The puzzle over the non-functional Sunborn Yacht Hotel in Lagos became clearer on Tuesday when the Lagos State House of Assembly invited three commissioners to discuss the supposed landmark tourism project. The parties involved, who had been frugal with details of the purported public private partnership deal, were a bit more revealing before the House as they gave their accounts in a two-hour proceeding.
Those summoned were the Lagos State Commissioner for Tourism and Intergovernmental Relations, Tokunbo Afikuyomi, Multi-Purpose Infrastructural Development Company (MIDC), the company that facilitated the yacht deal, Diamond Capital, the financial adviser for the project, the Commissioner for Finance, Rotimi Oyekan, and the Commissioner for Economic Planning and Budget, Ben Akabueze.
All were present except Diamond Capital, who claimed through a letter it wrote to the House that the notice from the lawmakers was too short.
Is Lagos State involved?
The House wanted to know the level of involvement of the Lagos State government. The three commissioners maintained that the state government is not “financially involved” in the project.
“The Lagos State government did not expend any naira, euro, dollar or any other currency currently existing in the world today towards the acquisition of the vessel called Sunborn,” said Mr. Afikuyomi.
Both the commissioner for finance and economic planning and budget corroborated Mr. Afikuyomi’s claim, as the state government has done in previous press briefings.
Mr. Afikuyomi said the role of the state was to provide ancillary infrastructure like mooring and berthing facilities.
“The executive approval of the deal signed on January 17 specifically identified the role of each party,” he said.
Emmanuel Obire, the chief executive officer of MIDC, maintained that the state government has not spent any money on the project other than the airfare of state officials who went to inspect the vessel abroad, but argued that the government will eventually be involved by the time the vessel becomes functional.
Truth about acquisition
Mr. Obire, contrary to the widely publicised information that the MIDC initiated the deal, said it was the state government that introduced the project to him.
“We saw the project as a complementary business opportunity since we are the only company in Nigeria that owns a licence for international hotel,” he said.
Mr. Obire said his company expended over $1 million US dollars in what he called “due diligence” – a bidding procedure.
“Other private organisations presented higher bids for the yacht but Lagos was considered because of the involvement of the state government,” he said.
Mr. Obiri explained further that a consignee company, Loneseed Limited, was established to facilitate the purchase of the vessel.
By the time the vessel berthed in Lagos, Loneseed was supposed to be dissolved and a new special purpose vehicle (SPV), Lagos Yacht Limited, be formed as a joint venture between the state government and the MIDC.
According to Mr. Obire, he presented the letter of intent, signed by MIDC and Lagos State government, to Diamond Bank for a loan to finance the deal.
Diamond Bank, which management, according to Mr. Obire, had been looking for an opportunity to do business with the Lagos State government, grabbed the proposal and “introduced Diamond Capital as financial adviser that will package the project”.
However, after the vessel berthed, Diamond Capital claimed the ownership of the vessel saying “the finance was equity contribution and not a loan.”
“The project is a laudable one that can place Lagos on the world tourism map and we must not allow the greed of some people to affect it,” Mr. Obire said.
With this revelation, the members of the House became more interested in knowing the details of the contract. They requested that the ownership of Loneseed and the SPV be disclosed.
The Speaker, Adeyemi Ikuforiji, did not grant the request. “What if some of the Honourable members of this House are involved in the ownership,” he said.
But he asked all the parties to submit all the documents relating to the contract to the House.
The sitting was adjourned till Monday, October 26.
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