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Two main built environment professional groups, engineers and estate surveyors and valuers, have in the past few months been embroiled in a professional battle over who has the right and professional competencies to undertake the valuation of plants and machinery.
Whereas close watchers of this battle dismiss it as an unnecessary distraction, the professionals involved say the raging argument is worth the time being invested in it because, according to them, depending on how it turns out, it could disenfranchise a whole professional from their rightful job of being plant and machinery valuers.
“What is at stake is who has the right to value items of plant and machinery. It is not a function of naira and kobo alone. It’s a function of which professional is trained to undertake the valuation of these items,” Chudi Ubosi, an estate surveyor and valuer, explained to BusinessDay.
Gbenga Olaniyan, CEO, Estate Links – a firm of estate surveyors and valuers, agrees, pointing out however that the bickering had a lot to do with professional fees, which translate into naira and kobo.
“Plant and machinery valuation is a big job; it is such that the smallest plant and machinery valuation job is bigger than the biggest property valuation job,” he explained, adding, “whereas engineers know about the integrity and condition of plants and machinery, estate surveyors and valuers are the ones who know the value or the market price of these items.”
Paul Osaji, also an estate surveyor and valuer, takes it further, saying that the quest by engineers to attempt to delve into valuation of plants and machinery and other assets thereby creating confusion and misrepresentation of facts in order to become what they are not is disturbing and misleading.
“It is important that we differentiate between plant and equipment valuation and engineering assessment. The former is simply ascertaining value in exchange while the latter is ascertaining the integrity and workability of an asset. From the foregoing, engineering assessment falls within the purview of engineers whilst valuation of assets, in all its ramifications, falls within the domain of estate surveyors and valuers,” he explained.
Osaji drew attention to the international valuation standards such as International Public Sector Accounting Standards (IPSAS), International Financial Reporting Standards (IFRS), International Valuation Standards (IVS), saying there was nowhere where in any of these standards engineers were mentioned as valuers to conduct valuation for any purpose.
“We are aware that, in valuation, we require inputs from legal, marketing, engineering (all aspects), finance and accounting, auctioneering and other fields of endeavour, but collecting of data from professionals in these fields does not mean they are valuers,” he emphasised.
But the engineers insist that estate surveyors and valuers are more concerned about the issue of buildings and estates, not with the details of plant, machinery, and equipment. They are of the view that estate surveyors and valuers don’t have the technical know-how to value assets that are purely engineering related.
“If the client asks technical questions as to what differentiates the value of one type of machinery from another, can an estate surveyor truly stand up to answer those questions without the expertise of the design engineer?” argued Femi Akintunde, GMD, Alpha Mead Group.
Akintunde was of the view that the built environment professionals needed to rise to identify key areas where they could add real value to the economy, adding that professional bodies should help their members to build capacity and channel their energy more towards their areas of core competencies and where they could best add value to the economy.
In Nigeria’s present economic woes, professionals should be debating how to move the country’s GDP up by producing more than the country consumes, exporting more than is imported, diversifying the economic base of the country, increasing the value of the naira, and improving the general living standards of our people.
“Let’s find better ways as individuals and professional bodies to add value and work better together to move the nation forward. Some of these issues that we expend unnecessary energy on are petty and laughable; we should stop it and get our house in order”, Akintunde advised
He recalled that failure to deliver credible and professional valuation of assets in the past misled financial institutions like banks, insurance companies, pension funds, and investors to take wrong investment decisions that have put a lot of money at risk and destroyed enterprise value.