How Fed Govt can save multi-billion naira Tinapa

By IAfrica
In Nigeria
Jun 24th, 2014
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Tinapa Business and Leisure Resort should have been a money-spinner. Why is its growth stunted? DEJI ADEMIGBUJI examines the factors against the growth of the resort and establishes that without the Federal Government’s support, all cannot be well with the country’s only retail and tourism-based Free Trade Zone 

It is called a Free Trade Zone. But, in reality, it is not. The benefits attached to such status are denied it.   The Tinapa Business and Leisure Resort, Calabar, Cross River State is regarded as the African Business Resort. But what manner of a business resort looks like a ghost town?

The Tinapa Free Zone and Resort, Calabar widely regarded as Africa’s Premier Business Resort and the only retail and tourism-based Free Zone in Nigeria, is wearing the garb of a dying tourist destination. The resort, which enjoyed so much media hype on CNN and a permanent bottom strip ad on Super Sport channels, is regarded as the major single investment of the state government but the multi-billion naira investments of the government of Cross River State looks like a fading empire.

Walking from the Tinapa Lakeside Hotel through the pre-built retail and wholesale accommodation measuring about 65,000m2, the shops, which were earmarked for letting as stores and warehouses in four composed emporia of about 10,000m2 each, one hardly sees any serious transaction. The sullen eyes of the sales hands bear credence to the bad business climate at Tinapa. Most of the shops are virtually empty leaving their business posters and signages to offer an empty promise to any visiting tourist. The floors of the walkway to the retail shops are being taken over by grass.

At Tinapa, there are 80,000 square metres of rentable space for retail and wholesale business, including four 10,000-square-metre emporiums, as well as smaller shops and warehouses. The resort’s facilities include a casino; “Studio Tinapa” (a film studio); a three-star hotel known as Lakeside Hotel; a children’s arcade; restaurants; a mini amphitheatre; a night club and pubs.

The resort also has an artificial tidal lake with water drawn from River Calabar; a water park; leisure land and a parking lot for about 4,000 cars.

A taxi driver, who often plies Calabar in the night, told The Nation that when tourists lodge in the Tinapa Lakeside, they often go outside the resort to club as the entertainment strip, which  comprises spaces for a casino, an eight-screen digital cinema, vintage international standard restaurants, a night club and pub, has been closed to business. The Nation sited some expatriate engineers who are working on a new hotel in the resort clubbing at Mirage Hotel on June 19.

The artificial tidal lake that feeds from the Calabar River, which used to be an allure for tourists, is now dirty. The lake used to flow beautifully into the Atlantic Ocean. Now, it is quiet and deserted.

This is the state of Tinapa, whose pay off lines, “The African Business Resort” in some of its TV commercials still resonates in the mind of many, prompting concerns among stakeholders.

At a time, the Comptroller of Customs in Akwa- Ibom and Cross River states, Mr Akande Bamidele,  raised the alarm when companies operating in Tinapa issued a 60-day notice, signifying their intention to relocate from the premises of the resort.

Bamidele, who disclosed this when he visited the Cross River Security Adviser, Mr Rekpene Bassey, said that the access roads and the shallow seaport of the resort were some of the challenges enumerated by the companies.

Bassey said: “Tinapa is dear to us; that is why we have been investing so much to keep the place going and we are doing everything to address the traders’ complaints. Tinapa requires sustained qualitative and institutional support, which is devoid of bureaucracy, to survive and flourish. The Cross River Government is working assiduously to upgrade and add value to the infrastructure and operational environment around the resort. That’s why the management of Tinapa has been handed over to AMCON.”

The Chief Press Secretary to Governor Liyel Imoke, Christian Ita, listed some factors inhibiting the growth of Tinapa.

He said: “There was no gov
ernment policy on Tinapa
Business and Leisure Resort and Tinapa was never gazetted. You call it a free trade zone but the Nigeria Customs Service is always there. If you buy anything at Tinapa now, the Customs will be waiting for you at the gate. Does that kind of arrangement apply in Dubai?

“Besides, the Tinapa project was predicated on the assumption that about 25 flights would come into Calabar everyday and that roughly 80 percent of those flying in would be possibly going to Tinapa but that is not the case now.

“For those who are supposed to make use of Tinapa, the road between Aba and Calabar is bad. Similarly, people from the north-eastern and north-central parts of the country are afraid of travelling to Calabar because of the bad roads and the low canopy at the Ikom Bridge.

“The Calabar channel into the Calabar Port has not been dredged and large oceangoing vessels cannot berth there. So, these are part of the factors militating against the fulfillment of the Tinapa dream.”

Ita solicited the assistance of the Federal Government in efforts to make Tinapa functional.

“For instance, for Tinapa to become truly functional, the Calabar River ought to be dredged to enable ships to berth there and the federal highways linking Tinapa with other parts of the country should also be rehabilitated.

“Then, the issue of customs has to be addressed. It is, however, important to note that only the Federal Government could address these particular issues.

“That notwithstanding, the state government has gone in to rescue Tinapa by retailing some things there.

“For instance, the state government has given out one of the emporiums in the resort to the General Electric (GE) for its training school, which will start operations very soon,” he said.

Ita said the main goal of the government was to transform Tinapa into a global shopping hub and tourism resort.

Ita said: “One of the major problems or challenges we have with Tinapa is that the place was not gazetted. The resort is supposed to be a free trade zone; yet, we still have the Customs Service there. The roads from Calabar to Aba and Calabar to Makurdi are not good; the Calabar River has not been dredged and ships, which are supposed to berth there, first go to Onne; these are some of the factors militating against the success of Tinapa.

“You are also aware that because of the debt which the state government inherited from the last administration, Cross River has already reached its threshold on borrowing; meaning that we can no longer borrow money. Now, Cross River spends at least N100 million to maintain Tinapa every month and the current administration has done everything to make Tinapa work.

“If you go there today, the small money they are making is from the hotel or water park. But the state government has done everything possible to make Tinapa work and increase its footfalls.”

Akande explained that the state of the seaport was also affecting tourism in the state. The Tinapa Resort, he pointed out, is also suffering, adding that due to the situation, some investors were already making plans to move elsewhere.

“We have identified some key factors in the lull in economic activities in the state. The bad road is one of them. We have seen that the government is doing very well in terms of providing good roads within the city, but the problem is the road linking the state to other states is the main problem. They are very bad sections and this is really affecting economic activities in the state adversely. The road is a serious problem as we have been in touch with business men in Abia and the neighbouring states but they complain that they cannot come here to do business because of the bad road,” he noted.

Akande also pointed out that the dredging of the Calabar Channel has also been noted as one of the cause for concern and something should be done about it urgently. Also, an online publication also quoted a top official of the Calabar Free Trade Zone, who pleaded for anonymity, saying the Tinapa is also challenged because of problems associated with shipping goods to the Resort which had made the proper kick-off of economic activities in the state a stalemate.

“Calabar Free Trade Zone feels highly challenged because the road leading from Onne, which is the nearest port to Calabar, is something that needs urgent attention. It causes great discomfort for our people to bring in their goods or take out their goods. The Calabar Port that is among the oldest ports in Nigeria, which has got a lot of history behind and it, is attractive to shipping lines. We have been told of so many reasons why it is still not working, but we are still unable to understand,” he said.

When The Nation visited some of the Shops in Tinapa, a lot of clearance sales are going on at a highly discounted rate. One of the attendants who spoke with The Nation said the owners of the business have really made loss and some of them are defaulted in paying their loans to banks. This perhaps explains why the Managing Director of the Ugonabo Trading and Logistics in Tinapa Elvis Masor, told a South South focused publication Niger Delta Report that he would leave Calabar as soon as the goods he has are sold out. According to him, there was no need continuing to stay and incurring losses.  “You can see there is no traffic. You can stay from morning till night. Virtually we don’t make sales again. Basically it is actually the major problem we are having because what really do is importation and this is known to be a free zone and most of our customers who come from other countries when they come they get some embarrassment from customs discouraging them from coming in to buy. Our mode of importation that we feel could be addressed in future.

We are expecting that the
Calabar seaport should
work, because during our importation, we bring in from Onne in Rivers meanwhile Calabar is the final destination. Goods coming in from Rivers would still be on transit to Tinapa. Had it been the Calabar Port is working, it would have also gone a long way to salvage most of the problems we have as a free zone,” he said.

Explaining why the ineffective use of the Port militates against Tinapa Business Resort and Cross River as a whole, the General Manager of Ecomarine (ECM) terminals, Mr. Kingsley Ihenacho, whose company was concessioned to manage the Calabar Port for 25 years, said the non-completion of the dredging of the channel to the advertised draft of 9.4m meters is the biggest threat to the development of the port with adverse effect on their financial projection and cargo throughput which was predicated on the completion of the dredging as assured during the concession exercise.

“The drop in performance in general cargo and container volumes shown above are purely affected by non-completion of dredging and pull-out of container services from Calabar(by Maersk line). This is in spite of ECMT’s huge investment in this sector of our operation (in terms of equipment purchase). Also, with the withdrawal of Baco Liner services in Nigeria, Calabar port is completely without a container service. At the moment, all the cocoa exporters are trucking to Lagos for consolidation and export at the expense of the government of Cross River State in terms of revenue and to the port in terms of cargo traffic,” he said.

He said this among other problems have stunted the growth efforts of the various Free Trade Zones in Calabar (CFTZ and TFTZ) and has largely made them unable to realize their basic potentials. “The FTZ are all struggling presently due to the non-dredging of the Calabar river channel. Based on all of the above, the going-concern status of ECM Terminals Calabar is threatened,” he said.

The Managing Director of Tinapa, Bassey Ndem said because of the parlous situation, importers and other investors had continuously used the Onne and Lagos ports to ship in goods into the state: a situation he said was having very serious financial implications on importers, manufacturers and entrepreneurs alike.

Tinapa was initiated by Governor Donald Duke as a way to boost business and tourism in the state. Over $350 million was spent on initial development. The first phase of Tinapa Business Resort  and Free Trade Zone, Calabar was commissioned on the April 2, 2007 and its 10 kilometres (6.2 mi) drive from Calabar by a roundabout route, but the Federal Government is building a more direct 2.5 kilometres (1.6 mi) access road to link it with the city.

However, the legal status of the Tinapa Free Trade zone has been uncertain. It is owned by the Cross River State government, but only the Federal Government can operate a free trade zone. Governor Liyel Imoke had appealed to the Federal Government to take a stake in the project, and to remove uncertainty about its status which is hindering investment. He suggested that one approach could be to decouple the leisure facilities from the trading zone.

Right now, Asset Manage
ment Corporation of Nige
ria (AMCON) is set to take over the management of Tinapa Business Resort following a settlement agreement with the Cross River State government for the transfer of its controlling interest in Tinapa.

By the agreement, it was gathered that AMCON is to buy back Tinapa’s debts totalling N18,509.744.797.05 and also provide N26 billion for the revitalisation and resuscitation of the resort to reposition it as a private sector driven enterprise. But whichever way it will be revived out of its ghost town ambience, the global tourist are waiting for the promises Tinapa had made to them in some of its numerous TV commercials on CNN and other platforms during Duke’s administration.

But the state government is also looking at other ways of stimulating Tinapa’s growth.  Ita added that the location of Tinapa has encouraged the government to develop an estate called Summit Hills.

He said: “The state government is building the new Summit Hills Development Area and that is where the government is constructing the International Convention Centre. The government has constructed a new road there because it realised that the distance between Tinapa and the city-centre is about 14 kilometres. This new road shortens the distance by almost eight or nine kilometres, bringing Tinapa closer to the city centre. Get this clear, AMCON is not just taking over Tinapa; it is investing N26 billion in the resort to enable it to function optimally.

“Tinapa is in Cross River and nobody is taking it away from us. If Tinapa works, it is to the glory of Cross River. AMCON is investing N26 billion to develop the entertainment aspect of the Tinapa resort to increase its patronage; there is no controversy over Tinapa.”


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