Home » Real Estate » Government has no money to build infrastructure – Babalakin

Government has no money to build infrastructure – Babalakin

The Pro-chancellor and Chairman of Council, University of Lagos (UNILAG), Dr. Wale Babalakin (SAN), has said the government has no money to build infrastructure.

Babalakin said the notion that Nigeria is a wealthy country is false, adding that the only solution to the country’s infrastructure deficit is for the government to create an enabling environment for private investors to provide the required infrastructure.

This, he said, would be achieved if the government begins to respect the rule of law, adhere to agreements, obey court orders and provide incentives for private investors.

The lawyer spoke in Lagos at the weekend during the 2018 Construction Summit organised by the university’s Faculty of Environmental Sciences.

The summit, themed: ‘Smart Infrastructure for Sustainable Competitiveness’, was chaired by Babalakin.

He noted that out of the federal government’s N9 trillion budget for 2018, N2.2trillion goes to debt servicing. He said of the remaining N6.8 trillion, about N2.7 trillion was allocated to capital expenditure.

Explaining further, Babalakin said: “If you go by last year’s performance, total capital released was N1.5 trillion. The remaining money went into current expenditure, statutory reserves and other miscellaneous payments. So the money the federal government can spend on developing the whole nation is N1.5 trillion. This means that N1.5 trillion has to accommodate the serious spending on defence, health and education, among others,” he said.

“For Instance, UNILAG has over 40,000 students. According to the National Universities Commission (NUC), the cost of properly training one undergraduate in a fully accredited course is $3,000. Using a conservative exchange rate of N300 to $1, that is about N1million per student. This implies that UNILAG alone needs N40billion to train 40,000 students per annum. If you multiply this figure by the 40 federal universities in Nigeria, we will be talking of N1.6 trillion. This means that federal universities alone require more than the figure spent last year on capital expenditure.”

Stating that we must learn how to maximize our modest resources, Babalakin said the greatest asset of a nation is its cerebral capacity, adding that we must promote those with enormous intellect.

He said it was regrettable that the government’s failure to abide by the rule of law has slowed down development and scared away many private investors. Sharing his personal experience on the concessioning of Murtala Muhammed Airport 2 (MMA2), which was built and is being managed by one of his companies, Bi-Courtney Aviation Services Limited (BASL), the lawyer said 11 years after the concession agreement was signed, a government agency has continued to violate the terms of the agreement by running a parallel domestic aviation terminal in competition with MMA2.

Babalakin said it was sad the government failed to adhere to the rule of law despite various court judgments and the award of N132b as damages against it in 2009.

Explaining his travails further, he said: “Instead of putting pressure on the government to honour the contract agreement, the banks started harassing us to pay their money. In the first six quarters, we were repaying N1.8billion per quarter to the banks and we were generating N300m. We were losing N1.5billion every three months and we had no public sympathy. So we went to court and the ruling was in our favour. So when AMCON came after us, we said you are an agent of the federal government and those messing up our transaction are agents of the federal government. We took the two of them to court and the court ruled in our favour and told AMCON to go and collect its money from the federal government.

“MMA2 is over 10 years now and nobody has managed to build a similar terminal. This shouldn’t be the case. For every project you hinder unlawfully, 12 will not come in and the country will not develop,” he added.

He also shared his experience on the acquisition of the abandoned Federal Secretariat Complex in Ikoyi, Lagos, by another of his companies, Resort International Limited (RIL).

His words: “After acquiring the property, we started developing it and pre-sold half of the flats we were putting up there at a knock-down price because we were reluctant to borrow money. We wanted to use equity to do most of the development and borrow minimally. It was clearly stated in the agreement in 2005 that the federal government would be responsible for obtaining a ‘No Objection Approval’ from the Lagos State Government, failing which the federal government would be responsible for cost expended, loss of profit and damages.

“The project was later stopped by the Lagos State Government. When all attempts to resolve the matter failed, we went into arbitration. The arbitration panel confirmed our title and awarded us N59billion as damages and the interest is still counting. The shocker came from a bank that bought flats from us and signed an agreement with us. As soon as the transaction went awry, the bank sold that equity investment to AMCON as a debt. We wrote to them that they were wrong and they ignored us. Then they published the company’s name on the list of debtors, which was libelous. Last week, a court ruled in our favour, confirmed that we didn’t owe any money because it was equity and confirmed our N3b damages for the libelous publication of our name on the list of debtors.”

Babalakin said if there is no penalty for bad behaviour, there will be no end to bad behaviour. He said the rule of law is for our collective gain and we must make conscious efforts to improve the legal system. This, he said, would encourage private investors to develop smart infrastructure in Nigeria.

Also at the summit was Abia State Governor Okezie Ikpeazu, who received an award for his “outstanding performance” in infrastructure development; UNILAG Vice-Chancellor Prof. Oluwatoyin Ogundipe; former Director-General, Bureau of Public Procurement, Abuja, Engr. Emeka Eze; Chairman, Royal Institution of Chartered Surveyors, Nigerian Group, Mr. Jimmy Omotosho; and the Dean of the Faculty of Environmental Sciences, UNILAG, Prof. Mike Adebamowo, among.

Credit: ThisDayLive

Leave a Reply

Your email address will not be published. Required fields are marked *