Babalakin at 61: A pathfinder’s paths

By Nairalovers Nigeria

 

There is no doubt that the Murtala Muhammed Airport Domestic Terminal 2 (MMA2) in Lagos is an exemplary result of public-private partnership (PPP). It was constructed 14 years ago under a Design-Build-Operate-Transfer (DBOT) agreement with the Federal Government, the first major DBOT project of such magnitude in Nigeria.

”There is no airport terminal in Nigeria that has the flow of MMA2 because it was well thought out and designed,” Resort International Limited (RIL) Chairman Dr Wale Babalakin (SAN) observed at the 2019 annual lecture of the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, where he spoke on “Infrastructure Development and Growth in Nigeria: Prospects and Challenges.”

Babalakin’s company, Bi-Courtney Aviation Services Limited (BASL), is the private partner in the partnership and operator of the terminal. It is noteworthy that the company, the reserved bidder, was asked to handle the project after the preferred bidder’s failure to perform.  He said the company achieved a high design standard because the terminal was designed by Nigerian and South African architects.  He deserves credit for his contribution to the country’s infrastructure development. He turned 61 on July 1.

“If we had been allowed to continue, phase two would have been completed 10 years ago and we would have had one of the best Airports in Africa,” he said in his lecture. It is unclear why there was discontinuity, but it is clear that the country would have benefitted from continuity.

The country’s underdevelopment is the result of poor infrastructure development. Babalakin noted in his lecture that infrastructure development “is about serious commitment and a lot of intellectual rigour.” Sadly, it seems these essentials are in short supply in the country’s corridors of power.

Babalakin’s MMA2 success possibly prompted the Federal Government to consider concession arrangements for other airports.  In 2016, the government announced  that it had concession plans for  all the 22 federal airports to enable them to function efficiently and profitably, beginning with the ones in Lagos, Abuja, Port Harcourt and Kano. At the time, he had observed that his company’s “eye-opening effort” encouraged the authorities to pursue concession deals concerning the airports.  Importantly, Minister of Aviation Sirika Hadi in June said concession arrangements for the four airports would be completed by August. It remains to be seen if the standard set by Babalakin would be achieved.

Considering his notable MMA2 achievement, it may well be that the country lost a big infrastructure development opportunity when the Federal Government controversially terminated the 2009 concession agreement with another of his companies, Bi-Courtney Highway Services Limited, for the reconstruction and modernisation of Nigeria’s busiest and most important highway, the Lagos-Ibadan Expressway, under a DBOT agreement. Babalakin said the government “terminated the concession for lack of performance without disclosing to the public that they had held us down for 22 months.”

His company was the preferred bidder under the Umaru Yar’Adua administration, but the Goodluck Jonathan administration terminated the agreement in 2012 after Yar’Adua’s death. Ironically, Jonathan was vice president at the time the agreement was signed.  The public-private partnership was jettisoned and the government awarded the contract for the road project to Julius Berger Plc. and RCC Nigeria Limited.

”It is just a repeat resurfacing of the 1977 road,” Babalakin said in his lecture two years ago.  ”The architecture of that place has changed phenomenally since 1977 and our design accommodated all the changes… Our total cost was N112b. Now, over N350b has been spent on 40% of what we planned to build and they are still at 40%.” It is noteworthy that the road repair is ongoing.  Chairman of the House of Representatives committee on works Abubakar Kabir, in June, during an inspection of roads in Lagos and other parts of the Southwest, said the Federal Government was working towards completing the road rehabilitation project before May 2022.

There is a significant difference between resurfacing the road and modernising it. If his company’s design had been allowed to materialise, the country would have benefitted from the difference.  He explained in an interview last year: “The project on that road included seven overhead bridges… I’m not even sure there is one overhead bridge on the one being built now. Also, our project had proper lay-bys; you didn’t have to buy petrol on the road. You had to go off the road for about one minute where you would find a restaurant, small hotel and all the facilities you would require. We had three of such on each side of the road. We also had a truck bay that could accommodate 12,000 trucks and was expandable because we counted the number of trucks on the road then and they were about 4,000. Now, we are told that they are about 6,000.”

Another project involving Babalakin’s company that shows how the government’s actions ironically contribute to the country’s underdevelopment is the planned redevelopment of the old Federal Secretariat, Ikoyi, Lagos.

Babalakin’s RIL  had paid N7 billion for the property in 2005 after a successful bid, and in October 2006 signed a Development Lease Agreement (DLA) for 99 years with the Federal Government to redevelop the disused Secretariat complex into 480 luxury apartments. But the property lies in ruins 16 years after the agreement because of obstacles created by the Lagos State government which said the Federal Government should have sold the complex to it.

The company went to arbitration against the Federal Government and won. Under the agreement the Federal Government was supposed to be responsible for obtaining a no-objection approval from the Lagos State government, if necessary.  The company was awarded N50 billion as damages in a judgement delivered by the tribunal in December 2015.  The cost awarded has not been paid by the Federal Government, and the Lagos State government has not changed its obstructive position.

Whether it’s an aviation project, a road project or a housing project, Babalakin has encountered government-driven obstacles to his infrastructure development efforts. But the seasoned lawyer-cum-businessman remains a consistent advocate of the public-private partnership approach to development.  Based on his personal experience, he listed the enemies of public-private partnership in Nigeria  at the 2016 Nigerian Economic Summit in Abuja, including the attitude of the government, lack of respect for sanctity of contracts and the rule of law, lack of investor security, corruption and malice.

Notably, Vice President Yemi Osinbajo, in March, at the opening ceremony of a two-day retreat of the National Council on Privatisation (NCP) in Abuja, observed that Nigeria needed public-private partnership arrangements to solve its massive infrastructure deficit because the country required at least $2.3 trillion over the next 30 years to deal with the infrastructure gap which the government alone could not provide.

So Babalakin, a vocal and active champion of public-private partnership, remains relevant to the country’s infrastructure development goals. The pathfinder is still needed to find paths.

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