Lagos cancels multi-tolls on Lekki-Epe expressway

Aerial view of Lekki

Aerial view of Lekki

Official says the interest of the present administration is not to make the infrastructure a moneymaking venture, but rather, to expand the road to make commuting easier for the residents.

TO underscore its commitment to the delivery Lekki-Epe expressway expansion project, the Lagos State Government has reorganized the management of Messrs. Lekki Concession Company (LCC), which is now the contractor handling the project.

The latest development has put a stop to speculation that the tolling at three different spots may be revisited.

With the new development, original plan that incorporated three toll plazas is now cancelled, with only one located at Kilometre 1, Maroko, would remain functioning.

Speaking on the new development last week, the new Managing Director and Chief Executive Officer of the company, Mrs. Shakirat Babatunde, said in line with Governor Akinwunmi Ambode’s directive, the two additional plazas have been cancelled, now serving as ‘Customer Service Points”.

According to Babatunde, the interest of the present administration is not to make the infrastructure a moneymaking venture, but rather, to expand the road to make commuting easier for the residents.

Besides, she sought for the adherence of traffic rules along the axis, noting that motor cycle operators (notoriously known as okada), are no longer allowed on the route.

“When movement of people and goods are not impeded, economic activities will improve, thus, contributing to the welfare of Lagos residents. But in a situation by which an infrastructure meant to improve peoples life is now reduce to revenue collection, struggling populace would bear the brunt and this is not acceptable to Governor Ambode”, said

To ensure that this objective is realized, she urged road users to key into e-tag initiative put in place by the company, which she said is capable of removing gridlock at the plaza in the process of payment and collection of change by motorists.

On the possibility of completing the expansion project as originally planned in view of the fact that funds would be facilitated from the proceeds made on each tolling plaza, Babatunde assured that government is committed to its completion.

“Government is committed to fund the project from its budget, but whatever we make from the only approved toll plaza would be added. Besides, we have take note of the spoilt portions, especially, Bogije and Lakowe areas, where palliative measures are urgently needed”, said the CEO, adding that government still retains Messrs HiTech as its contractor, but no longer on a concession basis.

It would recalled that the reasons why the government decided to buy out the private parties in the concession include the request by the Lekki-Epe Concession Company, to raise the tolling rate on the first toll plaza by 20percent from a minimum of N120 to N166 for a car at the minimum; to commence toll collection at the second toll plaza- 10km from the first- at the new rate; and insisting that toll must commence at the second toll plaza to be able to raise fund for further construction, despite the obvious public opposition to such.

According to LCC, the costs of construction have risen as a result of rising interest rate. There was also unconfirmed reports that the concessionaires wanted to increase the number of toll points to four from three in the concession agreement. The government perhaps thought it wise to step in early and rescue an already bad situation.

The concession right on the road is to be bought at an estimated sum of N25.3 billion; N15 billion would be expended for the buyback of the right; N6.8 billion to service existing debt obligations and N3.5 billion for third-party liability. This is after an estimated N35 billion has been expended to construct only 30percent of a road, five years into commencement in 2008.

The estimated total cost of construction of the entire road at financial close in 2008 was N55 billion with an estimated construction time of four years. At the end of the buyback, the LCC would become a quasi-private investment company fully owned by the state government and would continue to manage the concession.

“Unfortunately, the Lagos State Government has not been forthcoming in providing clear and detailed information about the project since inception and on the current decision. It therefore leaves the public with conjectures and rooms for misinterpretation of its intention. There exists no current official information on the Lekki-Epe Concession project in public domain. Both the Lagos State Government and the LCC have refused to make available such information. It appears that the governance is carried out in secrecy and Lagosians are fed the information the administration wishes them to know.

“But we thank God for bold step taken by Governor Akinwunmi Ambode, by finally appointed a neutral person as the managing director/CEO LCC. This has put paid to any skeptics by the public on the sincerity of government to remove the burden of shylock decision on the people”, said an official of Eti-Osa Heritage, a socio-cultural group that spearheaded disapproval of the initiative at the inception.

The 49.4km road starting from Ozumba Mbadinwe in Victoria Island through Lekki and Ajah to Epe was conceived for reconstruction through public private partnership arrangement via concession in 2006. The project involves the upgrade, expansion and maintenance of the expressway (Phase I), and construction of approximately 20km of the coastal road (Phase II) on the Lekki Peninsular.

The project is designed as a Build-Operate-Transfer, BOT, model of infrastructure delivery, under a 30-year concession agreement, after which the assets were to be transferred to the Lagos State Government in good condition. Revenue from toll collection would provide the concessionaire with the cash inflow required to recover the cost of investments, service and repay the debts whilst meeting capital and operating costs.

The LCC as a special purpose vehicle for the management of the concession is made up of the Lagos State Government representing the interest of the Lagos citizens, the Asset and Resource Management Company, ARM, as the key investor, and Hitech Construction Company.

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