Abia Seizes Hotel Over Lease Failure

The Abia State Government has executed a major retrieval of public property, formally revoking the Certificate of Occupancy and retaking possession of Abia Hotels, Umuahia, from the private firm, Investment Guarantee Limited. The decisive action brings an abrupt end to the company’s 25-year development lease agreement, which had been in effect since 2013.

The revocation was officially announced by the Chief Press Secretary to Governor Alex Otti, Ukoha Njoku Ukoha, in an early morning press statement on Sunday. The government justified its move by citing the company’s categorical failure to meet the crucial terms and conditions stipulated in the Development Lease Agreement signed with the State over a decade ago.

The core of the breach, as detailed by the government, lay in the private firm’s commitment to an ambitious upgrade that never materialized. The statement emphasized the contractual obligation: “In the development lease agreement, Investment Guarantee Limited committed to upgrade and redevelop the Hotel to a 3-Star Protea- Standard Hotel and manage it for 25 years but failed to upgrade and redevelop the Hotel to the agreed standards after 12 years.” This inability to transform the hotel into the promised modern, high-standard facility was deemed a fundamental and unacceptable failure in the eyes of the current administration.

Furthermore, the State government stated that the company was found to be in violation of other, unspecified terms and conditions within the original development lease agreement, suggesting a pattern of non-compliance beyond just the infrastructural upgrades. However, in moving to terminate the contract and reclaim the asset, the Abia government confirmed that it did not walk away without fulfilling its financial obligations. The government acknowledged that it paid compensation to Investment Guarantee Limited, clarifying that this payment was intended to cover the costs the firm had incurred during its 12-year tenure in the partial development and upkeep of the hotel complex. This compensated retrieval ensures a clean legal severance and signals the Otti administration’s firm stance on holding private entities accountable for contractual performance when managing vital public assets. The government is now expected to assess the property’s current condition and deliberate on a new strategy for the upgrade and management of the Abia Hotels, a strategic hospitality facility in the state capital.