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Ayo Alonge, [email protected]
Ranging from corruption, infrastructural decay to funding, the challenges facing Small and Medium-scale Enterprises (SMEs), in Nigeria can be very enormous, Adefemi Kamaldeen, the Managing Director/Chief Executive Officer of Periscope Engineering Limited, has said.
In this interview, Kamaldeen, who heads a construction company handling major projects in Lagos and beyond, takes a look at the business of construction particularly road project funding and execution. He also explains what competition looks like, while calling on government to intervene in growing small businesses.
Background
We are a consulting and a construction company. We are trying to create our own niche in the construction world. We, basically, get contracts from the Lagos State government and we have well informed and well practised engineers that manage our projects for us.
Business knowledge
The word “civil” is from the one “civilisation’. You cannot talk of Civil Engineering without talking of water, agriculture, road, soil, environment. It cuts across all walks of life. If we have good roads, portable water, sound telecoms sector and the fast, there wouldn’t have been any recession. Any reasonable government would pump money into infrastructure, if you are looking for real development. Nigeria is rated as the fastest urbanising country in Sub-sahara. The urban area people are rushing into is not even well developed. When you think anything, you think Civil Engineering and let me just say that Civil Engineering is life.
Challenges
It is the same kind of challenge anyone would face while trying to set up a company in Nigeria. Number one, in getting construction contracts, you need to know the who is who of the society. The challenges are enormous. We are registered with the Nigerian society of Civil Engineers. I am a duly certified practitioner with my Masters.
With that, I can say I am fully grounded in Civil Engineering, but it is not just about the certification and professionalism. In Nigeria, it is about the links. We have a couple of big projects in Lagos State and these are projects that speak for themselves in terms of quality and time delivery. If the likes of Julius Berger would get a loan, they can easily get that at a single digit interest rate because they might be sourcing it from abroad. Getting the needed equipment is also a huge challenge and you may have to hire some which are very expensive to acquire.
Hiring is also very difficult. The personnel are there and well trained. Year in, year out, the University of Lagos calls me to conscript some students from the Department of Civil Engineering and train them. I am an alumnus of Unilag you know. I consult for one of the major banks in Nigeria. You find out that some of the key people that eventually get the contracts are not even engineers. They are just into the industry simply because they have the money or so. When you try to submit your proposals to compete with these people, you find out that it becomes pretty difficult. It may even turn out to be that the contract would now be awarded to a non-professional who is just there for his profit margin. Whether we like it or not, we can’t shy away from the truth. Some of the projects you see out there are not even given to professionals. Some even go to politicians who would now call on professionals to help them execute the project.
Managing competition
There is the belief that local contractors cannot perform as good as international contractors. That is something I try to prove that wrong. It is about standing for integrity. When we built for Lagos Homes, our buildings were adjudged as one of the best and I must tell you, I know of some contractors who didn’t do a very good job. We were also one of the first that met Governor Ambode’s deadline. One key thing for us is timely delivery of projects and two is delivering up to standards to match with international best practices.
Projects execution
The projects we got from Lagos State Government came from Lagos State Development and Property Corporation (LSDPC). I served there as a corp member and when I was with them, I personally developed two projects for them. A major scheme was to be constructed in Ikorodu and Badagry and I designed it for them. So, they have always known that I know about the job. We started with consulting and later started getting projects from some private organisations.
Our first contract in Lagos was from former governor, Babatunde Raji Fashola. We were one of the contractors that built Lagos Homes and we completed it even before the deadline. The one we did at Shogunro was rated as one of the best. Once you are able to throw in your profile of the works you have done, you are okay. On the anomaly of some road contractors getting the mobilisation fee but put in a substandard job where the road soon begins to get bad again, I won’t lay the blame solely on the contractors’ doorsteps. A lot of intrigues go behind before the jobs go out.
People behind closed doors keep telling you to give out something before the contract is issued to you. And the contractors wouldn’t want to go back home without anything. So, the project may then suffer. It is all about corruption and without it, local contractors would deliver. Some of them would say that local contractors cannot deliver the jobs but when the contractor finally gets it, you still want to get your cut from it. Contractors should be able to stand their grounds and get to say that their integrity is at stake too. You cannot deliver well, if such is involved.
Funding and mobilisation
We specially have Lagos State Government, LSDPC, Total Nigeria, as our major clients. For every project, our clients mobilise us with at least 30 percent. I have never got any project from Lagos State without getting 30 percent mobilisation fee. During evaluation, when they see you have even executed the job beyond the 30 percent mobilisation fee, they would definitely pay you, except when you default.
We have never had a course to approach any bank to ask for a loan to execute any project. We have never had such cost. Our clientele base is defined and all of our clients would always mobilise you. As long as you can establish the fact that after the mobilisation fee, the contractor still defaults, you should punish such contractor by blacklisting him and making him refund the money. It is not just enough taking back the project from the contractor.
Infrastructural development
I think the present government is moving in the right direction but a lot still needs to be done. We need to start pumping money in infrastructure. This is the first time that we would be putting more money into capital expenditure. If you are not putting more money in capital expenditure, then you are not looking at the area of development. I ply Benin/Ore Road and i can tell you some of the projects the present government has embarked on. If you have to revolutionalise Nigeria, you must be looking at infrastructure. What we should be looking at is whether the project is meant to serve the people or not.
A major cause of this is corruption, because they would be thinking of getting their cut from an existing project. Tinubu started the paper works on BRT transport and Fashola came to finish it. That is the right step in the right direction. Jonathan started the railroad and Buhari completed and commissioned it. Contractors have been mobilised to go back to site on the Lagos/Ibadan expressway. Also, on Oyo/Ogbomoso road, too, contractors are back on site.
