By Jude Njoku
* It will scare away potential investors —Experts
* Govt gets plaudits from road users…
“Good afternoon; thanks for your enquiry. LCC has no comment at this time. Should we consider it necessary, we will issue a public statement in due course. Regards”. That was how Mr. Charles Imevbore, who heads the Communications and Commercial department of Lekki Concession Company, LCC, responded through a text message, to our enquiry on why the 30-year concession the company had with the Lagos State Government to upgrade, expand and maintain the 49.63 kilometer Eti-Osa-Lekki-Epe Expressway, was terminated.
Indications that something had gone wrong with the concession emerged in January this year when the Lagos State Government stopped LCC’s planned commencement of tolling at Conservation Toll Plaza, located after the Chevron Roundabout on the ever-busy expressway.
The death knell finally sound last week, when amidst a flurry of complaints of high tolls and long queues at the Admiralty Toll Plaza, the Lagos State Government announced the termination of the concession agreement. The termination came seven years after the commencement of the 30-year agreement between the state government and LCC, for the upgrade, expansion and maintenance of the road estimated to gulp N50 billion.
Commissioner for Finance, Mr. Ayo Gbeleyi who was one of the brains behind the concession during his tenure as Special Adviser to the Government, said the termination became necessary to protect the common road users who were paying exorbitant fares.
His words: “As provided for in the concession agreement between the parties, the concessionaire, LCC, can increase the toll tariff based on the inflation rate in the country, among other things every quarter. The risk is that when an agreement was reached between two parties to negotiate on a contract, whatever the year, one cannot envisage the entire challenge that will arise later. The dynamics of the Lekki project did not envisage that there would be devaluation of the country’s currency, between 2008 and 2013 from N118 to N160. This impacted on their cost which they will attempt to pass to the common man on the street, because of the inflation adjustment.
“For instance, if the state government had not come up with this plan last July, the concessionaire would have increased the toll fee for cars from N120 to N144 while drivers of SUVs will have to part with N180 as against the N150 cost they are still enjoying. This is because the concessionaire would have added 20 percent. The government felt that this would be difficult to push to the residents at this time. And of course, at every anniversary, it was meant to go up by the inflation rate plus five percent. And we should not forget that this is the first Public Private Partnership, PPP, agreement reached by the state government.”
While the termination has received plaudits from aggrieved road users, built environment experts who spoke to Vanguard Homes & Property weekend, posit that the termination would send a scary signal to foreign and local investors, that investments in Nigeria are not safe.
A Lagos-based Civil Engineer, Mr. Afolabi Adedeji explained that the revocation, coming on the heels of the revocation of the concession granted to Bi-courtney to construct the Lagos -Ibadan, would send a dangerous signal to investors that Nigeria is not a place to invest in.
“If the LCC people have been ‘dropped’ at this time, so closely on the heels of what the Bi-courtney Consortium is experiencing with the Federal Airports Authority of Nigeria, FAAN, (apart from the Lagos -Ibadan Expressway), it will send obvious scaring signal to investors. We have lost yet another opportunity to test how a model of public private partnership, PPP, will work in our favour in Nigeria,” he said.
Recalling the hiccups encountered in getting private investors for the 2nd Niger Bridge at Onitsha, Adedeji warned: “We should be very careful; these terminations are getting too frequent. If we are not careful, we will make Nigeria a no-go area who foreign and local investors who would have borrowed money from banks with the aim of making some profits.”
Recalling a statement credited to the Osun State Governor, Ogbeni Rauf Aregbesola when he was the Commissioner for Works and Infrastructure in Lagos State that the state requires N40 billion annually to maintain its roads network, Adedeji insisted that “there is no free launch any where” hence people should be prepared to pay for driving on good roads.
Adedeji who claimed that Lekki residents are not poor, however pointed out that they (residents) are asking for social justice and a system that makes payment of tolls less cumbersome.
The new Chairman of the Lagos State branch of the Nigerian Institution of Estate Surveyors and Valuers, NIESV, Pastor Steven Jagun, aligned with the sentiments expressed by Engr. Adedeji.
He called for transparency in the handling of government business. According to Jagun, if transparency was maintained from onset, there would be no reason to terminate contracts/concessions when they have been signed. He posited that the termination of the concession on the Eti-Osa- Lekki-Epe expressway, could “make investors to be wary.”