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.
Minister of the Federal Capital Territory, FCT, Mohammed Bello, said this at the end of the council meeting chaired by President Muhammadu Buhari on Wednesday, at the Presidential Villa, Abuja.
The initiative whose worth was put at about N1 trillion under the previous dispensation was designed then, to remedy the infrastructure deficit in the federal capital by swapping land with the private investors, who would, in turn, provide the necessary infrastructure.
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The Minister said FEC approved the resumption following a memo he presented to the council in which some amendments were made to the original form of the initiative by establishing a legal framework to protect all parties.
Bello told the State House correspondents during the post-FEC meeting briefing: “Today, at the Federal Executive Council meeting, I presented a memo and an update on the FCT Land Infrastructure Swap Initiative at the council.
“And after deliberations, the Federal Executive Council approved the FCT Land Infrastructure Swap initiative, which is popularly known as Land Swap, started some time ago by the previous FCT administration.
“After a review of what 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 the amendments to the procedures as well as the new safeguards introduced so that investors, the FCT, that is the government, as well as the off-takers, will be protected. So, this is what we discussed today.”
Speaking further on the key provisions of the initiative, the FCT Minister explained that the deal is an initiative between the FCT administration and the private sector that would ensure the 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.
He added: “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 resolve the issue of compensation, payments and relocation of people as the city grows, and then of course, to reduce the overall housing deficit within the FCT.
“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 a designated financial institution, which will serve as the custodian. Because, of course, as milestones are being achieved, the 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 informed that the idea of reviewing the agreement was to bring in “condition.”
