Bothered by the state of the nation’s infrastructure on one hand, and failure of some concession deals on the other, members of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), last week in Lagos raised some posers, calling the Federal Government to put in place public – private – partnership structure capable of delivering Nigeria from infrastructural decay.
Some of the posers raised by the professionals are:
- Why do most concession deals in Nigeria end up in the trashcan?
- What is the best way to go about revamping the nation’s decaying infrastructure?
- How many concession transactions have really achieved the intended purposes?
These are some of the questions raised by members of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) last week in Lagos.
It was at the realtors’ second National Mandatory Continuing Professional Development Seminar (NMCPD) held at the Muson Center Lagos, having speakers like Professor Timothy Nubi of the University of Lagos, Director General, Infrastructure Concession Regulatory Commission (ICRC), Mr. Aminu Diko, seasoned estate surveyor and valuer, Gboyega Fatimilehin and Professor Abiola Sanni.
Collectively, the experts said the reasons for far and unsuccessful concession in Nigeria stem on “Projects Preparation Gap” including the lack of well-prepared bankable PPP projects where investors are sufficiently assured by the commercial technical feasibility, the risk allocation, the public sectors contractual commitment and capacity as well as the intentional and legal framework.
Besides, they unanimously reaffirmed the fact that estate surveyors and valuers have great potentials and profitable professional role to play in real estate and urban regeneration concessions, said although the government says it is opened to PPP projects, it was rather regretful that the nation’s infrastructures keep dilapidating by the day.
Consequently, they made far-reaching recommendations that would take the nation out of the wood.
In a communiqué release after the event, the speakers said that the success of concession arrangement in Nigeria must be anchored on the strict application of the real estate value chains – land acquisition, entitlements, infrastructure developments, vertical development, primary capital markets and secondary capital market, adding that this process would ensure a holistic and enduring development unlike the present practice where concession arrangements are taken from the middle leading to the failure of many.
For the country, the speakers said: “Nigeria, must develop a market from raising capital for infrastructure development, if our concession arrangements must succeed. There must be proper legal structure to protect the parties to a concession. The government at all levels should create the enabling environment to attract direct foreign investment in the real estate sector.”
Practitioners in the real estate were tasked to go the extra mile by participating in the stock exchange market. “The real estate sector must establish a platform to participate in the stock exchange market in other to access some institutional and government funds like the pension fund for development.”
In their submission, concessions should be used in urban regeneration for speedy development and reduction in the housing deficit.
Alluding to the practice in the developed world, the speakers said it was high time the nation’s mortgage sector is revamped to perform to the optimum. “Finance being a major factor in concession execution, the present mortgage system is not sustainable, mortgages should not be less than 15 years at best 25 – 30 years as it is the case in other parts of the world.
According to them, the present federal government projects under the ICRC approved pipeline are largely real estate based providing immense opportunities for estate surveyors and valuers and therefore estate surveyors should be the key driver in real estate and urban development concessions putting together the SPVs.
While hailing some projects like Festac phase II, Golf Estate in Port-Harcourt and some others in Lagos State that have succeeded through concessions, they said urged estate surveyors to leverage on shared mixed used model, private finance initiative and built-to-suit lease-back, which are all models of concession or PPP that applicable to real estate sector.
Meanwhile the institution also inducted 284 associate members into its fold.
Source: Emmanuel Badejo (The Guardian)