Yesterday, Governor of Oyo State, Engineer Seyi Makinde flagged off the concession of the long moribund Agbowo Shopping Complex to Messrs Whitestone Global Limited at a cost of 4.9 Billion naira on a long lease of 50years! The company was given a mandate to renovate the complex to a commercial real estate and a 4-star hotel within 24 months. In his remarks at the flag off event, Governor Makinde took a swipe at the immediate past administration of late Senator Abiola Ajimobi which signed an MOU with Agbowo Mall Infrastructure Development Company Limited to remodel, redevelop and rehabilitate the expansive complex at a cost of 8 Billion naira. The said MOU was said not to have seen the light of the day until the tenure of the last administration wound up.
However, the concession of the complex by the current administration was not a smart move. It was not well thought out. Everything was wrong with the concessional arrangement; from the funding of the concession to the long lease of 50 years. It’s worthy of note to revisit the story behind Agbowo Shopping Complex.
The complex was constructed by the administration of late Chief Bola Ige in 1983 on 30 plots of land. The complex was being managed by Oyo State Housing Corporation and had been a source of employment and job opportunities for the teeming people of the state while it contributed to the economy of the state and a source of revenue to the government. But Agbowo Complex suffered neglect and mismanagement as successive governments in Oyo state made no effort to resuscitate the sprawling monument until the administration of late Senator Abiola Ajimobi decided to renovate it. The immediate past administration signed an MOU as explained above but a protracted court case remained a clog in the wheel of progress on the renovation of the abandoned complex. It’s however not clear whether the present government has resolved the issue of the court case on the complex before the governor went ahead to initiate the concession.
It ought to be commendable that, at last, pragmatic efforts were being made to get Agbowo Shopping complex up and running. But what cast doubts on the sincerity behind the latest flag off of the concession arrangement are the manner of funding and the years of lease. It would be recalled that during the first tenure of Senator Abiola Ajimobi, Oodua Group under the chairmanship of Bar Sarafadeen Alli and Mr Adebayo Jimoh as the Group Managing Director, embarked on construction of Heritage Mall and redevelopment of Cocoa Mall in Dugbe Business District at the cost of 3 Billion naira. Construction of Heritage Mall was wholly financed by the Oodua Group, costing 2 Billion naira while Cocoa Mall redevelopment was carried out in partnership with Frontline Developer Services Limited, costing 1 Billion naira. Oodua Group is owned by governments of Oyo, Ondo, Ogun, Osun and Ekiti states. After the construction and redevelopment of the two malls, Oodua Group outsourced the facilities to a consortium of facility managers who see to the functionality and maintenance of the malls. Heritage Mall and Cocoal Mall, housing Shoprite, cinema house and other important stores are doing well as we speak.
If Oodua Group, jointly owned by states in the south west, including Oyo state, could finance construction of malls and other facilities without concession or long lease, what stops Oyo government to toe the same more viable path? 4.9 Billion naira is too paltry to seek concession and long lease for. If the present government is still creditworthy, it should be able to get a consortium of local banks to finance the project after which the government can also engage a consortium of real estate managers to manage the facilities. It should not take more than ten years long to repay the local banks the loans and interests from the purse of the state while revenues from the management of the rejuvenated complex will have been accruing to Oyo state. This is unarguably a win-win situation for government in terms of increased revenue, for people in terms of employment and job opportunities and value chain, for investors in terms of return on investment and for facility managers in terms of professional engagements.
The present concessional arrangement of 4.9 Billion naira equals 50 years is a win to Messrs Whitestone Global Limited, a win to people in terms of job opportunities but a huge loss to Oyo state in terms of revenue as acute depreciation will have befallen Agbowo Shopping Complex after 50 years of its renovation when the state is expected to take it over. It may not be wrong to dwell on the allegation that the administration of Seyi Makinde may be preparing Agbowo Shopping Complex for personal gains of its principal. Even if Governor Makinde was going to spend 8years in Agodi, it will take another long stretch of 44 years for the state to recover Agbowo Shopping Complex from Messrs Whitestone Global Limited, which must have fed fatter and become chubbier on Oyo state’s patrimony. If we spend three years to prepare a man for madness, when is he going to storm market? If Messrs Whitestone Global Limited manages Agbowo Shopping Complex for 50years to recoup 4.9 Billion naira and interests accrued, when will Oyo state begin to reap her investment and profits on the complex? Governor Seyi Makinde should be told that 4.9 Billion naira should not be equal to 50 years!