PUBLIC CONTRACTORS

Nigeria 2018 | CONSTRUCTION & REAL ESTATE | B2B

Nigeria's public contractors discuss their current works as well as the challenges of operating in tandem with the public sector.

Fadi A. Ghazale
FADI A. GHAZALE
Managing Director
AG Vision Construction

What are the most important and recent projects for your company in Nigeria?

FADI A. GHAZALE We are working in several states and with various clients. Recently, the Ministry of Power, Works, and Housing awarded us a project to construct a 185km road in Adamawa State. This is one of our largest ongoing projects and is close to our heart. We have done a great deal of work in Adamawa, which is challenging because that is where the Boko Haram insurgency has been based. A decade ago, the company actually started there; however, the insurgents pushed us out of our projects. Now, we are back in the region and have a moral commitment to deliver for the people of Adamawa, who have suffered because of this war. We are proud of this venture and will do our best as long as the financing is available from the government to deliver this mission on time.

MUTIU SUNMONU We will certainly show our board and shareholders our roadmap for our involvement in oil and gas. Many investors will welcome that, though for now, we will stay within the country in terms of oil and gas and will form a strategic alliance with a player in the oil and gas industry. We have already formed a strategic alliance with Petralon, a small company that is nimble, professional, and excellent providers for the platform. We will not try to play a leading share. We will start to seek opportunities on a small scale in order to build up expertise and our investment level. Our vision is to have a significant income stream from other industries outside of construction.

How do you see yourself engaging with both the public and private sectors going forward?

FG AG Vision Construction was incorporated in Nigeria based on the idea of developing the public sector; however, we are not only involved in constructing roads. We did several large projects for the World Bank in Calabar in Cross River State related to erosion control. Landslides are common, and people were losing their land and homes as a result. Our projects are thus about advancing the public good and protecting people's lives and livelihoods. We were incorporated based on serving the public sector: that was our main target. This is why we embarked on partnering with the World Bank and other clients with the purpose of serving civil society. In parallel, we have a steady engagement with the private sector, which constitutes a narrow margin of our income. Our board's agenda for 2018 is to engage more with the private sector.

What is the status of PPPs for large-scale infrastructure projects in Nigeria, and what potential do they have?

MS The problem with infrastructure projects is that the economics have to be carefully considered. An infrastructure project can give a return, but it takes a long while for a company to break even. Therefore, a different kind of entrepreneur is needed to get into it. Agencies such as sovereign wealth funds and pension funds that have long-term orientations are needed, rather than a businessman who wants to make his money in five to 10 years. Therefore, this is something that will develop slowly in the country. In addition, the framework for PPPs is not well developed yet. In the construction area, there is no area where we seek to do a PPP, as there are differences of views, especially between the government and the private sector. Hence, we need to sit down and make sure there is a template that works for both parties. Unfortunately, an institution where one party wants to drag another party along will not work for that kind of arrangement. PPP has potential; however, we must understand that we need to have a framework that works for all parties. There are models all over the world that we can take and adapt rather than trying to invent a new way for ourselves.