$4bn Abuja City project roars back from recession

  …project could turn Abuja to Dubai, New York by 2023  The Abuja City Centre project may soon progress as expected with active construction work set to start at the project site two years after the economic downturn in Nigeria affected the project.  Daily Trust visited the site of the proposed high end development and […]

  …project could turn Abuja to Dubai, New York by 2023 

The Abuja City Centre project may soon progress as expected with active construction work set to start at the project site two years after the economic downturn in Nigeria affected the project. 

Daily Trust visited the site of the proposed high end development and found that while the fortunes of the project has been enhanced with the coming of new partners and the conclusion of fresh architectural, civil, structural electrical, mechanical as well as other infrastructural designs, preliminary clearing and excavation work has started at the site. 

The Abuja City Centre project, Daily Trust findings from sources in the Abuja Infrastructural Company (AIIC), is a private sector collaboration between the FCT Administration and a consortium for the development of a befitting City Centre in the Federal Capital City. 

The City Centre, which is stipulated under the Abuja Master Plan is to comprise multiple 5-star hotels, residential apartments, office spaces, structured parking lots as well as a National Mall. 

For short, the project was designed to be a mix-used development with twenty-eight (28) high rise towers encompassing residences, hotels, high-end business school hub, shopping arcades, malls as well as hospitals and medical suites. The project draws inspiration from a number of high end city centre developments in the world like the Orchard Street in Singapore, Central Parks in New York, London and Dubai. 

 Plots 1532 and 1522 in the Central Area (the vast empty land around Secretariat, Ministry of Foreign Affair & Eagles Square) measuring approximately 7.58, and 8.80 hectares for the Tower buildings and 5.5 hectares for the National Park/ mall, was identified and dedicated for the project. 

The Agreement with the FCT Administration and the new consortium followed the collapse of an Agreement with Messrs. Balkan Centre Development Inc., a US-based company and previous development lease holders, due to its alleged failure to fulfill conditions precedent in the agreement. 

The new consortium was approved to step in and thereafter executed a Development Lease Agreement with the FCT Administration on 5th March 2014. 

According to records obtained from the AIIC, the major highlights of the agreement, included that the company would develop a befitting City Centre over a total land area of 21 hectares in the Central Business District by the provision of secondary infrastructure, a 5-star hotel, office spaces, residential buildings and structured parking lots as well as a National Mall for the FCTA. 

“The Company is to fully fund the National Mall (park) for the FCT Administration in the sum of $40 Million without any financial contribution to the FCTA. In addition, it is to issue 5% shares of the Special Purpose Company (SPC) to Abuja Investment Company Limited (AICL) on behalf of the FCT Administration,” the agreement showed. 

The initial project cost and value of Investment proposed by the developer was estimated at $2.7 billion however, the revised design and additional Towers and smart city infrastructure put the new value of investment at $4 billion. The project was expected to be completed within a period of between 60-120 months. 

After securing the necessary approvals and attaining various agreements between the parties, stakeholders and the conclusion of architectural and other designs of the City Centre, the project site was handed over to the project proponent in March 2015.  

How recession, army invasion stalled project  

But the project could not progress as fast as anticipated two years after due to some constraints. 

To achieve a complex project of this magnitude, project management/development experts told Daily Trust the consortium needed to bring in development partners, professional/technical consultants and international project managers. 

It was gathered that the developer did so and had reached advanced stage of its funding arrangement with its initial partner Eagle Hills LLC an Abu Dhabi-based private real estate investment and development company. 

But the real estate giant was said to have pulled out of the project for some reasons. 

When contacted on the level of progress of the project, the company handling the project City Centre Development Limited said they will soon issue a press release on the project .They explained that the two years of preliminary work that it did with their initial partner Eagle Hills came to a close when both parties were supposed to kick off (the project). 

A representative of City Centre Development Limited who pleaded anonymity because of legal Non- disclosure issues inherent in the agreement said two things happened; one was the downturn in the economy and the initial difficulty in managing the naira/dollar rate. 

He said their former partners Eagle Hills in the 3rd and 4th quarter of 2015 did not see any clear cut foreign exchange policy direction from managers of the economy. 

“They felt it will be difficult for them to go ahead to bring in dollar investment when they did not get answers on how to remit their dollars back to their base when they realize their investments.”

 “Eagle Hills was coming in to be the master developer because of their expertise. They have done Downtown Dubai, they are a part of the Emaar Group which owns Burj Khalifa the tallest building in the world, they own The Address Hotel and they have the Address hospitality group which has chains of hotels across the world. So, bringing in a hotel group is not a problem for them because they know them. Managing retail is not a problem because they manage the Dubai Mall. So, we did our work to the extent that we have our approvals and drawing while they came in with their expertise. The consortium took almost another one year redesigning only for the economyy to experience the massive recession and the subsequent uncertainty around Naira/ Dollar exchange rate. This was the major reason they decided to pull out.” he said. 

He explained that the second reason Eagle Hills quit was the project was the harassment received from some military personnel who took over the project site for a period of six weeks without notice and did not allow earth moving equipment that were deployed to the site to entre and work. That finally killed the iinterest of Eagle Hills on the project. 

New lease 

The official of City Centre Development Limited said that the disappointment Eagle Hills exit has been put behind as new partners have stepped in and that the project was still very much alive as a new Investment Holding Consortium are now on board bringing along with them their world class expertise and pedigree on projects such as the Abuja City Centre. 

He said the project is in four phases and actual construction on Phase 1 was about to commence. 

All the four Phases are anticipated to be ready by end of 2023.