No less than N700 million has been disbursed for the carrying out of survey works on the project site of 3,050 megawatts Mambilla Hydropower Plant in Taraba.
According to the Federal Ministry of Power who made the disclosure, the disbursed fund will be deployed by surveyors to ascertain the actual land area for the project, before the commencement of compensation to beneficiaries.
This development emerged as information surfaced the internet, that the payment of compensation to owners of the land, where the N2 trillion power plant located had yet to begin.
“Survey activity usually precedes compensation because you need to get the total land area. After that, you can then identify beneficiaries, as well as know the number of those displaced and those to be relocated,” the Special Assistant to the Minister of Power on Media and Communications, Aaron Artimas, stated.
According to him, there was a stakeholders’ meeting in Abuja, which was attended by the governor of Taraba State and other stakeholders.
“Also, representatives of the host communities were at the meeting and they formed a committee at the instance of the ministry in order to be able to adequately articulate the interest of the communities that are involved,” Artimas said.
He continued, “It might also interest you to know that the traditional rulers, elected officials from Taraba and other representatives came here in Abuja where the minister formally announced that payments had been made to the Taraba State Government, which is over N700m to carry out survey activities.”
What you should know: Mambilla Hydroelectric Power Station is a 3,050 MW hydroelectric power project under development in Nigeria.
When completed, it will be the largest power-generating installation in the country, and one of the largest hydroelectric power stations in Africa.
The power station is located in Kakara Village, in Taraba State, Nigeria. This is near the town of Gembu, close to the border with Cameroon. The power station sits across the Donga River, and consists of four dams and two underground powerhouses.
DPR reveals 4 major areas of focus for downstream operations of oil and gas sector
DPR has listed four major areas of focus for investment protection and business continuity.
The Department of Petroleum Resources (DPR), has outlined 4 major areas of focus for downstream operations, as part of its bid to continue to enable businesses and create opportunities in the oil and gas sector.
While making the disclosure in a signed statement, the Head of Public Affairs, DPR, Paul Osu, quoted Sarki Auwalu, the Director of DPR, as stating this, during a visit of members of Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), to the regulatory agency on Wednesday, September 23, 2020, in Lagos.
According to a report from News Agency of Nigeria (NAN), Auwalu, in his statement, listed the 4 major areas of focus as; quality for product assurance and customer satisfaction; the quantity for transparency, value for money and consumer protection; safety for personnel, assets, and public safety; as well as integrity for investment protection and business continuity.
He disclosed that DPR would continue to collaborate with DAPPMAN, to achieve national aspirations for the downstream sector of the oil and gas industry; which includes, price freedom, optimum petroleum products distribution network, petroleum products supply sufficiency, and curbing of petroleum products cross border leakages.
He noted that as part of the Federal Government’s measure to reduce the burden of the increase in the pump price of petrol, due to subsidy removal and deregulation of the downstream sector; it has introduced gas as an alternative source of petrol. With the Ministerial declaration of 2020 as the Year of Gas, a new world of alternative fuels and investment opportunities had been created.
The DPR boss encouraged DAPPMAN executives to avail themselves of these opportunities, and partner with DPR to enable value creation for investors and government, as it has developed opportunities to drive gas expansion and penetration.
“DPR has developed a Gas Business Incentives and Support Programme (GBISP), to drive gas expansion and penetration. This includes key strategic initiatives, such as the implementation of the gas network code program to encourage gas base industries (GBI’s), and support for duty waivers consideration for equipment, tools, and materials for downstream gas facilities.’’
“It also includes streamlining registration for Liquefied Petroleum Gas resellers, and the ongoing gas commercialization program being put in place to achieve the GBISP.’’
In her remarks, the Chairman of DAPPMAN, Mrs. Winifred Akpani, expressed delight at DPR’s robust regulatory initiatives and engagements with stakeholders in the oil and gas sector, which had created the enabling environment for their businesses. She also promised DAPPMAN’s support for the government’s policies, especially in its drive for price freedom in the downstream sector.
Convergence Partners’ subsidiary, inq acquires Vodacom Nigeria
The company has extended its reach via acquisition of Vodacom Business Africa’s operations in some African countries.
Convergence partners subsidiary, inq (formerly Synergy Communications) has acquired 100 per cent stakes of Vodacom Business Africa’s operations in the African countries of Nigeria, Cote d’Ivoire, Zambia with an intent to further acquire that of Cameroon, pending regulatory approvals.
Speaking on the motive behind the deal, the company said it had decided to embark on the next phase of building a unified Pan-African cloud and digital service provider, bringing to market a very relevant suite of next-generation technology solutions in the fields of Edge AI, SD-WAN/NFV and Cloud.
The transaction expands inq.’s regional presence as a leading enterprise solutions provider to 12 cities in seven countries across Africa including its existing operations in Botswana, Malawi, and South Africa with additional investment in Mozambique.
The statement quoted the Managing Director, inq. Nigeria, Valentine Chime, as saying, “Covid-19 has accelerated digital transformation, and inq. is perfectly positioned to deliver intelligent connectivity through seamless delivery of cloud and digital services and technologies to our clients. We are about simpler, seamless solutions.”
Hotels in Nigeria are on the verge of collapse
Hotels in Nigeria are on the verge of collapsing following rising operating costs
Big hotels in Nigeria are facing an existential crisis that could force some of them to collapse on the weight of rising operating expenses, without any revenue to absorb.
Reports from four of the major listed hotels on the Nigerian Stock Exchange, reveals a revenue decline of nearly 90%, due to a fall out of the COVID-19 induced lockdowns. The dire state of their financials has forced some of the hotels to consider massive job cuts, and cost reduction measures in a bid to survive. For most of them, it is either they take drastic actions, or face the consequences associated with piling losses and unpaid debts.
Since the breakout of COVID-19 in March 2020; the FG approved lockdown in Abuja and Lagos State, forced all the major hotels to shut down, a bitter sacrifice by the hospitality sector, as the government sought to contain the spread of the virus.
The lockdown effect on the results of these companies is reflective in the Q2 results of the main listed companies. According to the data, Ikeja Hotels (Sheraton), Tourist Company of Nigeria (Federal Palace), Capital Hotels (Abuja Sheraton), and Transcorp Hilton Hotel Plc have all lost 90% of their revenue in the three months preceding June 2020.
The hotels earned a combined revenue of N1 billion in the quarter, compared to N10.2 billion in the corresponding period of 2019. They are all wallowing in losses of over N4.7 billion for the quarter alone. Combined, they have about 3,502 employees as of 2019.
The situation in the hospitality sector is not only restricted to these four hotels. The same can be said for tens of other major hotels in Nigeria. In the latest Q2 GDP report published by the Bureau of Statistics; the Accommodation and food services business, which hotels belong to, recorded a GDP contraction of over 40%. Except for transportation and storage, which posted a 49% contraction, it is by far the worst in the country.
The Managing Director, Transcorp Hotels Plc, Mrs. Dupe Olusola, disclosed this during a Press Conference on Thursday, “The impact of COVID-19 on the business is like nothing the company has ever witnessed. The hotel and hospitality industry in Nigeria has never faced a crisis that brought travel to a standstill, including the Ebola Virus outbreak of 2014 or the recession of 2016. The slow pick up of international travels, restriction on large gatherings, the switch to virtual meetings, and fear of the virus, has drastically reduced demand for our hotels and occupancy levels to its lowest – less than 5%.”
Hotels across Africa also face a similar fate, but could likely fair better when the dust settles. Unlike in Nigeria, hotels in Kenya, Egypt, and even South Africa can rely on local tourism to drive occupancy rates. But in Nigeria, locals prefer smaller mushrooms hotels that are cheaper, and often well-furnished to meet their needs. Nigerian hotels, on the other hand, rely on commercial room sales, driven by the influx of business and leisure travels into the country.
With several airlines yet to fully operate due to reciprocal bans, it is highly unlikely that things will improve anytime soon.
How to avoid a collapse
To avoid an imminent collapse, the hotels need to do what is required in times like these. Explore new sources of revenues, and drastically reduce overheads. For starters, furloughing headcount will be top on the table, as services of employees who have no one to serve won’t be currently required.
It is a tough decision to make for these hotels, considering that the employees that will be affected, face an even worse outlook due to the economic crunch, which is likely to remain for years to come. Mrs. Olusola of Transcorp provides a first-hand insight,
“Despite the losses incurred, we have fulfilled our obligations to staff. At the inception of the pandemic, we maintained a 100% salary payment to our over 900 employees in March and April. We also activated various cost-saving initiatives, such as renegotiations of service contracts and restructuring of our loans. We suspended further commitment to buy fixed assets and operating equipment, as well as reduced our energy consumption and maintenance costs. Despite undertaking these, it has become apparent that more fundamental changes need to be made, for the business to survive. To this end, our workforce headcount will be reduced by at least 40%, and our reward system will be optimized.”
Hotels also need to cut down on other overheads. Food costs would have to be reined in, while also renegotiating inefficient pricing on purchase orders. Hotels will also have to renegotiate bank loans and explore capital raising efforts, to avoid further damage to their balance sheets. Lobbying a cash strapped government may seem futile, but hotel owners should push for intervention loans from the central bank, giving them enough buffer and financial stability to weather the storm.
With hotels reopening gradually, there is likely going to be stiff competition among the big brands, tempting them to undercut each other through pricing. Rather than cut prices, the prices should be adjusted on the naira side, to cater to the effect of the recent devaluation. This means foreign visitors will not witness a dollar increase in room rates, whilst the hotels will earn more on the naira side to deal with inflation.
These are the plausible and painful options available to branded hotel operators, if they are to avoid a collapse. Without bailouts and government support, management of these hotels needs to take urgent action, to reduce the impairments of shareholder valuations.