The Federal Government is to resume the Federal Capital Development Authority (FCDA) land swap initiative, started by the administration of former President Goodluck Jonathan.
Minister of the Federal Capital Territory (FCT), Mohammed Bello, disclosed this to State House correspondents after the virtual Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari at the Presidential Villa.
Bello explained that the initiative, whose worth was put at about N1 trillion under the previous dispensation, was designed to remedy the infrastructure deficit in the FCT by swapping land with private investors who would in turn provide necessary infrastructure.
According to him, the resumption of the initiative followed a memo he presented to the Council, adding that some amendments were made to the original form of the initiative by establishing a legal framework to protect all parties.
“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 a lot of deliberations, the Federal Executive Council approved the FCT Land Infrastructure Swap initiative, which is popularly known as Land Swap, which was started sometime ago by previous FCT administration.
“After a review of what has 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 amendments to the procedures as well as new safeguards introduced so that investors, the FCT, that is the government, as well as off-takers will be protected. So, this is what we discussed today.”
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The Minister further explained that under the initiative, private investors will provide the entire infrastructure within a particular district and then they will be compensated with land.
He said: “They will take a certain percentage of the land 'developable' within that district, while the FCT administration will take a certain percentage.
“The whole essence is to encourage the development of the city according to the master plan in designated districts and then, of course, to also to resolve the issue of compensation and payments and relocation of people as the city grows, and then, of course, to reduce the overall housing deficit within the FCT. So, basically, this is the background.
“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 parties 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 reduced 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 designated financial institution, which will serve as the custodian. Of course, as milestones are being achieved, 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."
