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The Travail of Government Buildings

by Bisi Bamishe
March 15, 2021
in Back in the days
The Travail of Government Buildings
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The twin problems of under-insurance and non-payment of premium as at when due have continued to threaten the survival of government buildings

Tuesday March 22, 2006 will for a long time remain ingrained in Ganiyu Musilu’s psyche as the day he went through an unpleasant ordeal. He will not forget the trauma he went through when part of the Bank of Industry, BOI, collapsed on him, injuring his leg. The top eight floors of the 22-storey building on Broad Street, Lagos, collapsed, leaving three persons dead and 27 others hospitalized.

The building is now a shadow of itself with its shattered concrete and slabs held together by dangling rods. Consequently, this part of Broad Street and adjourning streets have remained closed to both human and vehicular traffic as the area was cordoned off by security men for over a year now. But the building is yet to be pulled down as a result of the huge sum involved for which the bank had sought financial assistance from both federal and state governments. According to Evelyn Oputu, managing director of BOI, “After the collapse, a study was conducted on how the building can be pulled down. A team came and surveyed the buildings around BOI and they found that the structures of the adjourning buildings are not strong in terms of stability, and therefore, if it was going to be demolished by explosion, it may affect the structure of other buildings in the vicinity. And if it does, the collapse may not be immediate, it will take time. So we ruled out the method of explosion.”

She explains further that “unfortunately, the method that will be used to pull down the building is going to be very expensive. We have tabled the matter to the federal government through Lagos State Ministry of Works and Housing. The report has been submitted and we are waiting for their reaction”.

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There are two options for pulling down the building. According to Demola Soyombo, a structural engineer, “It is either, to pull down only the affected floors so that the remaining floors can still be salvaged or the whole building be pulled down and restructured.”

Immediately the building collapsed, the consortium of underwriting firms that insured it for fire and business disruption, visited the scene to ascertain the extent of loss. The companies are Royal Exchange, Nigeria Agricultural Insurance Company, STACO Assurance, NEM Insurance, Gold Link Insurance, and Niger Insurance. Other members of the consortium are Leadway Assurance, Cornerstone Insurance, Law Union & Rock, LASACO Assurance and Union Assurance. They set up a committee which had series of meetings and later appointed two loss adjusting firms: International Loss Adjusters and Grand Metropolitan (the head adjuster), to examine the extent of damage and propose the amount of claim that should be paid to BOI. The magazine gathered that Grand Metropolitan later appointed a structural engineering firm, Enplan Group Consulting Engineers, Planners and Environmental Company for the job. Investigations carried out by the magazine revealed that the building with market value of N2.2 billion, was actually under-insured for the sum of N650 million, and that the premium was not paid until after the loss occurred. ‘Government’s failure to obey its own law is worrisome. The insurance Decree No. 2 of 2003 says ‘No premium no cover’. But they are not complying at all.

“Government is owing insurance companies premium in excess of N14 billion”, says Nick Emmanuel, an insurer. Since it is an offence in insurance not to pay premium as at when due in the event of loss, the insured will be penalized. So, in this case, it was not waived for BOI, even though it is government’s property. The bank was offered N400 million claim which it has rejected, “This and the issue of power-play between Lagos government and federal government are the obstacles to delaying the repairs of the building,” says Emmanuel. Federal and state government are involved in inter-ministerial discussions on the building, investigations by the magazine show that the committee set up in May  2006, by the Lagos State government on the building was scheduled to submit its report two weeks ago, but did not.

Meanwhile the federal government is not categorical on the method to be employed for the demolition, Suleiman Yusuf, general manager, Urban and Regional Planning Board, Lagos State, agrees with Oputu’s stand that explosion option will not be used to pull down the building. He says, “Explosion would not be considered because of the safety of people and other heavy buildings around the area”. But the people living in the area are worried about when they will be free to move about unhindered. Omonijo Samuel, a trader in the neighborhood asks, “When will they allow us to move around, when will the demolition take place with both governments busy with election campaigns now?” While Oputu reassured the bank is making concerted efforts to obtain the globally available best solution to handle the demolition of the delicate structure, the issue of claim settlement has not been settled.

The non-payment of premium as at when due and under-insurance are the problems confronting other government properties like the Nigerian National Petroleum Corporation, NNPC, Independence and Nigeria Telecommunication Limited, NITEL, buildings, all located in Lagos. NICON Insurance is the lead underwriter of the three buildings which belong to the federal government, but the magazine gathered that they were under-insured. The NNPC building was gutted on December 23, 2003. The fire which started on the eight floor was contained at about 12:30am with the assistance of the fire fighters and security personnel.

A panel, Inaugurated on March 6, 2004 by Kanu Agabi, the then minister of justice was charged with the responsibility of determining the immediate and remote causes of fire, assessing the extent of damage to the building and other NNPC properties.

When attempt was made in 2004 to repair the building, NNPC contractors submitted an estimate of N1.2 billion. Appaled by what it considered an outrageous bill, the panel of inquiry invited another quotation from a private construction company, SPITRAFT Nigeria Limited. To its surprise, the company presented a bill of N900 million. This is N300 million of the earlier one.

Bala Khamofu, SPITRAFT’s managing director, who says the cost was arrived at after assessing the extent of the damage by the fire, stated that reconstruction would mean  virtually rebuilding the whole structure.

The NITEL building was gutted in 1981 by what was described by members of the public as a rampaging inferno. Although the building has been renovated, it has not been completely occupied till date.

Speaking on the present state of the building, Adedayo Ojo, vice president, corporate communications of Testimonial Corporation, Transcorp, the new owner of NITEL and its facilities, told the magazine that there is a limit to the details on NITEL properties “since it is only Bureau for Public Enterprises that has such information.”

With the signing into Law of Insurance Act 2003 which mandates all public buildings to be insured, it is believed that there will be sanity in the system now. However, the Act which was signed into law four years ago is yet to be implemented. National Insurance Commission, saddled with the responsibility of implementing the law, late last year, set up a committee to work out the modalities for its implementation.

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Bisi Bamishe

Bisi Bamishe

I am a journalist with many years of experience in the field of Insurance and Pension. In 2003, I won Nigeria Media Merit Award of the IGI's Prize For Insurance Reporter of The Year

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