The Special Adviser to the Governor of Lagos State on Public-Private Partnerships, Mr. Ope George, in this interview with Olasunkanmi Akoni speaks on the various ways the Office of PPPs is facilitating the development of public infrastructure and public assets to improve access to government services as well as unlocking the limitless opportunities in the state despite global harsh economic realities, insecurity in the country, stressing that making Lagos number one destination for all to thrive is mission that is possible. Excerpts:

Lagos State is believed to be a rich state; why does the state government resort to the use of public-private partnerships (PPPs) structure to finance infrastructure development?

There are many ways we look at it. First, there are numerous developmental programmes and projects which the Lagos State government wants to do as part of measures aimed at ensuring that residents of the state have access to better services from government. The state government is also passionate about improving the quality of life of the residents; therefore, there is an urgent need to upgrade existing infrastructure while the provision of new ones is also very compelling. But, given other numerous statutory obligations which the state government also must meet such as recurring expenditures, such as payment of its workers, running of offices, maintenance of basic social amenities like health, education, roads, security and law enforcement, judiciary among others, there is nowhere in the world where government can get the money to do everything. Everything cannot be put on the balance sheet. 

So, what we try to do is this: we look out for projects which we consider to be better and cheaper for the government if such projects are financed jointly with private sector investors. At that point we then go out, look for possible partners in the private sector that are willing to work with us. Another way we look at it is that, we can take a look at a particular project or certain projects and reason that such project or projects can be done better through private capital investors. So, depending on what we need and depending on the size, everything can’t be on the balance sheet. 

We also consider it important sometimes to tap the experience of private sector operators in delivering certain projects that are of complex nature. As we all know, Lagos State is known as the ‘Centre of Excellence.’ This is something we are very proud of. So, to get the best cost-benefit value for certain critical projects, we do seek partnership with the private sector investors to deliver on some projects especially in those areas that where the private sector people have superior expertise and skills to provide quality services. These are some of the ways the Lagos State government leverages PPPs structure to boost our capacity to deliver critical infrastructure that are germane to our socio-economic growth and development as a leading economy not only in Nigeria, but in Africa in general.  

Can you share examples of how PPPs structure has helped or is helping the state government to close the infrastructure gap in the state?

Lagos is arguably a reference point in the delivery of infrastructure projects in Nigeria through PPPs, and we are particularly excited at our modest testimonials in this regard. I am sure many people can recollect how the now rehabilitated and upgraded six-lane 49.4km Eti Osa/Lekki–Epe Expressway used to be back then. Today, that road is a testimonial and the first major example of how the public and private sectors can partner to deliver critical infrastructure. 

We have since gone farther than that. Presently, we are building the physical infrastructure for the Red and Blue Rail lines. The red line is from Agbado to Marina; it’s a 37km line. The blue line is from Okokomaiko to Marina, which is a 27km distance. The first phase of the blue rail will run from Marina to Mile 2, while the second phase will extend to Okokomaiko. Also, the first phase of the red rail will run from Oyingbo to Agbado, a boundary community in Ogun State, while the second phase will extend to Iddo. 

Through PPPs arrangements, construction of all the physical infrastructure such as station terminals, ticketing points, bridges, access roads and other infrastructure necessary for the smooth take-off of the rail services is currently ongoing.

When you look at it, I don’t know any federating state in any country in Africa that has invested in rail. Rail line is a national project in Africa because it is capital intensive. Lagos is a unique state because people often compare Lagos with countries like Kenya or cities like Cairo because of the size of our population and the size of our economy. Those are countries or capital cities they are comparing us with because Lagos is a megacity. 

So, for us in Lagos, considering our huge population, we know how important it is for us to cater for our people in terms of infrastructure needs, provide better roads, better hospitals, better schools, ferry services. But, of course, our PPP projects cut across all the various infrastructural services and that is what we are trying to provide for the residents in the state.

How is PPPs investment stimulating economic growth and human capital development in the state?

As I said earlier, PPPs investment cuts across various sectors. But sometimes people think of or just look at it in terms of roads infrastructure; it is more than that because there are other things to it. For instance, we have investors doing infrastructure projects in the education sector. For instance, we are currently constructing about 8,000 bed spaces at the Lagos State University (LASU), Ojo, to solve the accommodation problems faced by students of the institution. 

We have a medical park that we are planning to build at the old site of the former School of Nursing on Awolowo Road, Ikoyi. On completion, this will be a state-of-the-art centre of medical excellence providing comprehensive services and staffed with specialists in various fields of medicine to reduce medical tourism in Nigeria. This will be done through PPPs. 

We equally have the 5000-capacity Truck Park in Orile Iganmu, which construction is ongoing, and operations commencing and already yielding results in the gradual decongestion of Apapa traffic caused by trucks. There are other sectors that we are also looking at to improve the lives of Lagosians through PPPs as well.

In addition, you will find out that these projects create tens of direct and indirect jobs. If you consider the number of people that come into Lagos every day, those that live in Lagos and those from neighbouring states and towns who come to work at these project sites, you will find out that these projects have tremendous positive impact on the economy of individuals and Lagos State. Also, these projects help us develop our local capacity and human capital because the projects provide opportunity for our local engineers, professionals and artisans to put their skills and expertise to use. A lot of capital flights are being saved for the country as well. 

I am bold to say confidently that the provision of socio-economic infrastructure remains one of the key priorities of the development plan of Governor Babajide Sanwo-Olu under his thematic T.H.E.M.E.S’s  agenda. This is so because making Lagos the No. 1 destination for all to thrive is mission that is possible.

The protection of parties is very important in a PPP system; how does your office ensure the PPPs arrangements are well implemented and the interests of all parties are protected?

The processes involved in a PPPs system can be very complex. So, you don’t just go into any project and say you want to start the project. Many things are taken into consideration and they take a lot of time. At the Lagos State PPP Office, part of the due diligence we undertake is that studies are done. Don’t forget that most of these projects require huge capital to execute. So, one of the issues we’ve had in the past was that sometimes we did not go through the whole hug of doing proper studies on projects. However, this has changed; now we have done all the studies and we have taken the time to go through the studies. So, for example when it comes to partners selection, these studies sometimes have helped to decide whether it desirable to use a single pitch for a project or use the secondary stage of choosing partners that will work with us on our infrastructure projects. 

It is important that I restate that these critical studies are very important. They’re not cheap though, but they are very important and you will find out that once you do them right and you do them properly, they help you in running a successful project cycle from start to finish. This is also a fact to show why our projects in Lagos State are viable projects.

In terms of the protection of private investors who partner with us on projects, the act that established the Lagos State Public-Private Partnerships clearly provides the legal and regulatory framework within which things are done to give willing investors the comfort and confidence to enter into partnership with the state government. Our PPP arrangements are conducted in strict compliance with the provisions of this act. So, those coming with private capital equity have nothing to fear or worry about because the environment we have created in Lagos State guarantees the security and safety of investments, and ultimately returns on investments. 

Can we then say that Lagos State is investors–ready and safe? 

Yes. Everyone is a Lagosian in the strict sense of it. Every tribe comes to Lagos; every tribe stays in Lagos. Lagos State is at its best, home to every tribe. I think the climate we have here is that of a state of very industrious people. People flock into Lagos because they believe they can make it here; they can succeed when they get to Lagos. 

In Lagos State, the investment climate we have is very investors-friendly because it is safe. But I think what is also very important to note is that you can’t have investment in an environment that is not secure, and both existing and new investments can only be secure if the environment works like we have in Lagos. If you have good security and you have proper infrastructure to help safeguard the investment you put in, you will attract private capital investors. And I think we pride ourselves in that. Lagos is an environment that is enabling people and businesses to thrive. We also have fantastic people living in Lagos. 

Better still, we have put in place institutions and systems that ensure that no matter what happens things get done properly. It just goes to show that we put a lot of efforts and emphasis on ensuring the environment is investment-ready; we are readily open to do business in the right way. We are looking for investments that can help us develop the state faster in a more sustainable manner. This is why we also ensure we create and promote the right environment that gives the private capital investors returns on their investments as well. So, because the environment is enabling, we are able to secure lots of private sector capital to accelerate our quest for infrastructure development more than any other federating state has done. 

Does Lagos State adopt any specific PPPs model? If yes, can you explain with specific examples of projects the model has delivered?

We have numerous models of PPPs; it depends on the model that suits a particular project. We don’t restrict ourselves. You may find out that for a particular project BOT (Build, Operate and Transfer) may work, but sometimes the joint venture works well. So, it depends on what can work for certain projects and what area of the industry we’re looking at. Let me take LASU that I cited earlier as an example; it’s a BOT.  

We have a softer selling term which we call the people’s-friendly PPPs, which we have been delivering through collaboration under the arrangement called joint ventures. People’s-friendly PPPs can be described in the layman’s language as low-hanging fruits. These are short-term projects that people can see immediately unlike the long-term capital-intensive projects that require a longer period of execution. The deployment of technology solutions such as wearable body camera by traffic management personnel to ease traffic congestion in the state is one of such people’s-friendly projects. 

As far as PPPs models are concerned, we’re not fixated or boxed into a tight corner by insisting that it has to be a BOT. The various projects cut across various models. Things are also done in such a way that you can cancel or amend something that you feel is not going to deliver the expected outcome, and you can then say this is the way it has to be done. Also, with the way we work here, our environment is peculiar. So, we have the understanding that in Africa, what works in Europe might not work here; you have to ensure that your deals are structured to fit into your environment.

How does PPPs work for the Lagos State government in bridging the shortfall in the provision of affordable houses to people of the state?

There are various models for PPPs and housing sector is one that is obviously of keen interest to the Lagos State government. While we acknowledge that we have housing deficits in Nigeria and also within the states, one of the things we pride ourselves in is our unwavering commitment to provide the right types of housing. It’s a challenge though because sometimes someone who is coming to invest in housing is looking for return on investment as quickly as possible. You have to balance it as to what is affordable and what is not affordable. 

There is a wide range of projects you can look at, but then we have found out that when we are talking to private investors who are coming to develop or build housing projects, we ensure they take into account the environment as well. So it is not just about an investor coming to build a housing project and move on; you have to ensure that the social aspects are taken care of. You need to ensure that if you’re building multiple units, adequate parking is provided. We have to ensure that the terrain is preserved as well. So, there is balance. We ensure that all aspects are well covered. 

How important is the procurement process in PPPs structure vis a vis pre-qualification assessments of private investors among others?

In PPPs, there has to be a process and transparency is key. What we try to ensure is that from start to finish, it’s an open process, a transparent process. So, depending on the size and nature of the project, we go through various stages. We go for the request for expression of interest (REOI). We start off with sending out publication saying interested private sector investors should express interest in particular projects. Then we go through RFQ (Request for Qualifications); then RFPs (Request for Proposals) and then we evaluate that. And most people value that. We then go through a process to be able to identify the preferred bidder and the reserved bidder in the event that if your negotiations break down with the preferred bidder, you can defer to your reservation. 

One of the things we are hoping to do is, by the end of this year we would have identified who the preferred bidder is for the proposed 38km Fourth Mainland Bridge which the state government plans to do, to connect Lagos Island via Lekki, Langbasa and Baiyeku towns, across Lagos Lagoon to Itamaga in Ikorodu. 

But I think it’s important to ensure that you go through the full process for your PPPs projects so that there are no issues; the process is known, it’s open, it’s fair, it’s a transparent process and everyone can see that. I think private capital investors also appreciate that our process is open and transparent.

Lagos absorbs greater percentage of people migrating from other places into the megacity; what role (s) does PPPs Office play in absorbing the impact and bringing Governor Babajide Sanwo-Olu’s dream of a Greater Lagos to reality?

Lagos is a unique and big city where we have a lot of pressures on infrastructure, be it physical or social. There are estimated over 22 million residents in Lagos State and the impact of rising population on our social infrastructure, healthcare facilities, schools, roads etcetera is quite enormous. But the state government has been unrelenting in its commitment to ensure we have adequate healthcare facilities for the residents, adequate schools for our children and all of that. 

We want to ensure we have infrastructure that can take good care of the huge population of people that we have within the state. So, we are looking at various sectors of the economy to upscale our infrastructure. Our objective is to ensure that once we can build the supporting critical infrastructure that we need, which is the hard infrastructure – roads, the bridges, the rail, ferries etcetera – our capacity to absorb shocks will increase. 

We are also ensuring that we increase social infrastructure to ensure that we provide adequate healthcare, adequate schools for our people. I think one of the things that would help us out is what we are trying to do, which is that this administration is looking at how we can know ourselves by way of generating a reliable database of residents of the state. We need to know how many we are by way of having a reliable identity system whereby everyone living in Lagos State is identified. We need to know ourselves and our neighbours living next to us in our communities, which is what LASRRA (Lagos State Residents Registration Agency) is doing with the LAG ID Card so that once residents are captured into a central database, we can know how many people live in a particular area. This way, we can plan the distribution of social amenities and infrastructure and thereby enabling the residents to have access to social services faster. 

So, with LAG ID Card, it will be easier for the state government to know how many people we have, where we live, what infrastructure is needed most and so forth. It will also help us to plan effectively for security. And there are opportunities for public-private sector partnership within this space too.