Investors halt N5b Enugu Hotel Presidential renovation contract
A rash of legal claims may be threatening plans by the Enugu State Government to rebuild the popular Hotel Presidential, three years after a joint venture agreement was signed between the authorities and private investors.
The government had granted concession of the hotel in the Coal City to E-Hospitality Services Limited (EHSL) for its renovation and management. But the firm’s plans of becoming a new player before the end of second quarter in 2017 under a special purpose vehicle – Prime View Hotels Limited is being thwarted by a lawsuit filed by a party which allegedly had a previous interest in Hotel Presidential.
Under the agreement, 80 per cent of the equity stake in Prime View was allotted to E-Hospitality Services while 20 per cent was allotted to Hotel Presidential Limited. Primeview was to fund the renovation and thereafter manage the Hotel for 35 years. The title of the property has been duly vested in Prime View Hotels Limited for the duration of the concession period.
The said party is suing Enugu State Government, among others, for alleged wrongful termination of a lease agreement which the State Government purportedly granted it in Hotel Presidential.
In fact, the current concessionaire, Prime View has been joined as a defendant in the suit. Senior officials of Prime View told The Guardian that the company has stopped further work on the site due to the litigation. “Naturally with the advent of the lawsuit it will not be prudent for us to incur any further significant expense. Also our ability to raise funds will be negatively impacted as well,” according to Chuma Anosike.
He said: “Prime view is poised to embark on the next phase of its work plan and currently engaging with the Enugu State Government to resolve a number of unforeseen issues which have arisen. Our lawyers are currently handling the matter. Discussions are on-going with the State Government and other relevant stakeholders with a view to resolving the issues thrown up by the lawsuit.
“We have also learnt that some internal process issues have been raised regarding our project and discussions to resolve them are also ongoing. We have received firm assurances from the Enugu State Government that these issues would be favourably resolved and pose no threat to the sanctity of our transaction.
“The company has expended substantial resources on the project thus far and we remain fully committed to delivering a world-class Hotel facility in Enugu and look forward to working with the State Government as a partner in achieving this objective.”
He disclosed that the recent devaluation of the naira has made the project cost to rise with about 25per cent to over N5 billion. It was initially estimated to cost N4 billion.
Specifically, Prime View Hotels Limited has since taken possession of the facility and concluded preliminary surveys and assessments including a structural integrity test carried out by Sanni Ojo and Partners, a leading firm of structural engineers.
The results of the tests have been positive. In line with the forgoing, EHSL has assembled a team of world-class design and engineering consultants and produced a redevelopment concept. A contractor has also been mobilised for the stripping of the Hotel in preparation for the redevelopment works.
Other consultants include Project managers: Courtney Michael Partnership Nigeria Limited; Architects: Intra-Bethel Designs; Mechanical and electrical consultants: Hydrock Engineering U.K.; Quantity surveyors: BQC Consultants; Financial advisers: Frontier Capital Limited and Development advisers: Xterra Capital Advisors Limited.
The proposed redevelopment concept involves reconfiguring and modernising the existing hotel facilities such as restaurants, conferencing facility, outdoor swimming pool, four tennis courts and increasing the stock of rooms from 100 to 150 rooms. In addition a family leisure centre will be incorporated and the number of restaurants and other elements increased in line with the requirements of the preferred hotel manager.
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