April 16, 2024

Afenifere: N15.6 trillion Coastal Highway contract is ill-advised

Afenifere, Igbo presidency

…says railroad should supersede for better economic purposes

By Prince Justice Faloye

Despite Afenifere’s March 2nd, 2024 initial public demand for transparency of the Lagos-Calabar Coastal Highway contract awarded to Chagoury Hitech Construction Company, and ex-Vice President Atiku’s further probing last week, the government has failed to answer the calls for transparency and continues the nearly twenty years wastage on the Lagos-Epe corridor. 

Afenifere demands more clarity on the Lagos-Calabar Coastal Highway Contract, especially the Lekki-Epe corridor that has been a source of controversy since 2008, when it was awarded as a Private Public Partnership contract to Craneburg Construction, with obscure directors, to the recent N1 trillion PPP contract to Hitech. The Minister of Works Dave Umahi in his April 10th, 2024 response claimed that Hitech Construction was the only construction company capable of building such a project, but in the same response alluded to the fact that when underwater reconstructive engineering of the Third Mainland was required Julius Berger was called being the only construction company that could handle it. So, what experience does Hitech have in constructing a coastal Highway with huge portions over water and mangrove swamps?

In a preceding u-turn, the minister reversed his September 23 2023 statement made when announcing the awarding of the contract, that it is a Public Private Partnership that won’t cost the government anything, to now state that the government would share up to 30% cost. Under Bola Ahmed Tinubu’s Lagos State government, the Lagos-Epe expressway was initially billed to be a Private Public Partnership but was later reversed to a project that cost Lagos State government and the public so much and still remains uncompleted nearly twenty years afterward. Just as the Lekki-Epe expressway was wrongly labeled by Lagos State government as a PPP with no cost to Lagos taxpayers, once again it is being labeled a PPP by President Tinubu’s government despite earmarking  N1 trillion for the same 40 miles long five-mile-wide corridor.

The Lekki-Epe expressway was initially slated in 2006 as a PPP with no cost to Lagos taxpayers, but over time, not only did Lagos State government commit US$42 million of taxpayers’ money to the project, but syndicated loans from some financial institutions to the tune of $85million (N85billion), and another  US$80 million from two others, yet Lagos commuters were made to pay tolls of undisclosed billions. Another finance house closed financing for the US$426 million (N50.1bn), which was criticized as being 300 percent overpriced, costing over N4.15 billion per kilometer compared to N1.3 billion per kilometer for the Lagos-Ibadan expressway. Now once again, we are not sure of the total cost even after awarding the contract as the Honourable  Minister claims the government will bear between five percent to 30 percent of the cost, while loans and tolls will pay the rest. But from experience, we know the contractor won’t get the loans unless the government guarantees it or pays directly.

Therefore it is audacious to award the same Lagos-Epe corridor N1 trillion, which comes to a rate of about N15 billion per kilometer. But the Minister claims there were alterations and additions to the size of the project like doubling the number of lanes and type of shoulder that makes it about N4bn. Also, the initial Lagos-Epe road included the construction of alternative coastal roads, so the government needs to clarify if, where, and why the roads overlap. 

In addition to the basic questions of why there was no competitive bidding, there is a need to justify the economic implications of the Coastal Highway. Why does the highway start at Chagoury’s Eko Hotel affecting huge dollars of tourist attractions, yet stops at no significant town of economic importance in Southwest? Why leave the single most important economic empowering infrastructure, the Lagos-Calabar to build the world’s first and only coastal highway that majorly passes through sparsely populated swamps? The Minister alluded to the possibility of providing a divider that a train can run, which just shows that he has a myopic view that only sees road and rail as mere transport from point A to B, not the huge economic multipliers underlying their construction.

Contrary to media spins, the US Pacific West Coast I-5 highway is on solid ground and inland like our current East-West Road, neither are the USA East Coast I-95 Highway nor the United Kingdom M1 motorway coastal Highways. Highways are to link most towns in order to stimulate economic growth, and there is no economic sense to build highways over water except to avoid city center traffic like the Third Mainland bridge! Just like main highways spur feeder routes and local businesses like food, beverages, and mechanics, railways also spur the growth of feeder routes, iron works, haulage, logistics, and trade along land routes.

There are also serious ecological issues of killing our natural coastal fauna, especially our mangrove swamps that form a strong natural defense against tidal waves and flooding. What are the ecological costs of a project with less economic value than the East-West Road, when it can not stimulate the local economy but disrupt and destroy fishing villages and canoe houses?

The nearly N20 trillion being wasted could have been wisely used to build the three Lagos-Calabar, Ilorin-Yola and Sokoto-Maiduguri East-West railways, which will stimulate an accelerated railway development that is universally acknowledged to be the launchpad of heavy manufacturing industrialization, to provide millions of jobs and a new income stream. Railways is the USA’s most profitable industry with a 50 percent profit margin from a $68.8 billion revenue in 2020 compared to the $20.43 billion Nigerian oil revenues of the same year. 

Unlike Lagos State, essentially a one-party state that has run like a fiefdom for the last twenty-four years, Nigerians will not look and fold their arms while our economic future is fritter away between business and neighborhood friends. Afenifere is therefore not only imploring the federal government to be more transparent but calling on legislators, lawyers, and good governance activists to ensure Nigeria is not run like a one-party Banana Republic

Prince Justice J Faloye is Afenifere deputy Publicity Secretary