The Nation Newspaper

Tag: Costain

  • Two Lagos bridges to make way for standard gauge

    •Costain, Jibowu to be affected, says minister 

    THE Costain and Jibowu bridges on Lagos Mainland will soon be demolished to pave way for the construction of the Lagos-Ibadan standard gauge rail line, the Minister of Transportation, Mr Rotimi Amaech, has said.

    Amaechi spoke yesterday at Papalanto in Ewekoro Local Government Area of Ogun State, ending speculations on the fate of the Lagos bridges.

    The Chinese contractor, the China Civil Engineering Construction Corporation (CCECC), had identified the bridges as being too low for the head room projected for the proposed speed train.

    The minister said the Ijoko Bridge in Ogun State would not be demolished, adding that stakeholders agreed that the rail tracks should go down by a few metres to give them the right height under the bridge.

    Speaking after a tour of the project with other members of the steering committee, Amaechi said it was decided that though the two bridges would be demolished, they would be rebuilt immediately to avoid disruption of the state’s pattern of mobility.

    Amaechi said the two bridges carry a huge cargo and passenger traffic.

    On the project, Amaechi disclosed that CCECC will begin to lay the tracks from Lagos in December, while that of Papanlanto to Ibadan will start by next May.

    Amaechi, who restated Federal Government’s commitment to the December 2018 deadline for the project, said the areas that pose the greatest challenges are Lagos, Abeokuta and Ibadan, especially the cities’ built-up areas.

    According to him, major infrastructure, such as bridges, electric cables, water and gas pipelines, houses and telecommunications cables, would be relocated to give the project a smooth sail.

    He expressed the confidence that despite the challenges, the Presidential Order to deliver the project remained on course.

    Amaechi said he was confident that CCECC’s work flow was in tandem with the work plan designed by the Ministry of Transportation and its stakeholders.

    He added: “I have seen that the contractor has put three different gangs in place: the first at Ebute Metta, the second at Ijoko and the third at Papalanto, all of which are working simultaneously. If this pace is maintained, we have no doubt that we will be able to deliver this project to Nigerians on schedule.”

    The minister urged the Project Coordinator, Mr Leo Yin, to complete the necessary documentation to enable the government provide tight security on the project site.

    He visited Ijoko, Itori and Papalanto community in Ogun State as part of the monthly site monitoring of the project.

    Yin expressed the confidence that the project would be delivered by December 2018.

     

  • FIRS shuts Costain over N2b tax debt

    FIRS shuts Costain over N2b tax debt

    In continuation of its efforts to recover unpaid taxes, the Federal Inland Revenue Service (FIRS), yesterday, sealed the offices of Costain West Africa over N2billion in company income tax, Value Added Tax  (VAT) and other taxes.

    Also sealed were First Deepwater Discovery Limited, CAT Construction Group Limited and OPI International Limited, all in Lagos.

    First Deepwater Discovery Limited, located at 20, Ogunlana Drive, Surulere, has tax liabilities of N230million, made up of withholding tax, education tax and VAT. CAT Construction Group Limited, located at 20C Ogunlewe Street, off Ligali Ayorinde Street, Victoria Island, is owing N176million in taxes. OPI International Limited, located at UBA House, Marina, is also owing N3 million in company income tax and VAT.

    A top management staff of OPI pleaded with the enforcement team to grant the company an extension of the grace period for the resolution of its tax liabilities.

    However, Anita Erinne, leader of the FIRS enforcement team, ignored pleas and ordered the office sealed after she had ordered the staff out of the office.

    “I have to carry out the directive as I have been directed,”  Erinne said.

    The FIRS team arrived Costain West Africa Plc’s office, located at 174 Funso Williams Avenue, off Apapa/Oshodi Expressway at about 1pm. About half an hour later, the company was sealed.

    A top official of the company told the team that the company’s chairman was not available to attend to the team. The official also claimed the company has already started discussions with the FIRS on how to defray its tax liabilities, something Erinne said she was unaware of.

    In Onitsha, Anambra State, the FIRS team shut down four business premises. At the Building Materials International Market, Ogbunike, the team closed down the offices of Shoelz International Limited over a tax debt of N32million. Also affected by the enforcement exercise was Midfield West Africa Limited, which defaulted on a tax obligation of N11million. Felixo International Hotel Limited in Oba was sealed for owing taxes totalling N15million.

    Also in Onitsha, Ekwenibe and Sons Trading Company Limited was shut over a tax liability of N78million.  Mr. Chibuzor Edeh, leader of the enforcement team in Onitsha, said all the affected companies were served several reminders, which they ignored, leaving the FIRS without an option but enforcement.

    The renewed crackdown on tax defaulters began on Monday, when FIRS enforcement teams shut the premises of four companies in Lagos and Owerri, Imo State. In Lagos, Capital Oil Plc had its offices shut over a tax debt of N30million. In Owerri, the FIRS sealed two eateries and a hotel. The affected eateries were De Mange Eatery and City Chef, which owe  N20million and N2.1million respectively.

  • Labour pickets Costain over unpaid salaries

    Workers of Costain West Africa Plc,yesterday in Lagos picketed the construction firm over backlog of unpaid salaries and pensions.

    The angry workers who besieged the company as early as 7am with placards, expressed dissatisfaction over unpaid salaries and refusal of the owners of firm to keep to their promise of paying up.

    The  workers said its workers in Lagos, Yola, Adamawa State, Abuja and Port Harcourt, Rivers State are  owed six, 10, nine and  nine months respectively.

    Besides, pensioners of the firm claimed they are being owed 62 months arrears.

    Chairman, Construction and Civil Engineering Senior Staff Association (CCESSA), Costain Chapter,  Mr. Ibrahim Opeola,  who addressed the workers, said the management and of the firm are  insensitive to the plight of the workers.

    He alleged that managemnt of the firm diverted its resources to developing their personal businesses leaving the workers to bleed.

    He said: “Our retirees and workers are dying and contractors and suppliers are being owed millions of naira, yet the management of the company abandoned us. We have not been working since the past two weeks because there is no money to buy fuel while our electricity company has disconnected us.’’

    One of the retirees, Peter Ehijiejba, who spoke with  reporters  said life has become intolerable to him due to his unpaid pension.

    “I have worked with this company for 21 years, but I am yet to get my entitlement. It is sad because most of us are dying and some of our colleagues are on sick bed. We want to plead with the management of the company to consider our age and give us what belongs to us,” he said.

    Chairman of the company, Mr. Kola Kareem , however, confirmed that the company owes junior workers three months, while senior workers were owed four months salaries

  • Costain rallies on settlement of debt, receivership

    Market consideration of Costain (West Africa) Plc has risen by more than 85 per cent over the past two weeks as the troubled construction giant struggled through settlement of a bank loan that had led appointment of receiver manager for its assets.

    Costain has maintained a steep rise at the stock market in the past two weeks, especially against the sustained bearishness that pervaded the market all through last week. The Nation’s investigation indicated a capital gain of 85.2 per cent over the past two weeks.

    Costain’s performance contrasts sharply with w two-week average loss of 2.83 per cent indicated by the stock market’s common index.

    Costain has sustained its position as the second highest gainer, in percentage terms, in the market over the past two weeks. It rose by 43.48 per cent two weeks ago and added 29.09 per cent last week.

    Costain’s share price had opened two weeks ago at N1.15 per share and close last week at N2.13 per share, its opening price this week.

    The All Share Index (ASI), the common value-based index that tracks all equities on the Nigerian Stock Exchange (NSE), closed last week at 40,571.62 points as against its opening index of 41,751.55 points penultimate week.

    Market analysts attributed the renewed interest Costain, Nigeria’s first generation construction giant that had sunk to its nominal value of 50 kobo, to the exit of the company from debt-induced receivership.

    Head, Research and Investment advisory, Sterling Capital Markets Limited, Sewa Wusu, said the steep rise over the last two weeks was due to positive investors sentiment owing to the liquidation of the company‘s debt with First Bank.

    “The company regained investors’ patronage after the news emerged that it has finally settled the debt. So most forward looking investors saw value in its share price given that the equity was trading at low. This explains why the positive sentiments have favoured the stock. There are also possibility that the company might secure some juicy contracts into the year to boost earnings expectation going forward,” Wusu said.

    The Board of Costain late last month announced that it had made final settlement of concessionary loan to FirstBank of Nigeria Limited, thus finally liquidating the debt which had led to the appointment of a receiver manager by First Bank for the company late last year.

    According to Costain, the final instalment of the concessionary sum was paid via its letter to FirstBank dated January 13, this year, which FirstBank acknowledged receipt of the sum paid via its letter dated January 15, this year.

    “FirstBank of Nigeria Limited has confirmed that based on this development, Costain (West Africa) Plc is deemed to have discharged its obligation to the bank on this facility. The bank also stated that steps are being taken to discharge the receivership at the Corporate Affairs Commission and all relevant authorities will be notified as appropriate,” the NSE had stated in a notice to the investing public.

    The Nation had earlier reported that the board of Costain was considering decisive measures to be taken to rescue the ailing construction company.

    The board had met to consider urgent measures to be taken to halt the downspin and resuscitate the struggling 65-year-old construction company. These included possible restructuring strategies, the wobbling financial position of the company and its consistent failure to meet prerequisite post-listing and disclosure requirements.

    The first construction to be listed on the NSE, Costain has struggled with streak of losses and poor corporate compliance records over the years. The NSE imposed a sanction of N2.85 million on the company for failure to submit its 2011 audited report within the timeline, a similar situation that led to higher fine of N3.6 million for the 2012 audited report. It was also fined N575, 505 for failure to obtain the necessary approval from the NSE before announcing the appointment of an external auditor.

    Latest audited report and accounts for the year ended March 31, 2012 showed a generally negative performance outlook. With declining sales, increasing losses and negative working capital, significant erosion of the net assets had heightened concerns about the prospects of the construction company.

    Total turnover dropped from N9.20 billion in 2011 to N7.39 billion. Total cost of sales and administrative expenses stood at N9.11 billion in 2012 as against N8.39 billion in 2011, setting the background for the huge increase in loss before tax from N880.82 million to N1.93 billion. Loss after tax rose to N1.85 billion in 2012 compared with N1.25 billion in 2011. On this, each ordinary share carried a loss of N1.71 in 2012 as against N1.15 in 2011. With this, shareholders’ funds dropped by N1.93 billion from N6.61 billion to N4.68 billion. This implied reduction in net assets per share from N6.10 to N4.32. The company struggled with a negative working capital of N1.10 billion in 2012 as against N1.02 billion in 2011.

    The latest report, though worse, followed similar fundamental pattern since 2008. For numerous shareholders that had bought into the company’s message of restructuring and turnaround in 2007, it’s not only the recent losses that count but the unyielding depreciation that has taken over a company which they bought into its corporate message of turnaround and public offer at N13 per share.

    With the emergence of Shoreline Energy International Limited as the new core investor in Costain, the company had floated a combined rights and public offer in December 2007 to raise N8.04 billion. Nearly three-quarters of the shares were offered to pre-qualified existing shareholders under the rights issue at a discount of N11 per share. New investors paid N13 per share to buy into the public offer. As the application lists closed, investors had watched eagerly as their share price hit a high of N26.55 per share by the end of January 2008. But between 2008 and now, shareholders have lost on both counts.