By Jude Njoku
After initial delays occasioned by the Lagos State governmentâ€™s stop work order, Messrs UACN Property Development Company (UPDC) Plc which led a consortium of firms and financial institutions to buy the luxurious 1004 Flats in Victoria Island from the Federal government, has pledged to complete and deliver the refurbished estate to its new allottees by the end of the year.
Managing Director of the company, Mr Abdul Bello who disclosed this to Vanguard Property & Environment also unveiled plans to complete the refurbishment of Novotel (former Festac â€˜77 hotel) as well as overhaul the multi-billion Naira Victoria Mall Plaza.
â€œThe scope of the 1004 project was bigger than what we initially thought. If you look at 1004, it is a unique project. We ran into problems very early in the life of the project. We bought it from the Federal government and the Lagos State government said, well, you are based in Lagos, you have to pay some infrastructure development levies.
These were not in contemplation at the time we bought it from the Federal government. Since we didnâ€™t know how to deal with that development, we were discussing with the State government until they shut the place. For four or five months, no work was undertaken on that site.
In the intervening period, prices of materials to be used had gone up and the contractors to whom advanced money had been paid had also spent that money, not for they purpose we had paid them. When we asked them to come back after the reopening, it was a tug of war because they had spent the money and wanted more money. They also came up with claims that prices have gone.
These matters took time to sort out but now, we have a new project team there and the pace of work has quickened. We are looking at delivery this year. The low-rise apartments are almost completed and we see the highrise being delivered in the next quarter,â€ he said.
On the hotel project, the UPDC boss said the company grossly underestimated the scope of reconstruction work required. â€œ The hotel has undergone a lot of work since we started renovation almost five years now. Again, it was the first hotel project for UPDC.
We have not done hotels before. When we bought it from the Federal government, we thought we just renovate for 18 months and get out of the place and start running the hotel but almost five years down the road, we have found out that we underestimated the amount of resources and the renovation work to be done there, the technical capacity required which was not available locally plus the attitude of local contractors especially as it affects deadline. That hotel will also be opened this year,â€ he said.
Meanwhile, due to the high demand for shopping malls in the highbrow Ikoyi and Victoria Island axis, UPDCÂ has decided to overhauled its initial plan to build a multi-billion Naira Victoria Mall Plaza in the area.
Mr. BelloÂ who explained why the project was overhauled saidÂ the company discovered from a survey that there is a very high demand for shopping malls hence it decided to take advantage of the opportunity. â€œAlthough we have already piled the site for the proposed office complex, we are immediately commencing work on the shopping mall and car park,â€ he said adding that the first phase being handled by Messrs. Cappa & Dâ€™alberto Plc had reached the roofing level. Originally, the plaza was billed toÂ have 36 apartments, a 15-storey office tower, a multi-storey car park with about 400 spaces, a shopping centre, and a 160-room hotel.
The plaza is being developed on aÂ 435 metres stretch of land at Bishop Aboyade Cole Street on Victoria Island. It starts from directly opposite the VI Dulux Colour Centre and tappers off just before the Mobil Head Office Complex.
Mr. Bello explained that the project is being developed in four phases.
The first phase of the mixed-use development is a 12-floor block of 36 three-bedroom residential apartments and is currently at the final stages of construction. The 36 units, according to him, comprise 12 three-bedroom maisonettes and 24 three-bedroom flats, as well as six one-bedroom studio flats.
The second phases will involve the construction of a 15-floor elliptical office complex while the third phase is the development of a shopping mall with a multi-level commercial car park. The final phase is the erection of another multi-storey residential development.
Unstable Naira bane of construction industry- Engr. Williams
THE Federation of Construction Industry (FOCI),Â umbrella body for the major players in the nationâ€™s construction industry,Â has decried the high withholding tax being charged its members for construction jobs .
The groupÂ also decried the slide in the value of the Naira against foreign currencies, pointing out that the falling naira is frustrating FOCI members who form the core contracting firms in the country.
â€˜Withholding tax is usually deducted at source from payments by the Federal government. However, at the completion of any contract, to ensure non-evasion of tax, companies are audited and tax is computed and submitted for approval. But we find out that what the government is charging us as withholding tax is rather too highâ€™, FOCIâ€™sÂ new President, Engr. MobolajiÂ Williams said.
Engr WilliamsÂ explained that these developments have impoverished construction companies. Against this backdrop, the 53- year old organisation has chosen â€˜Multiple taxation and its effect on the construction industryâ€™ as the theme of its annual general meeting (AGM), slated for Abuja later this month..
Lamenting the non-payment for jobs done and certified (which ought to be made within 28 days), the FOCI president said that the situation has even been made worse following an agreement the body entered into with the Federal Government in 1988.
The agreement stipulates the payment of 30 per cent for foreign content to contractors. The FOCI boss explained that by the time the money is eventually paid, the exchange rate would have become higher.Â FOCI, Engr Williams said, will seize the opportunity of the forthcoming AGM to meet with the Minister of Works, Housing and Urban Development to discuss some of the issues affecting the construction industry, particularly multiple taxation.
Calling on the government to come up with a policy to harmonise taxation, Engr. Williams said construction firms are compelledÂ to pay five per cent of their total contract sum which is deducted at source to avoid a situation where theyÂ Â (construction companies) evade tax payment.
According to him, this includes cumulative tax, education tax and development tax, pointing out that these taxes are carried over to be paid from the cumulative tax which he said should be harmonised.
â€˜We will make our presentation to the Minister at the AGM and through other means available to us. The purpose of taxation discussion is to make suggestions to the government.
For instance, we will let the government know that contractors can manage the cumulative tax in the development of the Niger Delta. We believe the fund will be better managed by the private sector than the government. This is because any money that goes into the governmentâ€™s coffers is difficult to retrieve.
Continuing, Engr. Williams lamented the negative impacts the fall in the value of the Naira when compared with major currencies, is having on construction companies. According to him, most of the jobs currently being executed by FOCI membersÂ were won when the value of the naira was higher than it is presently.
â€˜Most of the jobs being executed by our members were awarded when the naira was stable in 2002, and the foreign exchange rate then was between N115 to N120 per dollar. The exchange rate of dollar today is N160 officially while it is between N174 and N176 at the black market.
This has great consequences on the value of government contracts. The government should firm up the naira and not allow it to erode the little resources available to the country
â€˜What we need now is stable currency. The government must make sure the naira is stabilised. Unstable naira is killing construction industry in Nigeria. Some jobs which ought to have been completed in two years or less, have been on for about nine to 10 years mainly due to lack of funding,â€ he posited.