The Federal Executive Council (FEC) has approved the resumption of the Federal Capital Development Authority (FCDA) land swap initiative that began under the previous administration.
The minister of the Federal Capital Territory (FCT), Muhammad Musa Bello, who spoke to newsmen shortly after the council meeting today, June 16 at the presidential villa, Abuja said that FEC approved the resumption following a memo he presented to the council.
The initiative was designed to remedy the infrastructure deficit in the federal capital by swapping land with private investors who would in turn provide necessary infrastructure.
Muhammad Musa Bello said that some amendments were made to the original form of the initiative by establishing a legal framework to protect all parties.
“After a review of what has transpired over the years, and changes made, the Federal Executive Council approved that we now continue with the land swap initiative on the basis of amendments to the procedures as well as new safeguards introduced so that investors, the FCT, that is the government, as well as off-takers will be protected. So, this is what we discussed today.”
The minister explained that the deal is an initiative between the FCT administration and the private sector that would ensure provision of infrastructure to develop the districts in the territory.
He said that under it, the private investors will provide all the infrastructure within a particular district and then they will be paid for with land.
“They will take a certain percentage of the land developable within that district, while the FCT administration will take a certain percent.
“The whole essence is to encourage the development of the city according to the masterplan in designated districts and then, of course, to also to resolve the issue of compensation and payments and relocation of people as the city grows, and then of course, to reduce the overall housing deficit within the FCT. So, basically, this is the background.
“And what we have approved today is to establish a very solid legal system, whereby all the parties in this transaction are protected. And who are the parties, the first party is the investor, the second party is the FCT administration, while the third party are the off-takers.
“And in so doing, investors will create a special purpose vehicle, whereby the investors will come in and then the quantum of the investment will be determined on the basis of which the financial institutions will provide financial guarantees to the administration through performance bonds.
“And this performance bond will cover the totality of the project, and will be reducing as the project is being delivered.
“And then the land that is going to be used as swapping for the investment that is going to be held in custody by designated financial institution, which will serve as the custodian. Because, of course, as milestones are being achieved, land will be released to the investors which, obviously, they will sell and use to pay for their investment. So, this is the whole concept.”
The minister said that the idea of reviewing the agreement was to bring in “conditionalities that protects everybody, and all these is done based on the experience of the administration over the last few years regarding previous investments done particularly using the mass housing housing model, which is really in terms of size is just a fraction of what we are talking.
“So, this is the whole essence, this is what we intend to start rolling out now based on the conditions approved to the effect.”