LITFC: FG Terminates Concession Agreement with Aulic Nigeria over Alleged Contract Breach

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Ugo Aliogo
The National Council on Privatisation (NCP) has terminated the concession agreement it signed with a concessionaire, Nicholas Eze of Aulic Nigeria Limited, the former landlord of Lagos International Trade Fair Complex (LITFC) citing breach of contract agreement.

Briefing journalists on the development in Lagos, the Executive Director of LITFC, Mrs. Lucy Ajayi, said that one of the breaches of the contract was the non-remittance of lease fees to the federal government totaling over N6.5 billion from 2008 to 2017.

She stated that due to the non-compliance with payment, the contract was terminated, noting that the property has depreciated from the original state which it was when government handed it over to the concessionaire.

She also noted that Eze had an agreement with Lagos Trade Fair, but the Bureau of Public Enterprises (BPE) did the agreement on behalf of Lagos International Trade Fair, adding that the contract was a development agreement.

Ajayi explained that the terms were that he would pay N40billion for the 30 years lease and government started with a N100 million. According to Ajayi, the amount to be remitted by the concessionaire was increased to N1billion per annum three years ago. She said: “ They did it very small because he just took over and therefore, we didn’t expect him to make profit in the third and fourth year. But we assumed that by the fifth or sixth year, he should have made profit.”

Ajayi stated that in the last three years, Eze failed to remit the N1billion naira annually, but instead, he began selling most of the land he was supposed to use for developmental purposes, “so that people could build whatever they want to build. Even without building approvals.”

According to Ajayi, “It was Bureau for Public Enterprises (BPE) policy that you privatise so that you can make more money. He reneged on the agreement. Initially, he thought BPE concessioned the complex to him for that N40 billion. He said he didn’t know that he was not going to inherit the stakeholders, but the stakeholders already have agreement before he came.”

She explained: “When he was challenging that issue, the NCP in 2013 said if there is this problem why don’t you come and let’s workout those stakeholders’ areas from the other areas, then we will re-compute what you will be paying. He agreed and signed a Memorandum of Understanding (MOU), when they say they were going to bring facility auditors to come and audit to tell him the actual amount that he will be paying.

“Then he went to court to get an injunction to stop that process in 2013. I saw an order which said maintain status quo till December 2014. He refused and was hanging on that injunction till I came in April this year. So we cannot continue with him. He is making money. He threw us out of the Administrative block and took over the gate. When I came in, I tried to get in touch with him, but I couldn’t. I have a four year mandate to revamp this place and he wasn’t coming up with a reconciliatory move.

“I tried to reason with him and see how the issues can be resolved. The challenge he was facing was with my predecessors not me. I didn’t know how they went about it. But for me I’m not against reconciliation. Later, he wrote a letter congratulating me when he heard that NCP was inaugurated. This letter came after about three months, when I had made so many moves for us to sit and talk. I’m not against reconciliation bearing in mind the amount he owned. He owned N5.2 billion with interest which if you don’t pay adds up and it rose to N6.5 billion. I have been operating from Abuja for the past eight months. He didn’t allow me gain access to my block here.

“There is no injunction to me possessing this land. There is an injunction stating that I cannot carry out the facility audit. I have not flouted that. There is no law preventing me from possessing my land as the landlord. If he thinks he is right, let him take me to court. Apart from that the court order was on jurisdiction. He was supposed to go to the arbitration court. He went to Federal High Court, which cannot hear the case. The case has not been brought up for mentioning. For them not to have problem, they gave him an order to maintain status quo. The status quo he was supposed to maintain was not to take the facility audit.”