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China set to approve $5.3 billion for Ibadan-Kano rail project

The Minister stated that China had assisted Nigeria by disbursing cash to fund infrastructure in the country.

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China set to approve $5.3 billion for Ibadan-Kano rail project

China is set to approve the sum of $5.3 billion for the ongoing railway projects across the country. This is to commence and complete construction of the Ibadan-Kano rail line.

The Minister for Transportation, Rotimi Amaechi, disclosed this on Friday, June 12, during a special broadcast progamme on Channels Television to mark the country’s Democracy Day.

Amaechi stated that China had assisted Nigeria by disbursing cash to fund infrastructure in the country, especially railway. He said:

“The Chinese government and people have been very helpful to Nigeria. They have released $1.6 billion for Lagos-Ibadan standard gauge railway (SGR). They’ve agreed to approve and we hope that by October, they should be able to approve the $5.3 billion for the Federal Government so that we can commence and complete construction of Ibadan-Kano railway.”

READ ALSO: Nigeria may benefit from Afreximbank and Thelo DB’s deal on railway development 

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Going further, the Minister pointed out that President Buhari had directed the release of $318 million as part of the 15% counterpart funding for the Ibadan-Kano rail line; more funds would be released next year.

He said that the Federal Government had planned to complete the Lagos-Ibadan rail line in May, and then start the Ibadan to Kano segment by June or July, but with the coming of covid-19 in March, the project had been stalled.

However, there was a presidential directive to start work on the project before September and as such, meetings were being held with the Chinese concerning strategies that would be applied while considering the health implications of covid-19.

Amaechi also talked about plans for the Bonny-Port Harcourt-Maiduguri rail line. He said, “We believe at the end of July, we should be at the cabinet seeking approval for the Bonny-Port Harcourt-Maiduguri rail line with the Bonny deep seaport and industrial park at Port Harcourt. That’s where we are now.”

READ MORE: CBN to set up poultry farm in Benue 

The Minister further disclosed that the Federal Government had been able to pay compensation at commercial rates, and not government rates to people and organizations that were displaced by the Lagos-Ibadan railway project.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

1 Comment

1 Comment

  1. Jeremiah Omueti

    June 30, 2020 at 5:09 pm

    It’s important to communicate a probable estimate of the project’s target completion date so that those overseeing the project can be appropriately incentivized and followed up.

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Hospitality & Travel

Lagos helicopter crash: AIB releases preliminary report

A preliminary report of the helicopter crash which happened last month in Lagos has been released.

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Helicopter crashes into building in Lagos, claims two lives

The Accident Investigation Bureau (AIB) has issued a preliminary report on the Bell 206B III helicopter crash that occurred at Opebi, Lagos State on August 28, 2020.

The report revealed that the helicopter, which was operated by Quorum Aviation Limited, had a valid Certificate of Airworthiness as the pilot’s last medical examination was valid till the 6th of August 2020.

It also stated that there was no evidence to show that an application for the exemption provided by the All Operators’ Letter AOL DG020/20 had been submitted to the Nigerian Civil Aviation Authority.

It stated, “The helicopter with registration marks 5N-BQW, operated by Quorum Aviation Limited, was topped up with 247 litres of fuel to full tank capacity on ground Port Harcourt Military airport (DNPM).

“The technical logbook entry revealed that there was an engine run for 10 minutes and a test flight of 20 minutes in preparation for a positioning flight the next day.”

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The report added that the flight was operated on a Visual Flight Rules (VFR) flight plan and that the flight plan, on board were one pilot, an engineer and a fitter mechanic with fuel endurance of 3:15 hours.

Click here for the full preliminary report

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Hospitality & Travel

COVID-19: Transcorp Hotel loses about N1 billion every month – CEO

Transcorp Hotels has seen its revenues ravaged by COVID-19 induced lockdowns and implementing measures to save itself from further losses.

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COVID-19: Transcorp Hotel loses about N1 billion every month- CEO

Transcorp Hotels, owners of one of Nigeria’s largest hotel Transcorp Hilton reports it loses about N1 billion every month due to the Covid-19 pandemic.

This was disclosed by the Managing Director/CEO of Transcorp Hotel Plc, Dupe Olusola, during an interactive session on Thursday. According to her, the management of the hotel met and decided to ensure that it kept costs down by restructuring its business strategy, diversifying into asset-light business models, and reducing the workforce, among others.

Olusola further disclosed that the company had suspended further commitment to buy fixed assets and operating equipment, as well as reduced its energy consumption and maintenance costs. She also confirmed Transcorp will be cutting back on all capital investments this year and in the foreseeable future until the outlook for the economy improves.

READ: Nigerian hotels count revenue losses due to pandemic-induced plunge

The hospitality sector has been one of the hardest-hit since the Covid-19 broke in late February. Data from the National Bureau of Statistics also reveal the sector contracted by as much as 40% in the second quarter of 2020, officially falling into recession.

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Nairametrics participated in the stakeholder’s session and noted a few critical remarks from the interview.

Below is the excerpt of the interview session:

How much has COVID-19 eaten into the fabric of Transcorp Hotels?

We had a drastic decline of over N9 billion. In March alone, we witnessed a N456 million loss. We have to remember that in March, there was a partial lockdown when everyone was trying to figure out what was happening. We were at N1.03 billion loss in April alone and this has continued to be the story every month. In June, we dropped by about N840 million.

READ: As Hotels resume operations, how prepared are they?

How will this development (loss) affect your staff strength?

We struggled to ensure that we would not ask people to go initially, that was our priority. We paid staff that did not work during lockdown 50% of their salaries and the ones that worked then were paid full salary. To keep the business running, we definitely have to let go of at least 40% now.

We engaged the staff Unions, both the Junior and Senior staff, before the implementation of that. We will ensure that employees are properly taken care of. The occupancies we have now are below 30% and with that, it’s impossible to have everyone around.

What is important to us is that we must ensure we are able to keep the hotel running as a national asset, because it has been in existence for over 30 years.

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We have ensured that we keep as many jobs as we can within this time frame, so this is an opportunity for us to engage the media and carry you along before such exercise. We have engaged actively with our employees and other key stakeholders. At the occupancy level that we are seeing, it is impossible for us to sustain the employees that we have to keep our doors open.

Precisely, how many will you lay off?

It is definitely a great burden to even consider a lay-off but we don’t have a choice but to keep the business afloat. We have over 1,000 staff and it appears we will not need more than 400 staff to ensure we keep the hotel running. What is happening is beyond everybody and it is just a situation we have found ourselves in.

What is your outlook for 2020, any hope of returning to the pre-COVID era?

We expect to get to the pre-COVID era by 2024 globally, because it requires the gathering of the people in preparing for events, etc. The new normal is real. We expect things to go back to what they used to be in Nigeria by 2024 also. We are not expected to do more than 30% of our occupancy this year and that is significantly low, and by this time next year, we don’t expect to see anything more than that. So, this is our trying time.

Strategy to sustain Balance Sheet before the end of 2020

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We are a hotel business, the food, room and the events we hold are our sustainers. We are definitely going to end at a loss in 2020. As I said, COVID will still be around in 2024. We will try as a business to be innovative, to look at different ways. We are reporting losses of almost N1 billion on a monthly basis and this is significant to us. We hope they can come up with some vaccination to help reduce the impact of the pandemic so that businesses can begin to pick up.

READ: Transcorp Hotels Plc Retains Positive A- (NG) GCR Rating

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Any palliatives from the government to hotels?

Governments across the world have given palliatives to hotels, but here there is no such package for big hotels in Nigeria. We have engaged at all levels of government on payroll support, tax rebate, support for employees, actively and widely as possible. Yet, these have not yielded any support, unfortunately. This is really why we have gotten to the point of disengaging our own staff. We have not seen any support from the government to actually help us.

How do you aim to restructure your loans and are there plans to raise funds?

This year is really just about losses. We have met with our stakeholders and lenders to work out how we can restructure our loans, considering some palliatives CBN brought on board like interest rate of 5%. We met the Bank of Industry (BOI) to get interest rates on our loan reduction. Some of these got a couple of positive responses. We are also considering raising funds through the right issues. We are raising N10 billion in order to pay off some of our existing obligations.

How will virtual tools affect your business model and future plans?

We are working round the clock to bring in solutions in line with the new normal to our guests and customers. How do we provide what they are looking for? How do we provide physical and virtual conferencing? We have also come up with Drive-in Movie Cinema, among others. We are going to ensure we run asset-light strategies to bring in new initiatives that can continue to help us remain standing in the business.

On our future plans, we have suspended our expansion plans. For instance, we initially planned to set up hotels in Port-Harcourt, Rivers State, which has been suspended for now. Also, we suspended further commitment to buy fixed assets and operating equipment as well as reduced our energy consumption and maintenance costs.

Bottom Line: The hotel faces a tipping point and as things stand survival is what is its priority.

  • To do so the hotel will have to make tough decisions some of which as job cuts, reduction in overheads, and suspension of capex related activities.
  • This will be a very painful restructuring process for the hotel group but it appears this is the only way it can survive.

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Hospitality & Travel

Emirates Airlines banned from operating in Nigeria

UAE’s Emirate Airline has been banned from operating in Nigeria.

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Just in: FG bars Air France, KLM and other foreign airlines, FG to spend N13 billion for automation projects in 4 airports, domestic flights, international passengers, Coronavirus: FG enforces immediate screening of travellers at airports with new directive

Emirates Airline has been added to the list of airlines which have been banned from operating in  Nigeria. The ban will take effect from the 21st of September.

This was announced by the Minister of Aviation, Hadi Sirika in a social media statement on Friday.

READ: Nigeria’s Innovate 1 Pay expands into Dubai’s tech market 

“The PTF subcommittee met today with EU Ambassadors to discuss Lufthansa, Air France/KLM ban. The meeting progressed well. Emirates Airlines’s situation was reviewed & they are consequently included in the list of those not approved, with effect from Monday the 21st Sept 2020.” Sirika stated.

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This comes as the UAE government has been accused of not renewing visas of Nigerians in Dubai and also rumours of a VISA ban for Nigerians applying for visas.

READ: Analysis: CBN bans maize importers from accessing FX

Last month, the UAE embassy in Nigeria denied there is a VISA ban on Nigerians entering the Middle Eastern country. They said: “At the onset of the COVlD-19 pandemic, the UAE took a number of precautionary measures to combat the virus’ spread, including the temporary suspension on issuing UAE visas for all nationalities as of March 17, 2020.

After entering the recovery phase of the pandemic, the UAE eased some measures on July 7, permitting visitors from various countries to adhere to the necessary precautionary measures, including by showing negative PCR test results within 92 hours of travelling to the UAE. This includes those visiting from Nigeria.”

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