N22bn private investment for Utako Motor Park
Agreement for the redevelopment of Utako Motor Park into ultra modern transport centre/shopping mall was signed by the Federal Capital Territory Administration (FCTA) and Intercity Transport Terminal Limited (ITTL) on Tuesday April 1, 2014 in Abuja. If this agreement works, what is today Utako garage will be transformed into a modern transport hub.
The agreement involving FCTA, Abuja Municipal Area Council (AMAC) and ITTL is for the transformation of Utako Motor Park into ultra-modern transport terminal in line with the FCT master plan. It is one of the numerous public private sector collaborations in Abuja.
The private firm, ITTL is given the land to construct the terminal using its own finances, manage it for 25 years to recoup its investment and then transfer ownership to government - FCTA/AMAC. While building the terminal, the private firm must work in conformity with the Utako District detailed site development plan and layout with approved final engineering designs and drawings.
The project to be executed in four years will gulp $134,483,543 (N22 billion). This involves compensation and resettlement cost of third party liability. ITTL and its sponsoring contractor, Nerida International will jointly finance and execute the project in its entirety.
The Minister of State, Oloye Olajumoke Akinjide who signed the agreement on behalf of FCTA said the agreement demands that the developer makes equity contribution of a minimum of 15 percent of total project cost in 90 days. He is also to secure a debt of 85 percent of the total cost from a reputable financial institution as the principal debt.
The minister said the agreement took effect from April 1, 2014, the day the contract documents were signed by government and the investor and will remain in force for 25 years.
“For me, I would say this project is government at its best. This is a pioneer flagship prokect. In developed countries, there are motor terminals. Ours aren’t what they should be. We feel Utako is in the heart of the city,” the FCT Minister of State said.
While ITTL holds 70 percent stakes, the AMAC and FCTA hold 20 and 10 percent respectively. The project is to be executed in 48 months.
According to the Chief Executive Officer (CEO) of ITTL, Prof Inyangete, the transportation terminal will have social-political implications. He said it will create a sustainable vehicle for generating mass transportation even as it will create a new business and economic opportunity - it will build capacity.
While responding to questions from journalists, he said, “We believe our project has attracted multi-million dollar foreign direct investment to the economy of Nigeria.
“In the spirit of partnership, this project which is a PPP between us the private sector and the public sector as shareholders, the public sector owns 30 percent of the initiative. In that spirit of partnership we request our public sector partners to respond by providing us permit, licenses and approvals that are necessary for timely implementation of the project.
“One of the challenges is securing vacant position in good time. Success will depend on commitment of our partners in revamping the FCT transportation policy to address the need for inter module transport system with rail transportation system integrated.
“In order to enhance the long term impact and sustainability of the proposed transportation hub, we use this opportunity to request the FCTA to allocate land to us for building a factory. This factory will bring in the technology that we’ve spoken of - technology that will accelerate the
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process of construction as well as make it more affordable for affordable housing scheme that is dear to the government of the day.
“We also need land for a dedicated workshop and maintenance garage for us to build a place where you can truly service, not just buses but all the heavy duty trucks in the nation.
“We have brought passion, commitment and love for what we set out to do. We will indeed deliver and we do not intend to fail you.”
A senior FCTA official who did not want his name mentioned said, “We did due diligence and the agreement is structured to make it work. We have been working on this project since 2012. We travelled across three continents to get the consortium that has the capacity to deliver.”
But transporters in Utako garage have been told this plan to turn their place into a modern transport hub. When Daily Trust visited the place last week, the Chairman of Branch One Long Journey Taxi, Utako, Alhaji Abubakar Ustaz said, “We heard it from the press. Government hasn’t met any of us on this - no word from Abuja Municipal Area Council, none from FCT [administration].”
He said, “It’s here we get our daily bread but anything government says, we have no objection. But we would like government to give us alternative place - it shouldn’t be far from the main city.” Government has not said what will happen to the numerous transporters and their customers when construction works start.
A transport worker in the park said if government fails to give appropriate alternative place, there will be proliferation of motor parks in the city - many will try to create garages for themselves.
What is today Utako garage was Wuse garage. When development plans were enforced, the motor people were chased away from Wuse. They regrouped at Berger Junction. Here too, they were chased to Zuba. But transporters and travelers complained that the place was too far and movement to the city centre was becoming more challenging due to activities of bad people who camouflaged as taxi drivers. Often, they picked travelers and robbed them on the way between the city centre and Zuba.
Government hearkened to the cries. The late Mamman Kontagora who was Minister of FCT, in February 1999 approved the return of the transporters to Utako garage.
There are eight transport union branches in Utako garage - two town service, six interstate. Over 1,000 vehicles come in and leave with passengers in this park daily.
The place does not fit the status of Abuja as transport terminal. The park’s scruffy state is worsened by the demolition of what was called Bakassi market in the Central Area. Some of those who lost business premises in the market migrated to Utako garage. Now, apart from transporters, the place has metal scrap collectors forming what is popularly called Panteka, motor repairers ( mechanics) and all sorts of hawkers resulting chaos in the place.
This is not the first time government is partnering a private firm on Utako Motor Park. An indigenous company, Ekeson Motors was at a time engaged to assist government run Utako garage. How well that collaboration went cannot be given here.
File photo: Utako Motor Park