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Breach Of Contract: Legal Tussle To Begin As Crystal Group's 7-day Ultimatum To Kwara Govt Elapses

A legal tussle is imminent between Crystal Group of Companies and the Kwara State Government following the government's refusal to rectify its breach of contract on the Kwara Hotels' renovation contract award.

In a letter dated 28th December 2023, which was received by the Kwara State Government on 2nd January 2024, the Counsel to Crystal Group of Companies, GMO Legal, issued a 7-day ultimatum to the Kwara State Government to cancel the purported contract awarded to Craneburg Construction Company for the remodelling and rehabilitation of Kwara Hotels Limited or face legal action.

It will be recalled that 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.

It added, "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 of the Kwara State Government to award the contract for the Remodelling and Rehabilitation of Kwara Hotels to Craneburg for a whooping N17.8 billion as against the N3 billion concession agreement with Crystal Group of Companies has generated debates amongst Kwarans. 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.

The coming days promise to be intriguing as unfolding events will determine the future of Kwara Hotels which was until recently, the hub of hospitality in North Central, Nigeria.

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