Monday, September 13, 2010

Nigerian Growth: R2bn in Tenders Up For Grabs

South African companies stand to win contracts valued at R2 billion for the new city development in Port Harcourt, the capital of Nigeria's oil producing area.

This massive infrastructural development was outlined to delegates at an investment forum in Durban at the weekend, ahead of the calling for international tenders for the first phase later this month.

The Durban forum was hosted by the Greater Port Harcourt City Development Authority (GPHCDA) and the eThekwini Council, as part of the twinning arrangement, and formed part of a visit to South Africa by Port Harcourt officials to seek out foreign investment for the new city.

Aleruchi Cookey Gam, administrator of the GPHCDA, which is helping to fund the development to the tune of US$2.5 billion, said the project's first phase had passed through the design stage and was now moving to implementation.

Tenders for contracts worth about R2 billion are to be advertised globally within the next few weeks, Gam said.

Dianna Games, Honorary CEO of the SA-Nigeria Chamber of Commerce, said South African companies should not miss opportunities currently on offer in Nigeria, and particularly in Port Harcourt, as the business environment there was improving and competition was increasing rapidly.

Waiting could significantly increase the cost of entry into a populous and potentially very lucrative market, she said.

Games said South African contractors had an excellent opportunity to enter Nigeria through Port Harcourt's new city, but warned that SA was not the only country being courted for investment and services.

South Africa is a key source of investment, contractors, suppliers and services for projects in Nigeria.

The African oil giant is one of SA's biggest trading partners and its biggest investment destination in West Africa.

SA exports to Nigeria increased from R550 million in 1999 to R5.4 billion in 2009 and dozens of South African companies are now operational there.

South African engineering company Arcus Gibb is principal consultant and partner on the new city development in Port Harcourt and has drawn up the master plan.

The new city development will be built alongside the existing Port Harcourt metropolitan area.

Port Harcourt in the Niger Delta is Nigeria's second biggest city after the commercial capital Lagos.

Opportunities in the development's first phase cover the sectors of power; water supply and reticulation; solid waste management; ICT; urban transport, and the construction of housing, commercial offices, industrial parks; and a golf course and clubhouse.

Durban Mayor Obed Mlaba, opening the investment forum, said the coastal city's twinning agreement with Port Harcourt was in line with the South African government's vision to help develop the African continent.

"We believe that unless Africa can develop itself, no one will. And if Africa does not determine what it wants to do, no one else will. Africa cannot be strong if it is not strong in its own back yard."

Durban is currently training 30 officials from Rivers State.

Arcus Gibb executive director Nick Ras said his company regarded Nigeria as a primary growth area and had made a strategic decision to grow its business there.

Trevor Juul, CEO of SA property development company SBT Juul, which is already involved in several major projects in Port Harcourt, said the area offered a return on investment of about 25 percent.

Developments the company is involved in include an airport hotel, a leisure and shopping centre inspired by Montecasino in Johannesburg, and an ICT park.

"We see Rivers State and Port Harcourt as Nigeria's most exciting opportunity," he told the audience of South African service providers, potential investors, property developers and funders.