Plans are being perfected by the government of Lagos State to put up the Okoko-Seme border axis of the Lagos-Badagry Expressway for concession.
Akinyemi Ashade, state commissioner for finance, confirmed this to BusinessDay. Ashade said the state government would be throwing the bid open for interested investors “in line with international best practice.”
Concession entails a negotiated contract between a company or a group and a government that gives the company or group the right to operate a specific business or project within the government’s jurisdiction, subject to conditions agreeable to both parties.
Ashade did not disclose the concession model to be adopted in the execution of the road, but said it was being discussed at the highest level of governance and that the managers of the state economy would be excited to open talks with the would-be investors.
“A lot of investors are showing interest,” said Ashade who was recently appointed by Governor Akinwunmi Ambode to sit atop the ministry of finance, in addition to his earlier appointment as the commissioner for economic planning and budget.
In concessions, private vendors operate on an already existing facility and are allowed to charge users a fee or toll for use of the facility within the period of the contract. One popular model is Build –Operate- Transfer (BOT). Under this arrangement, the private investors access funds to build a public facility/utility, sell the output to the public and transfer at the end of the contract tenure.
Another is Build-Rent-Transfer (BRT), in which case, the private investors build facilities, rent them out to recoup investment, and thereafter, transfer the facility to the authority (government) at the end of contract duration.
The state’s bid to expand the Lagos-Badagry Expressway from four to 10 lanes, started under the previous governor, Babatunde Fashola, when the government signed the first contract with Julius Berger Plc in 2008 to develop Lot 1 of the road, spanning from the Eric Moore end of the Orile-Iganmu axis to Mile 2.
The Lot 2, starting from Mile 2 to Okoko, in Ojo, was subsequently awarded to China Civil Engineering Construction Corporation (CCECC) which also got the contract to construct the rail component of the road, 27 kilometre rail line to run from Okoko to the Marina waterfront on the Lagos Island.
The road project from Eric Moore to the Nigerian- Benin Republic border at Seme, was projected to be delivered in 2014, but has suffered long delays in its execution, with the previous government blaming it mainly on funds.
With currently declining revenues to the national treasury due to the crash in prices of crude oil in the international market which has impacted the Nigerian economy negatively, governments especially at state level, are turning to private funds as options to deliver critical infrastructure.
JOSHUA BASSEY
