A civil society organisation, Elites Network for Sustainable Development (ENetSuD), has put the market value of Kwara Hotel at N5.4 billion as at 2022.
The group’s monetary estimate of the facility is coming on the heels of the award of its reconstruction for N17.8 billion by the Kwara State government.
The project has since generated controversy regarding the amount and the company engaged to handle it by the government.
According to ENetSuD in a report signed by its director, Investigation and Public Petition (Kwara Central), Gambari Volvo, “the market value and worth of the hotel between 2017 and 2022 was N3.9 billion and N5.4 billion respectively.”
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The civil group based its submission on the valuation done on the edifice by Jide Taiwo & Co, an estate surveyors and valuers firm, engaged by Harmony Holdings Ltd (the investment company of the Kwara State Government) to carry out the valuation of interest for the purpose of determining the market value.
“On the 23rd of October 2017, Jide Taiwo & Co inspected the hotel for the purpose of carrying out the valuation as instructed.
“In the 89-page letter and valuation report with file number VL/ILR/17/75/DA/AO/IO that was submitted by Jide Taiwo & Co to Harmony Holdings Ltd on 3rd November 2017, a copy of which is now available with ENetSuD, “The market value of Kwara Hotel as of 23rd October 2017 is N3.9 billion.
“In another 61-page letter and valuation report with file number VL/ILR/22/44/RT/NI/AU/AO prepared by Jide Taiwo & Co on 14th July 2022, after a valuation visit on 5th July 2022, a copy of which is also now available with ENetSuD, “The market value of Kwara Hotel as of 5th July 2022 is N5.4 billion,” it said.
Quoting the report further, ENetSuD said, “This market value was based on cost approach method of valuation, which provides an indication of value using the economic principle that a buyer will pay no more for an asset than what it will cost him/her to own an equivalent asset of equal utility, whether by purchase or by construction.
“Thus the total construction cost of a new one is achieved through the application of a current construction rate to the gross floor area including other associated costs which is then depreciated to reflect present physical condition, functional and economic obsolescence on the property before adding the value of the bare site as at the date of valuation.”
ENetSuD said it made the Jide Taiwo & Co valuation public “to enlighten Kwarans on the worth and market value of Kwara Hotel between years 2017 and 2022, so as to determine whether the proposed investment of N17.8 billion to remodel and rebuild it is in the public interest and of economic benefit to citizens.”
Meanwhile, Crystal Group of Companies initially engaged to handle the contract has asked the Kwara State government to halt the decision to award the renovation of the hotel to Craneburg Construction Company Limited.
The group, in a letter dated December 28, 2023, claimed the government’s action contradicts the State Executive Council’s earlier approval for the hotel’s concession.
It further alleged that the award of the contract to Craneburg, while it was still in business with the government, violated a previous agreement to the grant, fix and operate concession granted to the Crystal Group on the facility.
The group however issued a 7-day ultimatum to the government on the matter while threatening to seek redress.
Daily Trust reports that the state government, through the commissioner of Business and Innovation, Hon Damilola Yusuf, recently announced the award of the contract to Craneburg, which aims to transform it into a five-star hospitality facility at N17.8 billion, with a projected duration of 24 months.
When contacted on Thursday, the GMD/CFO Harmony Holdings Limited, Mrs Mojirola Afolayan, said the concessioning was not carried out by Harmony.
The Chief Press Secretary to the Governor, Rafiu Ajakaye, did not respond to a message sent to him seeking reactions to the two issues, while calls to his line were also not answered.
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