Why the Gateway Hotel Concession Was in Ogun State’s Interest
- Ibiyemi Comfort Pamilerin (ICP)
The debate surrounding the former Gateway Hotel in Abeokuta, now associated with the Park Inn hotel brand and the Adebutu family, calls for a more informed understanding of the economic rationale behind public-private partnerships and concession agreements.
Rather than reducing the discussion to political sentiments, the fundamental question should be: What arrangement best serves the economic interests of Ogun State and its people?
The Gateway Hotels were established as public assets, but reports indicate that they struggled financially under government management. According to a 2021 report by The Punch, the three hotels were concessioned to private investors for 25 years during the administration of former Governor Otunba Gbenga Daniel, partly because they were reportedly being operated at a loss and this is to establish a fact that the hotels were not sold.
The economic logic behind such an arrangement is straightforward. When government-owned enterprises become financially burdensome, a properly structured concession can attract private capital, introduce professional management, improve infrastructure, create employment and potentially generate revenue for the government without requiring it to continually finance daily operations which exactly what the Adebutu family has done using Park In to achieve.
Workers employed are people of Ogun State origin and pay tax to the coffers of the government.
THE INTEREST OF OGUN STATE MUST COME FIRST
It was in the interest of Ogun State to consider concessioning the former Gateway Hotel to investors capable of injecting the resources required to restore and operate the facility. The reported involvement of the Adebutu family in the Abeokuta hotel’s transformation illustrates the potential role of private investment in revitalising public assets and a pointer to what Ladi Adetubutu can offer in turning around the fortune of Ogun State using his link and private partnership to drive development in the state.
In December 2015, The Guardian reported that the former Gateway Hotel had been transformed into Park Inn by Radisson following an investment reportedly valued at ₦4 billion in the hospitality sector.
This is precisely why concession agreements should be assessed against their financial terms, investment commitments, operational outcomes and benefits to the public.
The government does not necessarily have to own and directly operate every commercial enterprise to benefit from it. A well negotiated concession can allow the private investor to bear operational responsibilities and investment risks while the state receives agreed payments and other economic benefits which is what has happened with park In hotel.
WHERE IS THE EVIDENCE OF THE STATE’S RETURNS?
The administration of Governor Dapo Abiodun should be able to explain, with verifiable financial records, what Ogun State has received or continues to receive under the relevant concession arrangements.
This is not an allegation that the state receives nothing. Rather, it is a legitimate question of public accountability: What are the contractual obligations, what payments have been made, what investments have been delivered, and what benefits have accrued to the state?
In a 2021 account defending the concession policy, a former official of the Daniel administration stated that the arrangements included signature bonuses and annual returns tied to hotel turnover. Those figures and the continuing performance of the agreements should be made public and verified.
If the concession was designed to relieve government of operational costs while attracting investment and generating revenue, the public deserves a transparent account of how those objectives have been achieved instead of the APC trying to paint the contribution of the Adebutu to the financial growth of Ogun State.
CONCESSIONS ARE NOT THE SAME AS ABANDONING PUBLIC INTEREST
The important question is not simply whether an asset remains in government ownership. It is whether the chosen arrangement delivers value for money, protects public interests and produces measurable economic benefits.
Ogun State government should instead tell the people of Ogun what the Adebutu has contributed to the coffers of the State through the Park In Hotel.
LET THE ECONOMICS SPEAK
The Gateway Hotel debate should not be driven by political expediency or the assumption that private participation in a public asset is automatically detrimental to the state.
If a concession allows a previously struggling facility to attract substantial investment, improve its operations and contribute to economic activity, those outcomes deserve serious commendation that is what the Adebutu family should get and not the bashing from the bereft APC and it government.
Governor Dapo Abiodun’s administration and relevant state agencies should provide clear information on the status and financial performance of the concession arrangements so that Ogun electorate can take position.