Kwara Hotel: Crystal Group Issues Ultimatum To Kwara State Government

Ilorin, Kwara State– Kwara State Government faces a looming legal battle as Crystal Group of Companies has issued a 7-day ultimatum to the government over the breach of the Kwara hotel renovation contract.

The group alleges that the government awarded the contract to Craneburg Construction Company, violating a previous agreement to grant the Fix and Operate Concession of Kwara Hotels to Crystal Group.

Crystal Group, in a letter dated December 28, 2023, claims the government’s action contradicts the State Executive Council’s earlier approval for the hotel’s concession. The terms included a N3 billion commitment from Crystal Group for renovation and management, along with concession fees and profit-sharing arrangements.

Afrika Eyes earlier reported how the Kwara State government awarded the project to Craneburg Construction Company Limited, which aims to transform it into a five-star hospitality facility at N17.8 billion, with a projected duration of 24 months.

Also, the Kwara State Government had earlier granted the Fix and Operate Concession of Kwara Hotels to Crystal Group of Companies. The approval of the State Executive Council was conveyed to the company by the Group Managing Director/CEO of Harmony Holdings Ltd., Abdullahi Abdulmajeed, in a letter dated June 2, 2022.

According to the letter, the Terms of Engagement include the commitment of the sum of N3 billion by Crystal Group of Companies for the renovation and management of the hotel; the payment of concession fees for the 1st five years; and revenue profit sharing for the subsequent years, amongst other things.

The Kwara State House of Assembly, having received a copy of the State Executive Council’s approval for the Concession of Kwara Hotels to Crystal Group of Companies, deliberated on the issue on the floor of the House and passed a resolution approving the concession arrangement.

In a dramatic turn of events, the Kwara State government re-awarded the same contract to Craneburg Construction Company for the sum of N17.8 billion without legally revoking its concession approval to Crystal Group of Companies.

According to a letter addressed to Kwara State Governor, AbdulRahman AbdulRazaq, and signed by George M. Oguntade SAN, the Lead Counsel to Crystal Group of Companies, neither the Commissioner for Business Innovation and Technology nor Harmony Holdings Ltd., informed their client on behalf of the state government that the proposed Concession Agreement had been cancelled or revoked in any manner.

“Our client is utterly shocked at this state of affairs given the huge cost it has incurred not only in meeting the onerous conditions for the award of the concession but also in assembling a team of professionals in anticipation of the commencement of the project,” the letter stated.

“We are respectfully requesting your Excellency to intervene promptly in this matter by cancelling the purported contract awarded to Craneburg Construction Company and reverse the wrong that has been meted out to our client.

“We must further advise that if the contract purportedly awarded to Craneburg is not rescinded or we do not receive any response within 7 (seven) days, we will upon our client’s instruction proceed to Court to seek inter alia, Orders of Specific Performance as well as Injunctive Reliefs against all parties involved.

“We are hoping however that this will not become necessary bearing in mind the negative impact it will have on the people of Kwara State generally”.

The decision to award the N17.8 billion contract to Craneburg has sparked public debates in Kwara.

While some believe that the arrangement with Craneburg is shrouded in secrecy because of pecuniary interest, others have argued that the government ought to have stuck with its earlier arrangement with Crystal Group of Companies to save funds for other developmental needs. Some have gone a notch further to request the BOQ for the project.