The concessioning of FESTAC phase 2 will fetch government about N25.7 billion, Ms. Pepple said.
The Federal Executive Council, FEC, on Wednesday granted approval for the reclaiming and concessioning of the FESTAC phase 2 project.
The Minister of Lands, Housing and Urban Development, Ama Pepple, said at the end of the meeting in Abuja that the project is expected to fetch government about N25.7 billion from the concessioner apart from ground rent of about N150 million every year.
The Minister also said the area, measuring about 1,126 hectares of land, which was acquired since 1977 for the African festival of arts and culture, FESTAC, would be concessioned to a company called New FESTAC Property Development Company.
Four other companies including PW Nigeria Limited, SCC Nigeria Limited, Enacco Nigeria Limited and Funtaj Limited would be joined as concessionaires.
The existing FESTAC (Phase 1) is a largely residential area located in Amuwo Odofin Local Government Area of Lagos and providing accommodation to tens of thousands of residents.
Ms. Pepple, who was briefing State House Correspondents at the end of the meeting along with the Minister of Interior, Abba Moro; and Information, Labaran Maku; said Council gave the approval after deliberating on the economic viability of leaving such a vast expanse of land fallow for so long.
“The area involved is about 1,126 hectares of land, and we estimate that when the largely swampy area is completely reclaimed and sand filled, that we (government) will be able to create at least 7,000 plots to make the new area FESTAC phase 2 be like a new city ,with houses, shopping malls, schools, police station, health centres, etc”, she said.
The minister explained that the project, which is expected to yield a lot of money for government, had been presented to the council in 2006. She said the project was stepped down because at the time, the money the project handlers said would accrue to government –N10.6 billion, was too little considering the size and location of the property.
“We worked on it again and we looked at what it will cost the company to reclaim the land and the figure that we came up with was N25.7 billion. It is going to be concessioned over a 30 year period, but they are going to have a three year moratorium to enable them to start the project, stabilize the project,” she said.
Ms. Pepple said the concessioning of FESTAC is purely funded by the private sector.