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Cablegate: Nigeria: Tinapa Business Resort Remains Dormant

VZCZCXRO1781
RR RUEHMA RUEHPA
DE RUEHOS #0303 2141433
ZNR UUUUU ZZH
R 011433Z AUG 08
FM AMCONSUL LAGOS
TO RUEHC/SECSTATE WASHDC 0084
INFO RUEHUJA/AMEMBASSY ABUJA 9768
RUEHZK/ECOWAS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC

UNCLAS LAGOS 000303

SIPDIS

TREASURY FOR DPETERS, RHALL, RABDULRAZAK
STATE PASS USTR FOR LISER, AGAMA
STATE PASS OPIC FOR ZHAN, MSTUCKART, JEDWARDS
STATE PASS TDA FOR LFITTS, PMARIN DSHUSTER
STATE PASS EXIM FOR JRICHTER
STATE PASS USAID FOR NFREEMAN, GBERTOLIN
DOC FOR 3317/ITA/OA/KBURRESS
DOC FOR 3310/USFC/OIO/ANESA/DHARRIS
USDOC FOR USPTO - PAUL SALMON
USDOJ FOR MARIE-FLORE KOUAME

E.O. 12958: N/A
TAGS: ETRD EFIN EINV PGOV NI
SUBJECT: NIGERIA: TINAPA BUSINESS RESORT REMAINS DORMANT

REF: A. Lagos 0061
B. Abuja 1306
C. 07 Lagos 768

Tinapa Operations Hamstrung by Bureaucracy
------------------------------------------

1. (U) One year after its official opening in April 2007, under the
administration of former Cross River State Governor Donald Duke, the
Tinapa Business and Leisure Resort in Calabar, developed at a cost
of naira 45 billion (USD 380 million) remains dormant. The failure
of the Government of Nigeria (GON) to approve the procedures and
guidelines agreed upon with private sector investors for Tinapa's
take-off in October 2007 constitutes the major cause of delay.
Though notable local and international retail businesses had
expressed interest in Tinapa, and some had actually moved in before
April 2007, the shops were closed down by the Nigerian Customs
Service (NCS) officials. Purportedly the whole Tinapa Shopping
Centre has not been documented in the official GON gazette as
required by law before it can operate as a free trade zone, a
process that commenced early 2007.

Delay Also Has Political Undertones
-----------------------------------

2. (U) Inyang Ewa-Henshaw, Finance Director of Tinapa Business and
Leisure Resort, June 25, told EconOff the current Cross River State
(CRS) government, as a shareholder, has failed to take ownership of
the project, because Tinapa was inherited from the previous
administration. He decried the lackluster approach of the state
government despite Tinapa's potential to fund itself, generate
revenue for the state, and create local employment opportunities.
He also attributed the delay in reconstitution of Tinapa's board of
directors to the state government.

State Spends USD 1.3 Million Monthly on Operation
--------------------------------------------- ----

3. (U) Ewa-Henshaw said that the Cross River state government spends
Naira 150 million (USD 1.3 million) monthly to keep the business
resort running despite the lack of activities. Major overhead costs
include the generation of 2 megawatts of power using diesel,
facilities maintenance, and staff salaries. He also estimated
revenue losses to the government are at over Naira 500 million (USD
4.2 million) monthly. Rents are currently suspended for the few
businesses that are open until the resort becomes operational,
Ewa-Henshaw said, which adds to the operational costs. This is to
encourage the tenants and give visitors a sense of what Tinapa could
offer.

4. (U) Comment: A fully operational Tinapa Business Resort would
provide Cross River State with the much needed revenue and
employment opportunities. Stalled operation, state government's
inertia, and non-compliance with GON's regulation are illustrative
of the problems facing similar commercial development projects
throughout Nigeria. At the very least, the Tinapa experience serves
as reality check for investors, developers, and state governments
rushing through the conception and implementation of projects in
Nigeria's still difficult political and business environment. End
comment.

5. (U) This cable has been cleared by Embassy Abuja.

Blair

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