EXPLAINER: Despite govt's drive for a greater Kwara Hotel, prudence is a consideration - NATIONAL TRUMPET


Friday, February 2, 2024

EXPLAINER: Despite govt's drive for a greater Kwara Hotel, prudence is a consideration

Dr. Segun Ogunsola

Kwara State Government is impressed by the lively, yet diverse debates on the iconic and one-of-its kind Kwara Hotel, our heritage. 

At different times, in line with the principle of participatory democracy, public officials have offered useful explanations on the comprehensive remodeling and reconstruction works the government is embarking upon — along with assurances that the returns will be more than worth the investments because of the potentials of the historic facility. 

At 50,000 naira per room, for example, Kwara Hotel will recoup its investment in less than 10 years, with N3.15bn annual income. This excludes incomes from conferencing and other facilities in it. An argument may then be made that not all of its rooms will always be occupied every day. Yes. But a room in the choice hotel will also not remain N50,000 for the next 10 years. 

Despite all previous explanations, the government can’t be tired of offering as much information as possible to keep the people well informed.

First, as of today, the government has a contract for the Kwara Hotel’s project only with Craneburg Constructions. No other firm has any contract with the government on Kwara Hotel. We ask the public to disregard any claim to the contrary. 

Second, Kwara Hotel is a huge facility and a one-of-its kind in central Nigeria outside of the capital city Abuja. Established in 1975 and last given a major renovation over 20 years ago, Kwara Hotel had become decrepit. 

From 2019, just about 30 of its 173-key rooms were operational. Its ancillary facilities had become old-fashioned and worn-out. The public may note that previous administrations made attempts to fix the hotel. These attempts fell through. Yet, the government has a duty to the people and posterity to not just turn it around but to do it well and in a way that places Kwara Hotel ahead of others and maximizes its full potentials in central Nigeria. 

Suggestions that N3bn could have fixed the hotel to the standard are borne out of limited understanding of the build industry and trends of inflation. For those who believe that a BOQ costed at N3bn exists, they need to ask when this BOQ was prepared, by who, and for what scope of work. If the BOQ dated to 2021, for instance, then it couldn’t have envisaged an outright reconstruction or replacement of everything in Kwara Hotel except the skeleton. Today, unlike in 2021, Kwara Hotel is a complete empty shell of block work. 

And even if the BOQ touted by a certain firm contains the same scope of work as the one being used by Craneburg, it could hardly be a determinant of cost unless both sides are using the same materials. Where firm A goes for tiles priced at N3000 per square meter and firm B uses marble flooring worth N80,000 per square metre, their price and standard cannot be the same even if the size of their work is the same. The difference is in the quality. This puts a lie to claims that a job that contractor A costed at N1m cannot go for as high as N20m. 

The government understands that cost is a crucial factor in any project; however, the quality, scale, complexity of this project, as well as the inflationary trend reasonably explain the N17.8bn price tag. See it this way: the Mohammed Lawal administration last did a major renovation of the hotel at around N2bn circa 2002. All indices considered, the N2bn of 2002 is worth approximately N23.7bn in today's economy, considering the fact that the US dollar exchanged for just N109 as at then and it exchanges for N1,400 now. 

The government, clearly, has done several value engineering to reduce the price to the minimum possible without jeopardising the material and finishing quality.

The size of Kwara Hotel is significant, with a total built-up area of approximately 16,592 square metres — comprising the main building with Wing A and Wing B, composed of a ground floor and 5 upper floors, as follows: 179 rooms (173 keys); banquet halls; reception lounge (area: 536m2); restaurant (area: 235m2); deluxe club and lounge (area: 222m2); and coffee lounge bar (area: 131m2).

That also includes the ancillary building with areas of 1,590m2; chalets 5, 6, 7, and 8 (area: 294m2); shops /Bureau de Change (area: 312m2); botanical garden (area: 3,000m2). Other landmarks include the swimming pools with the related toilets and change rooms as well as its pump rooms and related mechanical works; squash court, pool deck pavilion, basketball, lawn tennis and badminton courts; gate house (area: 35m2); water treatment plant building (area: 215m2); covered staff car park; driveways, parking, drainages, kerbs and landscaping; approach fence, perimeter fences, pool fence and covered walkways. The job also entails external mechanical and electrical works, including a solar system that gives it 24-hour electricity supply. What about some vital components such as heating, ventilation, and air conditioning (HVAC) systems, lifts, curtain walling, sanitary wares, and Building Management System to smartly run the electric and mechanical components of the hotel post construction?

This scale and complexity require a considerable amount of resources and materials for construction and finishing work, while high-quality materials are specified to meet the project's specific requirements and ensure longevity. These materials come at a premium price, but they are worth the investment to deliver a premium, long-lasting product. 

The recent fluctuation of the exchange rate has also contributed to the cost. Add this to the fact that the contractors are deploying an assortment of experienced local and expatriate engineers and staff to deliver the project's proper finish to the highest attainable standard. These professionals bring a wealth of knowledge and expertise to the project, ensuring that the final product meets the highest possible standards. 

Let us have a conversation on the price. The estimated cost for constructing a high-standard luxury hotel is approximately 2,800,000 Naira per square meter. 

However, remodelling and reconstruction or rehabilitation may have lower costs, ranging between 1,400,000 Naira/m² and 2,000,000 Naira/m², depending on specifications and the firms. 

At the time of consummating the Craneburg contract, the cost per built-up area for the hotel was 1,074,769.09 Naira/m². However, due to currency fluctuations, the current equivalent is approximately N1,354,485.47 Naira/m² if the same contract were to be signed today.

This is the industry standard among graded construction firms for moderate luxury hotels and apartments — and it could be higher. 

Kwarans are assured that the government is not just fixing this iconic facility for the fun of it; the idea is to keep it many miles ahead of any other hotels in the state.

• Ogunsola, PhD in architecture, is the Honourable Commissioner for Housing and Urban Development, Kwara State

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