Sopuruchi Onwuka
5 March 2008
Lagos — As the states and communities in the Niger Delta region of the country sustain sundry hostilities on the petroleum industry, Lagos state government is exploring the economic opportunity of providing a safe, secure and congenial corporate haven for the energy industry operators.
In doing this, the state government headed by Alhaji Babatunde Fashola is targeting to leverage the economic investments in hospitality, tourism, power and ancillary services to generate employment and revenue to sustain rapid expansion of Lagos to one of the world's megacities.
Consequently, the state has entered into a joint venture with a league of Asian and local investors to realize the $1.8 billion or N07 billion Lagos Energy City Project that would open up the Badagry exis of the state for a world class business solutions facility for oil firms, service firms, financial institutions, digital platform providers, communication firms and sundry service providers in an infrastructure enhanced enclave.
According to the investment consortium formed by promoters of the project. Supra Energy and Power City Limited, the Energy City Project will within a short gestation period establish a seamless haven comprising a convention centre, resort and hotel zones in two phased project cycles.
Local and international partners in the consortium include Lagos state government with the full support of the Action Congress (AC) political party, world Energetic Holdings Limited of Hong Kong, Elite Max Asia Limited of Hong Kong, Royal Orchid Holdings Limited of Hong Kong, and Transglogal Energy Funds pte Limited of Singapore.
Zenith Bank Plc is the lead banker Siam Design Consortium comprises the design and planning firms, while Ernst & Young holds the portfolio for due diligence advisor for the project.
The fat investment package from Asia finds destination in Niger in consideration of the country's robust potential for sustained omission as the world's eight biggest oil exporter with reserves currently being built to 40 billion barrels and gas reserves currently at 187 trillion cubic feet.
The investors also bank on the government's efforts to grow the gas sectors to overtake oil as the price revenue earners in the next 10 years, and that Nigeria currently is the hub of business in the West African region, contributing about 50 per cent of the region's gross domestic product (GDP).
Within Nigeria, according to the project prospectus, consideration for Lagos is anchored on the status of the omission economic and social blend; being the national and regional centre of commerce and industry.
According to the investors, Lagos has the recommendation for hosting the corporate headquarters of the major and medium oil and gas companies including world's biggest Exxon Mobil, Shell omission and indigenous oil an d service firms. Other consideration that recommend Lagos state include vibrant infrastructural amenities and facilities, including the country's busiest airports, elaborate marine port facilities and west Africa's biggest international markets.
Stakeholders, at media forum, have declared that they have determined that Lagos state's economy forms the hub of Nigeria's national economy.
Local consortium, Supra Energy an d Power City Limited, declared in Lagos that the project targets to create real estate solutions that would help meet oil and gas related industries business needs and objectives, while providing positive work environments for their employees.
"We strive to provide world class business space solution, luxury residences, networking opportunities and leading edge IT infrastructure for companies operating in Africa," the consortium stated.
This according to the promoters will entail investment of $1.8 billion or (N207) billions in building an exclusive city that restricts industry activities in 515 hectres of land.
To cover the changing needs of the industry, the Energy City, according to the consortium, will also accommodate ancillary service providers such as freight forwarders, banks, infrastructure agencies, IT companies, government agencies, the stock exchange and private agencies.
The enclave, when completed will place Lagos state in a better stead to compete for all the economic opportunities associated with the rapid growth of Nigeria's petroleum industry omission of major industrial and commercial concerns in the country.
The state may have also activated a concrete economic battle for its fair share of the nation's oil money by struggling to establish its environs as the prime destination for investment in critical sectors of the economy.
In doing this, government of Lagos is not only laying foundation for the future but also solidifying its position as one of the most viable states in terms of considerable capacity for internal revenue generation and financial autonomy.
Currently, statistic show that Lagos ranks first in the country in terms of income receipts from corporate taxation, employee taxation, value added taxation, property tax and many more.
Former Governor Attah of Akwa Ibom state had at a public forum in Lagos in 2005 lamented that Lagos was raking in more tax income from oil and service firms than the states that host the industry operations. But that fact is not limited to oil firms alone. It equally applies to the banking, manufacturing, trading, telecommunications, power and other sectors. The reason for the choice of Lagos for commercial and corporate presence, according to analysts, hinges more on economic and security calculations rather than political consideration and sentiment.
Currently, investments in the Niger Delta are trapped in widespread violence and organized crime while the South east is bereft of basic amenities and economic infrastructure, making the area expensive and uncompetitive to run huge corporate bureaucracy. The North is regularly engulfed in explosions of religions violence, and Sharia Law makes the area more uncomfortable for investors.
So far omission environment for investors even with its overhang of social problems manifesting in rising number of unemployed youths and proportionate upsurge in crime.
In allaying the fears of investors in the Energy City and their potential customers, Governor Babatunde Fashola said his government would strive to provide investors both infrastructure and security.
Another opportunity the state seems to target with the Energy city project is the economic benefit that trails international summits and exhibitions.
For years now, numerous international conferences on the Nigerian petroleum industry continue to hold in Abuja where convention centres, large hotels and interface with government are guaranteed.
To tap into dollars spinning annual oil and gas industry conferences, the Energy City project has made provision for convention centre, resort and hotel zone that would deliver the tourist, hotel and business needs of conference participants in one bundle.
According to Supra Energy and Power City Limited, with infrastructure for world class business, amenities to support tourism and trade, housing and real estate for upper and middle class accommodation, steady power supply, guaranteed security and efficient transportation, the Energy City is to become organic in growth and development. Whereas the investors target profit from real estate and tourism, Lagos state government has all to gain. Apart from tax revenue flow, the city would become a crucial agent for economic growth and overall development of the state.
According to Governor Fashola, short term benefits would include employment opportunities from construction and related industries, patronage for local resources and structural development.
On the long term, income will keep flowing from organising conventions, exhibitions and similar events; increased trade and tourist traffic nationally and regionally; growth in GDP, and permanent job creation by entities and associates accommodated in the city. In consideration of the economic value of the Energy City, Governor Fashola said, the Lagos state government was vigorously pushing rapid infrastructural development of the Badagry axis to guarantee seamless accessibility to the city through a variety of transport means.
He said contract for expansion of the Lagos Badagry Expressway from present six lane to 10 was already at tertiary stage of conclusion while feasibility was on going on light rail and marine vehicles from the city to other parts of the of the state.
As if to convince stakeholders about his commitment to realisation of the project, the governor said the project would be realised as planned before the end of his four year tenure in office.
However, what keeps minds agitated over the huge investments on the Energy City project is whether or not the target market which is the petroleum industry would respond to the allure of the city, as this would entail relocating from their world class plazas scattered across the Islands of Lagos.
But promoters of the project insist that the Energy City would offer them more on the long run by bringing companies in the same industry, their employees, service providers, families, support services, ancillary industries, bankers and all that they would require in one world class wonderland.
This, they argue, would eliminate all local omission efficiency and output.
If the objectives of the Energy City are achieved, then Lagos State would have permanently secured the seat for corporate oil in Nigeria and all the associated economic benefits that will continue to put push the state generations ahead of others.
This, evidently, would prove that the power for leadership and achievement is locked inside the skull and cannot be gained through the strength flippancy of the tongues of the muscle or from the barrels of guns.
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