….Speaks on the N100bn bond to bring decent 5,000 buses to ‘mega-city’
….The mono-rail, Blue Line, Red Line, Fourth Mainland Bridge to come’
By Jide Ajani
Governor Akinwumi, Ambode, in a session with some editors, last week, spoke on his dream for a new Lagos State. Excerpts:
The Bus Reform Initiative of your administration looks quite ambitious. What is the cost implication and how do you intend to finance it?
Generally, for Lagos to thrive, you need an effective integrated public transportation management system. It is very clear that one of the things that this government has decided to take on is that whenever we want to deal with any issue, we want to accept first that there are deficiencies. It is only when we know the deficiencies that we start to process how to find solution.
So, one of the things you see in Lagos is that connectivity is a major challenge. We have almost 23 million people in the state out of which 11 million move at every point in time while about six million do it by walking. So, the concept there is that you want to find something that can move ordinary Lagosians from one point to the other so that productivity can increase. Having said that, road transportation is not the only means of moving people, but with the way Lagos is designed presently, road transportation is dominant.
And we have these buses that do not work efficiently and government, on its part, has not been able to provide efficient alternative. So, should we continue with this private ownership of buses under which you have these yellow buses, also known as Danfo, since the time of Governor Lateef Jakande over 30 years ago? So, we decided that whatever solution that we want to give, we must also provide a comfortable means of moving people and allows the middle class and majority of people to leave their cars at home.
The whole idea is that if we say Lagos is going to be globally competitive, we must change the way we move around. Now, we have 30,000 of these yellow buses in the city and each of them crams about 12 people inside it. And so, we decided to allow the buses to go and the bus reform initiative is a three-year plan that begins in 2017 and ends in 2019 under which we will bring in new buses of 5,000 units.
Each of the big buses will carry 70 people while the medium will carry 30. We believe that the middle range buses will take about 70 per cent of the total volume which will amount to about 3,600 units. So, how are we going to fund it? To start with, public transportation is not a profitable business and you are not likely to see major investors in it and so we decided to use our own vehicle, the LAGBUS, which is a private company to drive a public transportation infrastructure bond.
That bond is coming to the capital market in which every Lagosian should be interested in buying into it and we believe the N100billion bond that takes seven to ten years to mature can take care of the structure that we have put in place. We are working on the financial template and this is the breakdown – government has a sinking fund of N14.5bn that we want to put into this bond. You are aware that the Federal Government paid the refund of the Paris Club loan last December. We have decided not to touch our own share of the refund.
And we believe that the second batch of the refund should be paid next month to push the total refund to N29billion that we will have. I will add another N1billion to make it N30billion to kick start this initiative. By the time we have N30bn to drive the bus initiative against the bond of N100billion that we want to put into the market, there will be that credibility that the bond will drive itself. The second level of the initiative is that we intend to give out franchise to people and the franchise is going to come in multiple of 50 buses each, 100 buses, 200 buses and so on. So, if you have that franchise, you are going to give us a down payment of 25 per cent for the buses.
With the sinking fund, our exposure as a government is technically 75 per cent. So, from the kind of machinery we want to use to run the buses, there are no cash takings, everything is automated and, obviously, who ever has a franchise, whoever drives, takes part of the money while part of the intake also goes to the repayment of the facility and so it is a comprehensive template. Then you have a human angle to the project.
Akin Ambode cannot drive the buses. A medium sized bus that we are providing replaces two yellow buses and it is from the community of the drivers that own the Danfos that we have to absorb into this new culture; they have to be the new drivers. The National Union of Road Transport Workers (NURTW), the Road Transport Employers Association of Nigeria (RTEAN) are the ones invited to own the buses. Government is just providing the infrastructure because they cannot buy these new buses by bringing one hundred per cent cash and so government needs to stand up for them.
So, we are encouraging the manufacturers to continue to provide the buses, put an assembly plant in Lagos, do maintenance facility for us, produce spare parts in Lagos and then we create more employment. This is just a paradigm shift whereby the yellow buses drivers move from being addressed as Danfo drivers to being addressed as professional drivers. Ultimately, we will buy back the Danfos from them and what is realised becomes the seed money to become eventual owners of those buses in the years the facility is spread. We intend to start by going to the bus parks to educate people and the integral part of these buses is what you see us trying to provide bus terminals, laybys, bus stops.
The bus reform initiative seems very good and it shows there is a clear vision on your part. But is it not also good to have road infrastructures in place for people to get to the bus terminals?
Good. But look at it from my own prism. I am doing things that are quietly taking place but you are not seeing them yet. On your way to the local airport immediately after the post office, look to your right, what you see in that picture as Ikeja Terminal is under construction to be delivered by May. What you see happening in Oshodi is iconic transport interchange to be delivered by December.
When you go to Abule- Egba, just before the flyover, there is a BRT construction going to Oshodi to meet that terminal. We have already awarded contract for the Mile 2 Depot. In Yaba, just beside the Presbyterian Church where we wanted to do the metroline, you have another depot there. The same kind of structure you see in Tafawa Balewa Square (TBS) today is coming up in Yaba. We have awarded the contract. In Anthony, which is supposed to be a terminal after Ojota, another depot is coming there. So, what I am saying technically is that you cannot have one hundred per cent infrastructure to allow your vision to be driven but they come in pieces. You also see that we did 114 inner roads last year. This year, we will deliver 118 inner roads.
There are 5,000 roads inside Lagos but we have to create the infrastructures that allow our people to understand that there is a new culture without trying to do it like a switch and that is why we are saying it is a three-year plan and so we put Lagos into clusters of seven zones. My first set of buses that will prohibit Danfo will operate in Ikeja axis to be followed by the CMS-Ajah axis. We are already winning on the Ikorodu Road axis and the number of middle class people that are leaving their vehicles at home has multiplied and so all I need to do is just to take the cluster of Ikeja, the cluster of CMS down to Ajah, increase the number of buses on Ikorodu Road.
If that is okay for year one, we are fine. Remember we say three years and, in those three years also, we would accelerate infrastructures. I am sure many are like me, anytime I see those yellow buses, the first thing that comes to my mind is, are we really a mega city? Yes, maybe by population but in terms of the connectivity, we cannot rely on Danfos and claim we are a mega city.
In realizing this new culture, there are displacements and victims are saying you are not paying compensation. Moving forward, how do you intend to address this?
My politics is about the people and I understand it very well. If there is any administration that has been really humanitarian, I can pride myself to be one. There is nowhere I have ever gone on demolition in overriding public interest that I don’t try to compensate them even in areas without legal standing. As much as I want to regenerate Oshodi to be a fantastic place, I have paid almost N700million to the traders and people there and they don’t have legal occupancy. The land belongs to Lagos State and if I were to stay on legal standing, I should not pay anybody but again I have said I want to serve the people. I made up my mind that instead of dislocating them, I can re-arrange their mode of business and so I paid some of them like one year rent. You can go and check.
To be specific in Abule Egba, we have had to demolish houses and we are in the process of compensating them. But so many of them don’t really have papers but I have made up my mind that I would still compensate them anyway. Yes, we have brought development, we are going to improve on the economy in the area but I should not punish them unnecessarily. So, as we speak, we are in the process of paying them. Let them just be patient. But in every other place I have gone, we ensure that we give them something.
The same thing is happening in Ojodu-Berger. I have had to buy back the petrol station to allow the pedestrian bridge to drop there and I had to pay the person that owns it. I paid the market and just to allow that pedestrian bridge to drop, I have paid about N150million in that place. But you know what, they also don’t have papers and that is a reflection of the kind of government I am running.
Has your government given up on enforcement because you now find motorists especially Okada riders breaking traffic rules at will?
The day government reneges on enforcing law and order, then there is no government and so we will never renege. The truth is this, in the whole reform process, the idea of even driving tricycle or Okada should not be tolerated. But here we have a law that says there is a place where you should not be. We have decided to sometimes relax on our enforcement maybe for some reasons. But you find out that, sometimes, we enforce the law aggressively. For instance, in the last few weeks, we have been very aggressive in enforcing the Okada ban in Ikoyi, Victoria Island and Lekki and this is because the recklessness of the Okada riders is becoming intolerable.
And just imagine that, because people want to feed or because some NGOs or activists will come out and say, ‘why are you making people not to have a living under an economy in recession’, it appears that government is relaxed and, when it becomes totally intolerable, we are out there. But then the most critical part of this is the security challenge. It is not about people getting employed. I mean who goes to school to learn how to ride Okada? Okada issue is a product of unemployment. Nobody wants a graduate to ride Okada and this is because there is no platform for them to be suitably employed. So, what we should do as government is to go one hundred per cent headlong on each and every one of them.
But inside this bus reform, you will never have schedule one or schedule two, we are banning Okada forever. The whole idea of having Okada or tricycle in some routes is not tolerable for a competitive city and I like people to accept that we are not isolated from the rest of the world. What makes me not to spend my money in Dubai and come and spend it in Lagos is the aesthetics of the city. Lagos is not only for those of us that are living here but also those who bring in investments to come in and to also enjoy their stay.
So, if we are going to be globally competitive, we must take decisions that drive competitiveness. The city does not want Okada and the question is, can the city provide alternative for them, and that is what we are doing as a government. We have created the Employment Trust Fund, we have created drivers that can drive modern buses. You know the interplay of politics and enforcement are emotional and we try as much as possible to balance but with more emphasis on enforcement.
But the indiscipline on Lagos roads these days has gone bad even from private car owners. You even see people parking by the road to go to the market and LASTMA officers seem to be doing nothing about it which eventually creates a lot of traffic and slows down movement. Ladipo market is a good example where traders have blocked part of the road. What are you doing about this?
I do agree that there is a lot of indiscipline on Lagos roads but what I know is that we have had major improvement on our highways. There used to be a time that people drive one way on Third Mainland Bridge but that era is gone forever. Now, we are concentrating efforts in trying to recruit more law enforcement officers for the system.
There have been so much talk about the bus reform but what about the other modes of transportation like water transportation, mono-rail, the Fourth Mainland Bridge? What is slowing down these gargantuan projects?
At the inception of this administration, we said we must have an effective integrated transportation system to allow the city to move well. We have commenced the channelization of our waterways. We have actually identified 31 routes for water transportation. One fifth of Lagos is water and there is nothing going on, on the water. We have given out concession to about four private companies to develop our jetties and drive some of the routes. But again, they cannot bring their boat or ferries if we don’t create that road path on water which is the dredging and channelization which just commenced.
This is also part of the public transportation infrastructure bond that we are trying to do. We have given concession out for Mile 2 and Badore. We have ordered for ferries to be able to drive the initiatives because we must lead by example. Before the year runs out, people will see a lot of activities on our waterways. On the rail system, I once said I would deliver by December 2016 but we are all living witnesses to the foreign exchange challenge that we have in the system.
The challenge affects public expenditure and public contracts and that is a major limiting factor to deliver. But beyond that, I cannot say precisely when the Blue Rail Line from Mile 2 to CMS will start operating. But, we are in the process of issuing out concession for the Red Line that takes you from Ijoko to CMS. So, we are dealing with issues of rail, water, road and, by the way, air. Lagos deserves three airports. The Ikeja airport cannot even take big facilities and so we have in our concession the Epe airport and then Lekki airport.
Smart City Lagos is embedded inside the Epe airport, while the other part is the fact that the Apapa port cannot do the real business of what the Nigerian commercial industry is right now. It is not deep enough to take the kind of ship that will bring the kind of goods we need and that is why we ventured into the Badagry Deep Sea Port project and the Lekki Free Trade Zone project. Like I said, the private sector is also driven by capital. While government is suffering from capital inflow, some of those projects are delayed but they are in place and there is a master plan to integrate modes of transportation to develop and fuse into one. We are also developing a lot of walkways on our road construction. More people walk around than the people driving cars and so we are also creating that path for them properly. You can also walk easily at night courtesy of our Light Up Lagos project.
Just recently, in fulfillment of your electioneering promise, you presented cheques to the beneficiaries of the N25billion Employment Trust Fund (ETF). How is it going in terms of its impact on entrepreneurs?
I can beat my chest to say the ETF has lived up to its billing. As we speak, over a billion Naira has been released to over 2,000 people and the whole idea is to create a vehicle that allows one person to employ five people. That is what I want and that has allowed us to bring more small scale entrepreneurs into the larger fold.
Don’t forget also that the framework to drive service never existed and if you are going to create avenue for people to get N200,000, 500,000, N5million, you need to create the framework or else the project will collapse and everybody will run away with the money.
So, that framework was what we have been working on in the last six to seven months and then disbursement started in January and then they have been doing it monthly. More importantly is the medium scale entrepreneurs and the businessmen who don’t really do cheque presentation but the whole idea is this; if your business is employing ten people, I should be able to facilitate it in such a way that you employ another twenty and then create a platform that allows the money to come back for other people and it has been working.
The selection process has been devoid of bias. You don’t have to know me to apply and the feedback has been good. Like it has been said, it is a N25billion investment that we are doing it for four years, but so far, we have only given out N7billion. I have to see that the money is moving out before I put more.
What is the Cleaner Lagos Initiative (CLI) all about?
I am a dreamer and I want the people to dream along with me. This is like a vision. I have been given the opportunity to process something and improve on it. That is the singular opportunity that this office bestows on me and I don’t want to misuse it. I have lived in this city for over 50 years. What I see is wrong I don’t like it and I want to change it. I don’t like yellow buses, is it possible for me to change it?
The answer is yes. I enter Lagos from Ibadan and the first thing I see on the right side is a dump site. Should I sit down and continue to watch? The answer is no. The city is very dirty. It is not healthy and our total well-being is defined by our health status and our productivity but the health status has been diminished by the state of what we have. Now, the first identification of this dream is that government must provide the infrastructure to make the city clean. Secondly, do I have the resources to keep a clean city?
I don’t but how do I get the resources? Should I tax my people to death? The answer is no. Under the prevailing condition when the country is in a recession, can I go and meet them to say ‘pay me more to collect refuse?’ The answer is no. What then do we have as a government? We have about 150 rickety compactors and the private sector participants also have some compactors.
We added everything together and mapped Lagos and findings showed that what we have is not enough. So, when what we have is not enough, people start to put refuse in the drains and, at the end of the day, government spends more public expenditure to clear the drains, spends more money to give free drugs in the hospitals to children and all that. So, government now thought of going frontally to face the issue of refuse to reduce public expenditure in those other sectors, and the first step was a review of the laws to make them investor-friendly so as to allow Public Private Partnership in the business of collecting refuse not only in Ikoyi but also in Ayobo.
So, we have consolidated all our environmental laws and I also told myself that it is not by making people to sit down at home three hours once a month that would make the city clean. That is not competitive. They don’t do that in New York and so, we accepted that punishing people to stay at home for three hours in the name of sanitation would not clean the city. What this new law is trying to achieve is that we can invite private sector investment in the collection of refuse.
What you have in Igando and Olusosun are not landfill sites, they are dump sites. Land-fill sites are clinically engineered and treated but what you have in Olusosun and Igando are bombs waiting to explode and we cannot allow that to continue. So, the whole thing about the consortium is that can we divide refuse collection into different layers. The consortium coming will be collecting domestic refuse across the state. The existing PSP operators that really don’t have enough capital to carry out domestic refuse collection, we will make their business bankable and then push them to commercial refuse. So, they can go to the companies around and collect their money directly.
With that, the PSP operators will be able to employ more people and be bankable because they can go to bank to say they have clientele so and so companies, this is the total revenue they give them in a month and so ‘can you give us this amount to buy new equipment?’ In this new arrangement, all the people need to do is just pay your public utility levy which is once a year and your refuse is collected 24/7.
The template we are using is that in every ward, we will employ 100 street sweepers which translates to 27,500 people that will be kitted the same way all over the state. On our part, we will invest in equipment just like you see in London and say that we don’t want to ever see the streets dirty. And the design of the arrangement is this, the company is not paid except on the tonnage of the refuse collected and so it is in their best interest to collect more. So, it is a reform and when you have a reform, it comes with all forms of difficulties but the good thing is that we have started.
The consortium will also have to provide us with new landfill sites and people will also start seeing a lot of changes on the transfer loading stations that we have around. The ultimate goal is to increase the GDP of Lagos. When I have a healthy people, they are likely to be more productive and productivity is about services and goods. So, if there are more people working day and night, government will get more tax from them and that is where we are going.
Can we get insight into your vision of feeding Lagos? Your government invested a lot on the Lake Rice initiative but what is the rationale behind government selling rice?
Let me tell you where I am coming from so that you understand me. The Federal Government decided to ban importation of rice and this has always been in the hands of the private sector to the extent that, when they give you the license and you are just able to produce a particular percentage here, you are given license to import more and I don’t understand that kind of license but the truth is the Lake Rice intervention was about standing up for leadership in the interest of the people. If you are driving a policy and you cannot drive it by example, your policy will never work. It was a wake-up call. People will see more of the Lake Rice. We are going to have our own mill. I don’t want to be a rice seller but I can be a catalyst to drive a policy to be effective and immediately we made our pronouncement, the price of rice crashed. That is governance.
How far have you gone on education? Your government promised free meal for pupils of primary schools but nothing is happening in that direction.
If there is anything I have not done properly in the last 22 months, maybe it is the issue of A-Meal-A-Day. Yes, it was in our manifesto but in practical terms, we are still on it. The number of students in Lagos and the budgetary provision also do not really match for us to start. I don’t like a situation whereby we come out for two to three months and then stop. I like to sustain it when we start and don’t forget also that the project is a combination of resources from the federal in partnership with state governments. So, obviously, in terms of provisions and resources, we in Lagos think we should have a long drawn sustainable plan and that is why we have not started it. What I can assure the people is that we are working on it.
Lagos is surrounded by water but pipe borne water is a problem in the state. What is your government doing about it?
If there is any sector that we have actually not been too impactful, I would say it is the water sector. What Lagos requires right now is 700million gallons per day of water. But the capacity that Lagos has is 210million per day. So, there is a deficit of about 500million gallons per day.
But the investment in the water sector in the last 50 years is the result of the deficit we have now. But, what we have tried to do in the last 20 months is to see that even the ones that we say are our mini-water works and major water works should be working hundred per cent efficiently. In addition to that, we are doing a new major water works in Adiyan but the ultimate solution is the same thing that I have applied in other sectors which is to invite private sector participation in water solution.
Is it true that there is a plan to start to tax people for sinking of bore holes?
It is not true. If I have my way, I don’t even want people to dig bore holes anymore because the accumulation of those bore holes altogether put Lagos in danger. If we provide water, people don’t need to dig bore holes and that is why we want to accelerate private sector participation in the provision of water to solve that problem.
Still on schools, many of the infrastructures in public schools in the State are in dilapidated conditions. What are you doing to reverse this trend?
I did a study last year and it has to do with rehabilitation of schools and also provision of schools in the riverine areas. The result showed that we need about N60billion to put our schools together. But we started the massive rehabilitation of our schools last year and you can go round to confirm. We expended about N10billion trying to put the worst set of schools back in place. This year, a major intervention is also going to take place from our budget to see that the existing schools compete favourably with the private sector schools.
What are your plans for security surveillance on the waterways?
That is one area that we are focused on right now. We have improved on land and we have been able to secure the city properly but the issue of waterways, we are applying technology and I can tell you that we are investing heavily on our waterways.