by crossriverwatch admin
In Nigeria, we are very familiar with the cliché “white elephant” and use it to refer to grandiose government projects which are oftentimes a drainpipe of scarce resources that serve no purpose whatsoever to the welfare of the people.
Generally, our interpretation of this cliché is same as its universal literal meaning; as a label for a rare item that is no longer useful to its owner.
However, many Nigerians are oblivious that real white elephants ever existed.
The tradition of white elephants originally derives from a story about the birth of Buddha in Asia. As the story goes, Buddha’s mother dreamed of a white elephant presenting her with a lotus flower (a symbol of wisdom and purity), on the eve of her giving birth.
In ancient Thailand culture, white elephants were used as a symbol of power by royalties, and one white elephant used to be featured on the flag of Siam (1855-1917). So in fact, possession of a white elephant was a sign of great virtue and wealth.
Kings of Thailand often presented white elephants (colossal gift) as a way to impress rivals while simultaneously imposing financial and physical burdens on the gift-receiver.
White elephants were so sacred, that they could not be put to work, and as with all elephants, they were very expensive to care for. Hence, English language interprets a “white elephant” as somewhat of a paradox – being a valuable item but not worth its maintenance costs. Even till today, his majesty the King of Thailand still keeps a few white elephants.
This brings me to the crux of my treatise, an event that was widely reported in the news recently. Like other tabloids, Nigeria Business News of October 27, 2013 had a caption “Governor Liyel Imoke of Cross River State Endorses Privatization of Tinapa”.
Surprisingly, to the uninformed, Asset Management Company of Nigeria (AMCON) nationalizing Tinapa is being confused for privatization.
AMCON’s MD/CEO Chike Obi, noted that Tinapa’s asset and debt will first be taken over, made profitable and later privatized. In his words, “The strategy is to find an operator for Tinapa immediately. We will advertise for an operator very soon, inject capital into the facility and allow the operator to run it for some years”.
He continues, “After Tinapa has been made profitable, we will privatize it just like we are doing to the three bridged banks we took over. So it is the same strategy we used for the banks that we are using for Tinapa.”
Nevertheless, come to think of it, if the state government could turnaround the fortunes of Tinapa with a private operator, they would have since April 2007 done so with Broll Property Group and Sun Group all of South Africa who were on ground as the facility managers.
Moreover, AMCON shouldn’t be quick to get high on self-delusion, as banks profit making model of borrowing government money at not more than 15% interest rate then turnaround to loan it at 25% prime lending rate and with their round tripping in FOREX, all the cat-in-the-bag tricks which Tinapa cannot afford. Sincerely, I hope to see if the resort will ever be sustainable.
To be candid, diehard skeptics always ask; was Tinapa ever designed to be successful?
As some will say the resort looks like a contraption by its promoters to simply CLEAN OUT.
But how else can this skepticism be faulted when its economic supporting structure is a façade.
Does all the talk about its poor planning and feasibility studies hold water, when the KPMG and Vetiva advisers of this world didn’t hold back their ‘reject decision’ at the initiation stage but all smiled to the bank to get their consultancy fees without looking at the huge burden they were going to put the state as the 3rd most indebted behind Lagos and Bayelsa.
In all, when its promoters go to Dubai don’t they see the Abu Dhabi citizens almost outnumbering the visitors in those malls?
Or could it be they simply refused to see beyond their nose?
The constant lamentation of Calabar port dredging, the pie in the sky new airport and the pipe dream monorail finally comes to naught.
Furthermore, a deep analysis of the 55 billion Naira project’s opportunity cost to the people and government of Cross River is even more if one factors in the 100 million Naira monthly maintenance cost and its earlier media propaganda that was splashed on satellite TV – true to the nature of a white elephant.
One wonders what AMCON hopes to achieve with the agreement to buy back Tinapa’s debts and further provide the sum of 26 billion Naira for the revitalization and resuscitation of the Resort.
AMCON should tell us if this 26 billion will provide the supporting economic structures or be used to tutor the big cats at Nigeria Customs, that a Free Trade Zone is suppose to be a country inside a country where you don’t make revenue from the importer/sellers but from the buyers going on to show them how to.
Tinapa, Africa’s Dubai in Nigeria recorded many firsts. First prime business/leisure resort, first zero coupon bond issue in Nigeria, Nigeria’s biggest public-private partnership projects ever with 13 banks.
At a time the resorts promoters said renowned global supermarket chains, have indicated interest in taking its shopping space. Later on, was the actual confirmation that international labels like Shoprite, Wal-mart, Flamingo and Aspamda have all taken spaces or occupying the emporiums, which meant 10,000 m2 of shop space each at the cost of $75 to $200 per square meter (m2).
So because it costs between $5 and $6 million to rent an emporium, to assist average local retailer especially Cross Riverians the state government claimed to have secured a $3m grant facility to which the state government would add the matching fund of another $3 million to have a $6 million portfolio available for the serious local business persons who want to participate in Tinapa.
Back then this was cheerful news, till today no one has stepped forward to tell us how these big local and foreign shopping outlets missed their Tinapa address or was it a hocus pocus?
Explaining its business model, again there was this talk that the 13 billion Naira directly financed by the state government was not on the company’s balance sheet.
The promoters said the money is like a quasi-investment, like a quasi equity as they call it – a soft loan from the government to be paid off over a period of 40 years, after which the state government will finally exit the Tinapa project.
Certainly, that wasn’t all as the Nigerian Stock Exchange was another body that saw the potential of Tinapa as an opportunity to boost market capitalisation and afford investors an opportunity to diversify their portfolio and reap bountiful harvest slipped.
It was no surprise to observers, when the promoters were quickly offered an opportunity to list the resort on the Exchange, without allowing it go through the rigorous listing requirements according to reports then.
But don’t weep for Tinapa yet until you hear from its former CEO Sam Anani, “Our plan is to take Tinapa through an IPO and take it to the market early 2008. The justification is that we want Tinapa to trade for almost a year so that people can see revenue streams in order to make the IPO a massive success”.
But remember in 2009, when the global financial crash hit the markets, our economic managers had boasted ‘no shaking’, so this couldn’t have deterred Tinapa’s fortunes.
To buttress this, by December 2009 Hi Media owners of HiTV even went on to seal a deal with Tinapa Studios. Hi Media’s owner Mr. Subair even boasted, “Tinapa Studios even makes us ‘Hi er”. Since the business case is faulty, as we already know all these came to naught and the rest is history.
Though Tinapa is the biggest white elephant gift a state government has given its people in the history of Nigeria, one wonders the likelihood of it not reoccurring in the near future with the type of Houses of Assembly we have that are ever ready to look the other way and do the bidding of their majesty – his excellency.
Tinapa might have achieved the objective of being a beautiful brick and mortar spectacle from the hitherto lush rubber plantation of 250 hectares of rubber trees and sloppy terrain in 2004 but a huge question mark surrounds its sustainability.
True lovers of Cross River can only imagine what 55 billion Naira would have yielded even if invested in risk free government assets. Time will tell if AMCON can transform our elephant to a horse.
Enobong Udoh writes from Calabar.
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