge and in his capacity as the President General of the union, was concluded to be the basis of mismanagement.
“One thing is to have a company and another is to managed and sustained it reasonably. Costain in the past did buoyantly and were actually a force to reckon with in the industry and because of that they gained a lot of projects and executed them. When you pay more than you received you run into deficit. As far as I am concern, they could not at that particular beginning nip it in the bud. So, they thought that it was a being of the Managing Director; so the first thing they did was to change the MD and brought in another and the same thing persisted. It was so bad that any MD that comes in takes undue advantage of the scenario and feed himself. Before they investigate it would take another year. By so doing the clients would know that there is a problem in Costain. When you have mismanagement problems it affects your chances of winning contracts because nobody would want to put money in that dimension knowing fully you may use that money to pay depts.”, he clarified.
He said when he came to offices in February last year, he tried asking questions about companies that were not meeting up with their membership dues and salaries to workers and Costain was one of the companies mentioned to him. “Constian was one of the companies that we registered in the beginning of this administration as of the companies violating the rights of workers in terms of giving them their legitimate earnings and we summoned them”, he said.
He said further that the travail of Costain was a duty of failure and incompetency on the part of the board because it is not about been agile but that the competency of a man is his moral background. “This issue of Karim has always been there. Whether Karim steal money or not, I don’t even have the interest of pushing such matter. Those that should investigate and prosecute anyone found embezzled the company’s money should be the board. As for the workers we have resolved to ensure justice is done. However it will take them to get the money we don’t know. All we know is that legitimately our workers are entitled to their benefits”, he said.
“Some of the incompetency we found in the industry are deliberate while some are out of ignorance. When board appoints as a result of mare recommendation by friends or when appointment is made by sentiment certainly the end may result in jeopardy. The issue of managing a company goes beyond speaking grammar. We are talking about technicalities! We are talking about strategies! When these things are lacked in a man, the possibility of failure is not far”, he said.
He said looking at the way things are the moment, Costain was set to be revived. “In recent development, there is one man call Mr. Fernado who has taken over the administration of the company. We were able to meet with Mr. Fernado late last year and reached agreement with him concerning the workers they are owing. The problem they had was how to upset the payment once.
“Mr. Ferbado was begging for assistance. We looked at it and asked what is it we can do in order to help revived Costain? So, we suggested that the workers that have been put in redundancy should be paid certain figure at least to take care of their families and spread the remaining within few months in order to offset the payment which they have started. If they continue in that line they should be able to offset the dept before June this year. There is chances that they can grow because by the time clients see them offsetting these bills without crisis they will begin to regain confidence that Costain can do it again”, he said.
Another turning point for Costain was winning the tender to rehabilitate a section of the existing Lagos-Kano passenger rail track, the 638km line connecting the cities of Jebba and Kano. One of the largest projects the company has taken on in the last 10 years, the deal was said to worth US$300 million as it steams towards completion allowed the company to redirect its focus.