N18bn Debts: AMCON Set To Privatise Tinapa

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tinapa_logo_0Apparently bordered by the debt burden of N18 billion owed by the Tinapa Business Resort Limited (TBRL), the State Governor, Liyel Imoke of Cross River State recently initiated moves to privatise the outfit popularly referred to as “Africa’s Premier Resort.”

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Imoke stated the desire of government to privatise Tinapa through a letter he sent to the State House of Assembly for deliberation on the proposed privatisation which has already gotten the approval of the State Executive Council (SEC).

In the letter dated September 30, 2013 addressed to the Speaker of the House, Imoke said “the Asset Management Corporation of Nigeria (AMCON) is to take over the management of Tinapa Business Resort following a settlement agreement with the Cross River State government for the transfer of its controlling interest in Tinapa. By the agreement, AMCON is to buy back Tinapa’s debts totalling N18, 509.744.797.05 and also provide the sum of N26billion for the revitalization and resuscitation of the Resort to reposition it as a private sector driven enterprise.

“It could be recalled that the Tinapa Business and Leisure Resort was commissioned in 2007 by President Olusegun Obasanjo with the aim of boosting the socio economic development of Cross River State. But regrettably, several challenges have hampered the achievement of this objective. Over the years, Cross River State Government has explored several avenues to ensure the realisation of the objective for which Tinapa was established.

“Following the inability of the Resort to meet desired expectations of both Cross River State Government and core investors especially Banks and some local government council in the State, it has been realised that the most viable options to salvage Tinapa Business and Leisure Resort is to seek private sector equity investment and divestment of significant interest of the State in the project.

“The matter which has been presented to the Cross River State Executive Council and given a thorough consideration approved the transfer, premised on the fact that a private sector holding in Tinapa would provide the needed platform for the revitalisation of the project and the state will be relieved of the huge debt burden, to enable it channel available funds to other critical areas of development.”

The letter and the move made by Imoke captures the realty of Tinapa for most of the period since it was commissioned in April, 2007 by President Olusegun obasanjo , just over a month before the exit from office of the former Governor, Donald Duke, whose regime started and completed the construction of Tinapa.

Perhaps the challenges were not envisaged at the point of conception and construction of the business and tourism resort, but no sooner than the outfit was commissioned that the problems for its effective take-off and functionality became obvious.

Barely one month after the commissioning of Tinapa, Duke, at the opening session of a two-day retreat on Tinapa tagged: “Making Tinapa Work: Setting the Tone”, which held at the Obudu Ranch Resort, reeled out the immediate challenges faced by Tinapa.

Duke said the challenges include attracting more tenants, facility maintenance as well as post construction defects that may be noticed before the contractors would have vacated the site.

Duke said it behoves on all stakeholders to ensure that Tinapa becomes self financing through rents and other sources of income generation.

He said if these are achieved, cynics who view Tinapa as a White Elephant project will be proved wrong.

Also speaking at the event, then Managing Director and Chief Executive Officer of Tinapa, Mr. Sam Anani, said some issues that were not thought of at the stage of conceiving Tinapa needed to be understood.

Anani said what were identified during the retreat constitute challenges and that solutions were sought to overcome the challenges.

Duke and Anani were merely scratching the surface of the problems that were the inability of Tinapa to function maximally.

What could be termed the real problems of Tinapa came to the fore shortly after Duke left office and handed over to his successor Imoke.

The problem according to the current Managing Director of Tinapa, Architect Bassey Ndem, had to do with an approved and gazetted regulatory framework for business operation of the resort.

Ndem said that the regulatory framework had to do more with what would accrue to the Federal Government as revenue from Customs Duty and other forms of taxes.

“Tinapa would represent an opportunity for the customs to make more money they ever had. The difference between Tinapa and other points of entry is that we will electronically capture every single transaction. So the customs will know exactly how much each shop has spent and what duty would accrue to them. This will go straight to the Federal Government. So, we are sure Tinapa will represent for them the model for intervention.

“However, there is a need for official documentation to guide customs,” Ndem has said.

By the last quarter of 2008, the dream of doing business in Tinapa without hitches to its tenants, customers and tourists had been removed through the approval of a regulatory policy for business operations there.

The approval came after exhaustive deliberation by Minister of Finance, Minister of Commence, Federal Attorney General and Minister of Justice and the Comptroller General of Customs, all members of Inter-Ministerial Committee on Operation of Tinapa established by the then Nigerian President, Umaru Musa Yar’Adua.

But, five years down the line, after the approval of the regulatory framework, Tinapa continued to witness slow progress, except for the Tinapa Lakeside Hotel that showed flashes of hope when , for some time in 2013, it recorded a steady turnover of over N90 million monthly.

But, the huge debt burden of the state government of which Tinapa was responsible for N18 billion must have informed the decision of the Imoke-led administration to move towards privatising the resort.

The general feeling expressed by people is that of commendation of the Governor for taking a bold step towards privatising Tinapa because they believe it would be in the short and long term interest of the state for the private sector to inherit the financial burden of the state connected to Tinapa.

Executive Secretery of the National Planing Commission (NPC), Ntufam Fidelis Ugbo, who hails from the state, in a recent interview, captures the strong feelings of those in support of the policy thus:

“The entry of AMCON to Tinapa, to me, is a welcomed development for some important reasons. First, Tinapa was built not just for the interest of Cross River State alone but for the Federal Government. Most of the companies that operate in Tinapa are limited liability companies and by our national laws, limited liability companies pay tax not to the state governments but to the Federal Government. The Federal Government did not invest in building Tinapa but majority of the proceeds coming from Tinapa go to the Federal Government. But the state keeps putting its resources in “Tinapa on a monthly basis; the state puts in over N100 million a month to ensure that Tinapa is running. Because the enterprise is a big one, the business concept was maybe not properly thought through”
[Daily Independent]

Babatunde Akinsola
Babatunde Akinsolahttps://naija247news.com
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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