Social & Health
Lagos
Implementation
Ministry of Trade and Investment
18-05-2018 12:03:53
The project is awarded to Build Hope Services International Limited (BHS) to efficiently maintain the Tafawa Balewa Square Complex for 30 years and provide additional facilities that will improve the use of the complex for the benefit of the general public. BHS is also saddled with the responsibility of reporting to the regulator for the purpose of better guidance. Addtionally, parties shall Parties shall bear their respective costs upon the expiry of the lease term and If the a mutual consultation fails during a dispute then either party may submit the matter to arbitration which shall be governed by the Rules of Arbitration of The International Chamber Of Commerce... see section 16.4 of the contract.
Maintenance of the Tafawa Balewa Square (TBS) which is a rectangular 3.9615 hectares ceremonial ground originally called Race Course in Lagos Island Lagos state. It is constructed of mass concrete. There are 6 (nos) entrance into the parade ground. The entrance were provided with a heavey duty steal-gates. TBS also has a pavillion with a sitting capacity of 55,000.00 people and it is a Legacy Contract Concession. Additionally, it has a multi-purpose hall with a floor space of 1289.61 metter square. It also Has a school building with floor space of 220 square meter.
To lease the property as a brown field project and help develop, make certain improvements, perform certain operations, and provide good services for the lease property and movable assets.
In line with the then Federal Government's privatization and commercialization policy, approval was obtained in 2007 for the concession of TBS to Building Hope Services (BHS) International which emerged the preferred Bidder in the concession transaction, The concession of TBS was leased to BHS International for a lease fee of N9.5 billion to be paid over 30 years. This lease fee is broken down to be paid on an increase based of One Hundred Million Naira (N100,0000 million) each year for the first ten (10) years, Two Hundred and Fifty Million Naira (N 250,000,000.00) for the second ten years, Five Hundred Million Naira (N 500,000,000) for the third five (5) Years and Seven Hundred Million Naira (N 700,000,000.00) for the last five (5) Years according to the schedule given in Appendix E of the Contract.
Done in 2006 before the complex concessions.
One-pager prepared by the ICRC, attached.
1 June
Pursuant to the NCP approval, BPE, on in June, 2006 invited bids for right to enter into an agreement with the BHS for the lease of TBS as described in Appendix A of the Contract Agreement, make certain improvements to the Lease property and maintain the Premises as described in the development plan
7 February
Commencement of operation after fulfilling initial financial obligations. This is fifteen days after effective date ( This is 90days after the Agreement (Execution) Date.).
7 February
The Development Plan is staggered over the first ten years of the Concession Period. The remaining period of the Concession will be devoted to the management, monitoring and maintenace of the structuress to ensure sustainability.
7 February
The Development Plan is staggered over the first ten(10) years of the Concession Period.
7 October
As a result of a competitive bidding process, the right to enter into such agreement was awarded to BHS Limited
7 October
Execution of the Concession Agreement
7 February
This Project terminates at Thirtieth (30th) Annivasary of the effective date.
REDACTED PPP AGREEMENT
Project Summary Sheet
Not Specified
Not Specified
Not Specified
Finance through Equity and Debt
| Type of risk | Description | Allocation | Mitigation |
|---|---|---|---|
| Pre-construction risk | Risk associated with project preparation/Permit and approval risk | Public Sector | |
| Construction / Completion | Construction and Renovation of Complex structures | Private Sector | |
| Cost risk | Cost Overrun | Private Sector | |
| Refinancing risk | Financial Close/Debt servicing/interest repayment | Private Sector | |
| Risk related to change in law, taxes, scope, technical standards, regulatory framework | Project scope, laws, environment, government policies | Public Sector | |
| Exchange rate risk | Fluctuation in country's exchange rate/devaluation/global impact | Public and Private Sectors | |
| Operating risk | Competition, workers action, etc | Private Sector |
| Events of Default | Brief description | Termination Payments | Documents |
|---|---|---|---|
| Insolvency | Immediate termination notice | Pay to the Lessor any and all actual costs, expenses, charges, and/or penalties incurred or sustained by the Lessor as a consequence of such termination | |
| Performance Failure | Fails to perform the Operations for 14 consecutive days in an operating year or 60 non consecutive days in a non operating year. | Pay to the Lessor any and all actual costs, expenses, charges, and/or penalties incurred or sustained by the Lessor as a consequence of such termination |
| Events of Default | Brief description of events of default | Termination Payments | Documents |
|---|---|---|---|
| Government Action | Lease property (in whole or in part) is expropriated compulsorily acquired or nationalized by a Government Agency. | Pay to the Lessee any and all actual costs, expenses, charges, and/or penalties incurred or sustained by the Lessee as a consequence of such termination | |
| Government Action | Lessor event of default in the first perating year | Refund of commencement fee, all construction/develoment cost incurred by Lessee |
The Infrastructure Concession Regulatory Commission (ICRC) has said it has completed plans to commence action plans to resolve the concession issue between BHS International Limited, the concessionaire of Tafawa Balewa Square (TBS) in Lagos and the federal government. The commission, which is saddled with the responsibility of monitoring and ensuring the efficient execution of all Public-Private Partnership (PPP), projects entered into by government agencies on behalf of the Lagos State government said it has reviewed the project’s challenges and would ensure they are resolved. The TBS complex was given out on concession to the company for 30 years since 2008 and it has been dogged by controversy since then. Speaking during a visit by the Commission to TBS yesterday, the acting Director General ICRC, Chidi Izuwah said: “We are not unaware of the law suits involving BHS International and the Lagos State government, the friction with the Nigerian Cricket Federation and a host of others. “We are also informed that one or two committees may have been set up to further strengthen the implementation of this projects as well as an audit exercise which has been conducted as directed by the National Council on Privatisation. In this regard, the commission is here to listen to both parties with regards to the project performance and inherent challenges and thereafter brainstorm on possible ways forward in resolving these challenges.” Izuwah remarked that infrastructure gap in Nigeria is massive and there is no way the massive infrastructure transformation needed to improve the people’s lives and boost the nation’s economy could be bridged without effective collaboration with the private sector. He therefore encouraged both parties to support the efforts of the commission in growing the nation’s infrastructure through PPP which is the most efficient procurement alternative. CEO/Executive Director of BHS International Limited, Mr. Olu Adenodi, had requested the assistance of the commission in mandating agencies of government to commence contract re-negotiation program as decided by the National Council on Privatisation (NCP) to enable investors commit funds to build projects. “We ask that the federal government consider a provision of seven-eight years construction period in the agreement or consider converting the last ten years consumed in multiple disputes as moratorium to enable BHS continue and complete the plan approval,” Adenodi said. He asked that the Lagos State government withdraw the suit challenging ownership of the TBS, which is currently before the Supreme Court to pave the way for unfettered access to funds, the indemnity notwithstanding. In response, the head of management, TBS said BHS International Limited still owed an outstanding remittance fees of N465 million. Usman however, commended BHS for making substantial payments in the last two years but stressed that a lot still needed to be done. “The concession is a developmental concession, which means, in the first 10 years, they are expected to invest to generate more money but unfortunately, because of the circumstances on ground, the issue is yet to be addressed because there are no investments on ground for them to generate N250 million yearly.
