Why mega city development projects in Nigeria linger ...China opens world tallest ‘horizontal skyscraper’ 6-years after
While the completion of many multi-billion naira high-end city development projects in Nigeria continue to be awaited years after construction started, a number of similar projects elsewhere are set to open this year, Daily Trust reports.
For instance, after six years of construction, the highly anticipated Raffles City Chongqing project in China, is set to be opened this year.
Measuring a staggering 1.12 million square meters with a collection of eight towers and a gigantic connecting skybridge, called a “horizontal skyscraper” Raffles City, dubbed an engineering marvel, is said to be one of the world’s highest skyscrapers.
The eighth and final skyscraper of the $3.8 billion megastructure was recently topped out; meaning that Raffles City Chongqing is on course to open this year, developer of the project, CapitaLand, announced in a statement saying that completion is intended for the second quarter of 2019.
Findings showed that similar high-end mix use multibillion dollar city development projects expected to be opened this year include: the Lakhta Center, a largescale modern construction project in Saint Petersburg, Russia. It is a mini city made up of large office and sports complex, a children’s techno-park and a series of free public facilities, including shops, restaurants, cafes and other services which started in 2011.
In Asia, Malaysia’s tallest building at 451.9m called the Exchange 106, whose construction started in 2016, is expected to be completed this year.
In the United States, the 111 West 57th Street, also known as the Steinway Tower, is a supertall residential project. Containing 60 units and opening mid-2019, it will offer an exclusive, centred perspective on Manhattan’s Midtown neighbourhood.
This year, Africa is also expected to witness the completion of several Dubai-style mega projects but none of them would be in Nigeria.
The Pinnacle Towers, the skyscraper under construction in Nairobi, the capital and largest city of Kenya when completed, is expected to become the tallest building in Africa, and the third tallest building in the Southern Hemisphere, at 70 stories and over 1,000 feet (300m) in height. Construction started in 2017 and estimated completion is 2020/2021 and likewise the Iconic Tower being built in Egypt’s administrative capital.
In Nigeria, Daily Trust reports that the $4 billion Abuja City Centre project, the over $1 billion Abuja World Trade Centre and multibillion dollar Eko Atlantic and Abuja Centenary City are among high end, mixed use development and mega-projects whose completion would not happen very soon many years after work started on them.
Construction at Abuja City Centre project has not progressed as expected after recent economic downturn in addition to a number of factors that have delayed the projects.
The project, which draws inspiration from a number of high end city centre developments in the world, like the Orchard Street in Singapore, Central Park in New York, as well as others in London and Dubai, was designed to have eight high rise towers encompassing 5-star hotels, residential apartments, office spaces, mall as well as hospital.
With an investment value of up to $4 billion, Abuja City Centre project was expected to be completed within a period of between 60-120 months; but the project could not progress as fast as anticipated due to some constraints.
Another mega project, the World Trade Centre (WTC) complex under construction in the Central Business District of Abuja, when completed, is expected to be the largest mixeduse development on the West African subcontinent. Former president Goodluck Jonathan launched the project said to cost over $1 billion in September 2011 with an estimated completion date initially slated for 2013.
The completion date could not be met due to several challenges in design, development and even during construction although two of the seven skyscrapers planned for the site, have already been topped out, with the others at various stages of development.
At 110m (361ft), the 24-floor WTC Tower 1, which topped out in 2015 is said to be the tallest residential building in Nigeria, while WTC Tower 2 is the tallest building in Abuja, standing at 120m (394ft).
Plans to get the Centenary City in Abuja back on track have just started after three years of administrative and land acquisition setbacks.
The project was conceived in 2014, as a mixed-use urban development comprising world-class hotels, Grade A offices, residential districts, an international convention centre, sports and leisure facilities, among other amenities.
Construction at the Eko Atlantic in Lagos, dubbed the largest property development project in Africa, was also reported to have been slowed by the recession that hit the country in 2016.
Regarded as the “Dubai of Africa”, the city within a city is being built over 10 square kilometres on tons of sand dredged from the Atlantic Ocean.
Property developers who spoke to Daily Trust identified a number of factors hampering the development of similar high-end projects in Nigeria.
A representative of the company handling one of the four mega projects identified funding, limited expertise and lack of incentives as reasons why Nigeria can’t get such high-end projects completed in record time.
The developer who would not want his name mentioned said, “the major constraint is funding and it is multi-dimensional. It is not just the cash but the things that will unlock cash are not exactly easy. In Nigeria, it is difficult for you to use land as an asset-backed security to unlock financing. So, it becomes a situation where people have to put in raw cash instead of that asset to unlock the cash.”
He added that while such developments are long term in nature and require stable capital to activate, facilities like pension and trust funds that have very long maturity are not available within the Nigerian economy.
“So, you can’t go to the bank to say borrow me money to build something of that magnitude with the kind of interest rate (in Nigeria). Because if you are doing it at 20 per cent interest rate it means in five years that money has doubled. You have to look for a way of driving that development with some significant level of offtake. You have to make sure that a significant level of development is taking place before you even start digging the ground,” the developer said.
He explained that because there is limited number of expertise in terms of construction of such building/development, most companies would have to bring foreign contractors; with the implication of overhead of such projects skyrocketing.
He added that other kinds of incentives that could have been used to drive such developments capable of attracting foreign direct investment are not available in Nigeria.
He said, “For instance, Dubai has a record of developing highend mixed used developments by giving tax holidays to, not just the developer but those that will occupy the building and other forms of incentives like pioneer status. These incentives are lacking in Nigeria.”