FG, developer sign deal on Festac Phase 2
A major milestone in the nation’s housing and urban development sector was recorded last week when the Federal Government and Messrs New Festac Property Development Company Limited, signed an agreement for the concessioning of the reclamation and infrastructure development of Festac Phase Two in Lagos.
One of the buildings in Festac town The Minister of Lands, Housing and Urban Development, Mrs. Akon Eyakenyi signed on behalf of the Federal Government while the Vice Chairman of New Festac Property Development Company, Sir Isaac Chuks signed on behalf of the developers. Speaking at the brief ceremony in Abuja, Mrs. Eyakenyi explained that the realization of the concession will transform Festac Town into a modern city and yield great benefits both in the infrastructure and economic development of Lagos.
“The serviced plots to be realized through the concession shall be complemented with green areas, off street parking, power supply, petrol station, shopping malls, hospitals, hospitality centres and laid roads, water works, street lights, sewage disposal systems, incinerators and all necessary support infrastructure,” he said. Specifically, the Minister disclosed that the government will earn an estimated N25.765 billion per annum as premium for 30 years of the concession. The government also expects to rake in an additional N150 million annually as ground rent, with the parties agreeing to review the earning clause to reflect the market situation.
Beyond the financial benefits, the Minister explained that 50,000 housing units would be delivered and their construction would create thousands of job opportunities. Mrs Eyakenyi traced the origin of the project to the 1970s when the Federal Government made massive acquisition of land for the development of Festival Town to host the 1977 World Black and African Festival of Arts and Culture. Recalling that the completed estate was handed over to the Federal Housing Authority, FHA, to manage, the Minister regretted that efforts to reclaim and develop the outstanding 1126 hectares of land known as Festac Phase, had remained unsuccessful.
In 2006, FHA took advantage of the public-private partnership initiative and invited bids for the reclamation and infrastructural development of Festac phase Two to produce 7,000 serviced plots complete with standard infrastructure and essential services. The bid was won by Messrs New Festac Property Development Company which is a special purpose vehicle made up of four companies – Fung Tai Engineering Limited, PW Nig Limited, SCC Nigeria Limited and Energo Nigeria Limited.
In his brief remarks at the ceremony, the Vice chairman of the Company, Sir Isaac Chuks said the scope of the concession includes but not limited to land reclamation, sand filling, infrastructural development, marketing/sale of the over 7,000 plots of land to be created from the reclaimed land and facility management for the 30 year period of the concession before reversion to Federal Housing Authority FHA. “By the concession, the Concessionaire – Messrs New Festac Property Development Company Limited is expected to fully fund the implementation of the project and recoup its funds mainly through the sale and management of plots of the land over the concession period,” he said.. According to him, “since the award in April, 2013 New Festac Property Development Company Limited has been preoccupied with extensive preliminary project development activities including surveys, field studies, site investigation, environmental impact assessment, town planning, funding and third party appraisals and agreements.
- Price: December, 2013