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Barely one year after Nigerians stopped him from turning the National Theatre into a
hotel, the Minister of Culture and Tourism,Edem Duke, secretly jetted off the country to the United Arab Emirates, UAE, where he
traded off the nation's cultural pride to Mulk Holding, a diversified UAE-based conglomerate with interests in retail sector and other businesses.
The secret deal which was successfully shielded
from the Nigerian media, in spite of a subsisting
concessioning arrangement with the Bureau of
Public Enterprises, BPE, was signed and sealed in
December , 2014 between a delegation led by
Duke, the General Manager of the National
Theatre, Kabiru Yar'Adua and representatives of
Mulk Holding, said to be ploughing the sum of
$40 million (about N7.5 billion) counterpart fund
into the project.
According to GulfAfrica Review , in its December
10, 2014 edition, Sharjah's Mulk Holdings, a
diversified UAE-based business conglomerate,
"has announced its entry into the retail sector in
West Africa through a $40m joint venture to
develop Nigeria's National Arts Theatre in Lagos
into a duty-free shopping centre in partnership
with the Suzanne Group.
"The interior of the National Theatre will be
redesigned and renovated into a modern duty-free
and retail shopping mall. The project will convert
approximately 30,000m2 of the existing space in
two 15,000m2 phases," said Kabir Yaradua, CEO
of the National theatre.
The report continues: "The National Theatre has
been the hub of cultural activities in Nigeria since
1976, and this will kick-start a master re-
development programme for this area."
The report quoted Ambassador of Nigeria to the
UAE, His Excellency Bashir Yuguda, as saying:
"The National Theatre has been the hub of cultural
activities in Nigeria since its establishment in
1976, and this development will compliment and
kick-start a master re-development programme
designed for this area."
The National Arts Theatre was originally built for
the Festival of Arts and Culture in 1977, and later
underwent a controversial privatisation after 2001
under President Olusegun Obasanjo.
Fresh plans further anticipate leasing the land
around the theatre in a 30-year concession.
Minister of Tourism, HE Edem Duke, noted: "As
part of the continuous drive to promote culture
and tourism, the federal government is making
necessary arrangements to transform the land into
a modern mixed-use commercial and business
hub of global standards."
Arif Hafiz, Managing Director of Suzanne Group,
praised the "milestone contract" Mulk Holdings as
"one of the major global business groups in the
UAE", while Shaji Ul Mulk, chairman, Mulk
Holdings, elaborating on the details of the project,
noted that is expected to be completed in 2016.
"Mulk Holdings is adopting aggressive strategies
to expand its core business, involving serious
investment into existing businesses and
diversification into sustainable industries," Ul Mulk
added.
According to a report by audit firm Ernst&Young,
Africa's retail and consumer sector received about
17% of all foreign direct investment that came into
the continent in 2013.
Mulk Holdings and its joint venture partners own
and manage a group of 20 companies with a
sector focus on construction and fit-out
manufacturing, as well as diversified business
interests in trading, commodities, real estate and
energy, spread across 48 countries.
Based in Dubai, the Suzanne Group caters to duty
free shopping outlets in international airports and
seaports, and is a registered supplier of services
to the offices of the United Nations.
Though the theatre had been a victim of public
sector incompetence, its final descent into the
ignoble hall of shame of failed public institutions
started in 2001 when the Obasanjo civilian
government served notice of its intent to privatize
the monument. Converting a public institution into
a successful private enterprise has never captured
the fancy of Nigerians. Many of such previous
attempts at privatization of public institutions have
failed and the case of the National Theatre was not
different. Between 2001 and now, the theatre has
remained a mere ball for government ping-
ponging. It is yet to be sold or concessioned,
worst still the federal government which is the
original owner of the facility is behaving as
though it is the least of its worries: unserious.
A staff of the theatre told our correspondent that
the employees are more confused than anybody.
"We don't know our fate. Today we hear they
want to privatize it and build a 5-star hotel here,
tomorrow we hear a different story. This is
confusing and it is affecting our morale and
commitment because nobody, not even our senior
staff can say categorically that this is the true
situation of things.
"We believe the management of the theatre is
doing this deliberately to give the impression that
the theatre cannot function effectively if left in the
hand of government. We believe it is a cheap way
to arm-twist government to sell the national
pride. But some of us have travelled far and wide
and we have seen equivalent institutions in other
countries being managed by the public sector and
they are efficient".
Political Economist investigation showed that the
theatre has become a victim of power play
orchestrated by the Tourism Minister, Edem Duke,
in concert with the General Manager of the
Theatre, Mallam Kabiru Yar'Adua both of whom,
stakeholders allege, are intent on disposing of the
national monument for peanuts. The Theatre, they
argue, was set up by a decree just like the
National Troupe and other parastatals of the
Ministry of Tourism and they see no reason why it
should be sold off on the whims of a minister and
a manager. They cited the case of the United
States where certain monuments are still held in
custody of government.
For instance, the United States government
enacted a law in 1846 to support and preserve the
Smithsonian Institution and its 19 museums
across the country. In UK, the Royal National
Theatre and Royal Shakespeare Company are
publicly funded theatre outlets and they are still
relevant till this day. The case of the National
Theatre cannot be an exception, they warned.
The National Theatre has been a victim of
government policy flip-flop. The BPE commenced
the concession transaction of the National Theatre
in 2001 following the conclusion of World Bank-
financed diagnostic study and Transaction
Advisory service in line with international best
practices. The first concession transaction in 2001
led to the pre-qualification of the following
prospective concessionaires:
1. Jadeas Trust Consortium, and
2. Lloyd Anderson Investment Limited.
In January 2003, the pre-qualified
concessionaires conducted data room and
physical due diligence. The transaction was
stalled, however, owing to the inability of the
Ministry of Culture and Tourism to provide
relevant documents such as Power of Attorney as
well as building and floor plans of the National
Theatre.
The BPE did another concession transaction of
National Theatre in 2006. Eight Consortia
responded when the Bureau advertised for
Expressions of Interest. This led to the financial
bid opening on May 17, 2007 where Infrastructica
Consortium emerged as the Preferred Bidder with
a bid price of ₦35, 560, 000,000 and Jadeas Trust
Limited as the Reserved Bidder with an offer of
₦28, 902,948,593.23.
Following the approval of the results of the
financial bid by the NCP, an offer letter was sent
to the Preferred Bidder on May 18, 2007 and a
timetable to complete the concession agreement
by May 28, 2007 was drawn. Unfortunately, the
Preferred Bidder, Infrastructica Consortium, failed
to meet the terms of the offer, leading to the
termination of the offer. The Reserved Bidder,
Jadeas Trust, was thereafter invited for
negotiation to pay for the enterprise.
However, the process to conclude the transaction
with Jadeas Trust was stalled.
The NCP at its first meeting on January 22, 2013
approved the resumption of the concession
transaction by the BPE with a view to bringing it
to conclusion. The BPE has consequently invited
the reserve bidder, Jadeas Trust Consortium with
the offer of N28,902,948,593.23 to present a
revised technical and financial proposal. The
N28.9 billion bid offer, which is not yet concluded
as it will form part of the renegotiation with
Jedeas Trust, comprises both Entry fee and yearly
lease fees to be paid over a 35-year period. This
is different from the investment capital to be
based on approved Post Concession Business
Development Plan from which the Concessionaire
is to recoup its investment and return the
enterprise to the Government after 35 years in the
event that the concession is not renewed.
The NCP, in line with its practice to carry along
ministries whose enterprises are being privatized/
concession, also approved that the BPE should
invite the Honourable Minister of Tourism &
Culture to participate in the NCP's technical sub-
committee that will evaluate the proposal of
Jadeas Trust.
Jadeas Trust Consortium has submitted a revised
Technical and Financial proposal to BPE. In
accordance with NCP's decision, the BPE has
written the Ministry and the Management of
National Theatre to send two nominees each to
join the evaluation committee that will assess
Jadeas Trust Consortium's Technical and
Financial proposal.
The BPE is awaiting the response of both the
Ministry and Management of National Theatre for
the evaluation of the Technical and Financial
proposal to begin in earnest. The result of the
evaluation team will be presented to, first the
Technical Committee of NCP for consideration
before the Technical Committee presents its
recommendations to the NCP for approval or
further directive.
At the Federal Executive Council's meeting (FEC)
held on Wednesday June 26, 2013 an Inter-
ministerial Cabinet Committee was set up to
consider the parallel concession transactions
being carried out by the BPE and the Ministry of
Tourism, Culture and National Orientation.
With the new development being spearheaded
secretly by the minister, it is not clear what has
become of the earlier concessioning arrangement
and the status of Jadeas Trust.
Author: Annabelle Macford Okwara
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