• Thursday, February 29, 2024
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BusinessDay

Investors take over Festac Phase 11 devt, seal 30-yr concession pact with FG

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After over eight years of processes leading to the concessioning of Festac Town Phase 2 Estate, a consortium of investors led by Messrs Fung Tai Engineering Company Limited (FTECL) have taken over the development of the 1,126-hectare estate in Lagos following a 30-year concession agreement they signed with the Federal Government.

Since April 2013, the investors have been preoccupied with extensive preliminary project development activities on the estate including surveys, field studies, site investigation, environmental impact assessment, town planning, funding and third party appraisals and agreements.

By that concession agreement, the consortium under a special purpose vehicle known as New Festac Property Development Company Limited (NFPDCL) will undertake land reclamation, sand filling, infrastructural development, marketing/sale of over 7,000 plots of land to be created from the reclaimed land, facility management for the 30-year period of the concession before reversion to Federal Housing Authority (FHA)—the housing development agency of the federal government.

Federal Government’s earnings from this project is estimated at N25.765 billion as premium for 30 (thirty) years of concession and an additional N150 million ground rent annually. Both parties to the concession have agreed to a review clause of the earnings to reflect market realities with likely higher earnings anticipated at the end of the day.  

In her speech at the concession agreement ceremony, Akon Eyakenyi, the Minister for Lands, Housing and Urban Development, noted that beyond the financial benefits derivable from this concession, about 3,000  jobs would be created and thousands of housing units, approximately 50,000, would also be delivered at the estate.

The minister, who was elated for concluding this process that started in June 2006, was optimistic of its success, noting that individual members of the consortium which include PW (Nigeria) Limited, SCC (Nigeria) Limited and Energo (Nigeria) Limited all have track record of performance in Nigeria and diverse experience in construction and infrastructural development.

According to her, “the realization of this concession will transform the part of Lagos called Festac Town into a modern city and yield great benefits in the infrastructural and socio economic development of Lagos.  The serviced plots to be realized through the concession shall be complemented with green areas, off street parking, power supply, petrol station, shopping malls, hospitals, hospitality centres, well laid roads, water  works, street lights, sewage disposal systems, incinerators and all necessary support infrastructure”.

Also speaking at the agreement signing event, the concessionaire thanked all stakeholders for the confidence reposed in their company, assuring the stakeholders of the company’s full commitment to the noble objectives of the concession in the implementation of the project.

The Federal Government in the ‘70s acquired 2,024 hectares of land in Lagos for housing development. Part of this large expanse of land was developed in preparation for the hosting of second World Black Festival of Arts and Culture (FESTAC) hosted by Nigeria in 1977.

This development left a balance of 1,126 hectares of swampy land now known as Festac Phase II and following government’s approval for the reclamation and development of this phase 11, FHA decided on Private Public Partnership (PPP) policy, hence the concessioning that has just happened.

CHUKA UROKO