NAHCON: FEC’s PPP approval, a morale booster, by Fatima Sanda Usara
The National Hajj Commission of Nigeria (NAHCON) is set to surpass its own record in infrastructural development and efficient service delivery to Nigerian pilgrims. Hopefully, this shot will translate to a higher contribution to the country’s economic health, contribute to boosting staff morale and offer the public more job openings.
It is indisputable the world over that investment in infrastructure is critical to the economic development of the public sector, especially for successful service delivery and poverty mitigation. It serves as a catalyst for job creation that would hopefully enhance the social welfare of the citizens.
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Consequently, NAHCON realizes the significance of infrastructural development particularly in its stride to accomplish financial autonomy. A pace which it had set since the 2019 Hajj season when the commission successfully conducted Hajj operations from its own internal purse.
That illustrates why past NAHCON leadership ventured into the Hajj Development Levy (HDL) initiative primarily to build social amenities for better service delivery to Nigeria’s pilgrims and secondly to put these structures to commercial use for additional income to NAHCON and Nigeria by extension. Such HDL amenities as the construction of hotel-like structures, multi-purpose halls, clinics etc., are ongoing in some locations with the aim of always providing pilgrims utilitarian treatments during Hajj operations.
Unfortunately, scarcity of funds in the face of escalating market prices of building materials, coupled with bureaucratic bottlenecks had impeded completion of the structures. Sadly too, the continued degradation of these fundamental projects retards the economic growth of the commission thereby defeating the reason behind the establishment of the HDL fund.
It was thus after a review of the HDL projects, that the Zikrullah Kunle Hassan board decided to pursue the Public-Private Partnership (PPP) option with vigour knowing that this method offers more guarantee in mobilizing additional funding for infrastructural development without further stressing the Commission’s lean purse, a condition made worse by a two-year deprivation of its customary means of income.
Indeed, the Covid-19 financial meltdown might have crippled the Commission’s capital creation channels on one hand; however, it also sank a deeper lesson that implies the Commission must diversify its revenue generation if it must remain afloat in future particularly if it must consolidate on the organisation’s financial autonomy blueprint without looking back. Hence, management saw its infrastructural deficit within the limitations of the Covid-19 pandemic as an opportunity to build and grow rather than a setback.
Consequently, NAHCON’s fourth board swiftly explored the financial prospect available under the Infrastructure Concession Regulatory Commission (ICRC) framework to make up for its insufficient capital. A committee on investment was first set up to propose ways of turning the Commission’s stagnant resources spread across the country into viable assets. This becomes highly desirous looking at the reality of the looming financial deficit occasioned by the government’s withdrawal of funding of the Commission’s Hajj operations in 2019.
Resultantly, NAHCON’s Chairman followed up the Committee’s assignments with several meetings with ICRC on its planned PPP. Among unsolicited PPP proposals, what the Commission had received was one by a company, D.I.D AL-Amana Nigeria Limited, which had offered to build 526 lock-up shops, eight warehouses each containing 12 units of shops totalling 96 units of lock-up shops on NAHCON’s fallow 2.6-hectare of land in Kano. The offer states that the construction would be made at no cost at all to the Commission but that the project would fund itself through concession for 50 years. D.I.D’s proposed duration was reduced by FEC.
Interestingly, statistics have proven that public construction projects are completed faster and better through the PPP pact than through traditional public procurement processes, in addition to ensuring that assets are maintained in good, serviceable conditions. PPP projects are often completed on time and on a budget because of the incentives which give the private party more control over project design and implementation while simultaneously preventing waste.
It was the D.I.D Al-Amana proposal that ultimately received the federal government’s blessing penultimate week. On Wednesday 15th December 2021, history was made as Federal Executive Council granted approval to the National Hajj Commission of Nigeria (NAHCON) to develop commercial properties, such as shops, warehouses, and zonal office on its 2.6-hectare Kano land through the Public-Private Partnership (PPP) arrangement.
This was revealed in a statement by Manji Yarling, Acting Head, Media and Publicity of the Infrastructure Concession Regulatory Commission (ICRC), that the project was approved by FEC in the realisation that the commercial development of some properties, owned by NAHCON, would facilitate efforts to raise the needed funds to meet up with the continuous growth of Hajj activities in the country.
Undeniably, NAHCON’s duties to its intending pilgrims cover provision and maintenance of facilities for screening and lodgment in departure centres before pilgrims proceed to Saudi Arabia for Hajj and after their return. Also, part of the national Hajj managers’ constant headaches has been this penchant to provide decent accommodations with other standard amenities to its pilgrims at these departure centres to ease travel pressures.
The infrastructural development agreement would serve as a major source of internally generated revenue for the commission to be carried out on concession for a period of 35 years.” It would also extend the assets’ life, reduce lifecycle costs, ensure availability and overall asset management methodology, which would allow NAHCON to fully carry out its functions efficiently,” the report added.
The 4th Board’s approach in turning dead assets into viable ones purposely to put the Commission on sound financial footing has only just started with the Kano project, more are underway. By the time other NAHCON’s fallow properties get the federal government’s approval for PPP concession, NAHCON’s infrastructural deficit would be a thing of the past. It is projected that the turnover certainly to emerge from the arrangement would be plenty enough to improve staff welfare, pay government dues and perhaps offer subsidies to pilgrims.
Fatima Sanda Usara is Head, Public Affairs, NAHCON
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