June 23, 2009

Lagos infrastructure upgrade: LCC targets 2011 completion deadline

By Jude Njoku

AGAINSTthe backdrop of worsening road infrastructure in Lagos State and the fact that the level of funding required to provide or maintain the existing ones far exceeds the budgetary and resource capacity of the State, the government in 2004 enacted the Lagos State “Roads Law”.

The legislation  established the enabling framework for the Lagos Infrastructure Project. Under the project, the State government opted to collaborate with the private sector to provide functional infrastructure particularly in the Victoria Island and Lekki corridor.

Messrs Lekki Concession Company Limited (LCC)  got a 30-year nod to provide high quality road infrastructure and related services along the Lekki Peninsula. Last week, the company pledged to complete the ongoing construction work along the axis before the end of 2011.

Managing Director of the company, Mr. Opuiyo Oforiokuma who addressed a media forum in Lagos explained that this pioneering project which is expected to gulp N50 billion as against the rumoured N300 billion, is the first of its kind in Nigeria and will be executed in phases.

Traffic light base installation along Lekki road.

Traffic light base installation along Lekki road.

“The Lekki Toll Road Concession Agreement, which underpins the “Lagos Infrastructure Project”, will include upgrading and creating new road infrastructure along the first 49.4km of the Lekki-Epe Expressway (Phase I).  Furthermore, additional private sector finance will be deployed towards developing the first 20km of the Coastal Road with an option to do the Southern Bypass as well (Phase II).

In keeping with the already globally established BOT (Build, Operate and Transfer) model of infrastructure delivery, the Concessionaire will be required to operate and maintain the road for the full 30-year term of the Concession, and then to hand over the assets to Lagos State in good condition at the end of the Concession term.

In this way, not only will Lagos  State enjoy new World Class infrastructure as a direct consequence of this Agreement, users of the road will also positively experience the service-based approach that will be adopted by the Concessionaire to deliver the benefits at affordable prices,” he said.

Explaining that the roads will be tolled, the LCC boss offered reasons why this measure has become necessary while debunking claims that users would be charged outrageous fees. “Major infrastructure projects like the Lagos Infrastructure Project require large amounts of capital. Whether such capital comes from the public or private sector, it is normal for end users to make a contribution either directly or indirectly, to meeting the costs of the project. In the case of public-funded capital, for example, end users may pay indirectly through Income Tax or other statutory deductions.

A more direct form of charging, however, would be through the levy of Tolls, for which there are many precedents worldwide, including in Lagos, for both public and private sector funded infrastructure projects. Tolls enable the investors to recoup the costs of the infrastructure investment, service the costs of finance and operation, and make a reasonable return, he said.

In setting the level of tolls to charge, Mr Oforiokuma said “key considerations will typically include affordability, service levels, incentives/discounts, and regulatory constraints. This way, the toll-setting process should ensure value for money to road users and the delivery of consistently good standards of service. The tolls, according to him will be a mixture of prepaid, electronic and cash which he noted is not the most effective way of payment.

Construction work in Lagos

Construction work in Lagos

He assured those who do not want to use the tolled roads that alternative roads would be provided for them. Although they may not be as smooth as the ones that are tolled, he gave the indication that they won’t be clumsy.

Stressing the need to expand the road from the present four lanes to six lanes, Mr Oforiokuma explained that it would eliminate the near total gridlock along the area while making journeys faster and shorter. Also the wear and tear on vehicles due to the bad state of the road and the quantity of fuel consumed would be reduced.

“The safety/security of users of the road will improve because, apart from the law enforcement officers who will patrol the area, there would be better street lighting and reduced risk of “go-slow” robbery.

Other key benefits for the area according to Oforiokuma include creation of employment, support for continued and new business growth, and the underpinning of real estate values. “All of these benefits should have important positive impacts on economic growth in the area and for Lagos State as a whole, he opined.