Lagos Cancels Lekki- Epe Concession Agreement

Lagos State Government announced the termination of its concession agreement with the Lekki Concession Company on tuesday.

Already, the state House of Assembly has approved a supplementary budget of N7.5bn to enable the government to fund the acquisition of the existing concession right of the expressway.

The LCC was mandated under a 30-year Build, Operate and Transfer agreement to upgrade, expand and maintain the about 50-kilometre road (Phase I), and construct another 20km of coastal road (Phase II) along the Lekki corridor.

But the firm and the state government came under severe attacks when they introduced what the residents considered as high tolls on the road in 2011 after significant progress was made in the first phase.

The decision of the state government to terminate the concession agreement, it was learnt, followed the lawmakers’ approval of the supplementary budget, which gave it the right to acquire the existing concession rights and toll revenue benefits held by the concessionaire.

Governor Babatunde Fashola had in a supplementary budget proposal letter to the state House of Assembly dated August 19, 2013, requested it to amend this year’s budget owing to unforeseen developments in terms of the state’s internally generated revenue.

Fashola had said, “The proposal for further amendment is largely predicated on the need to fund the acquisition of the existing concession, right and toll revenue benefit held by the Lekki Concession Company, the concessionaire for the Eti-Osa-Lekki-Epe Expressway. This will effectively accelerate the transfer of ownership of the road to the state, leaving the state with wider policy options with regards to that important infrastructure.

“In order to address these issues, we have proposed a two-prong approach namely: re-ordering some expenditure provisions and also directing supplementation of the year 2013 budget. This will entail an increase in the overall budget size by N7.5bn. This is against the background of a projected shortfall of N22.5bn in budgeted internally generated revenues, which now need to be covered by the additional borrowings.”

The Assembly gave its approval to the request on Tuesday in a proposal read on the floor by the Clerk, Mr. Ganiyu Abiru.

The commissioners for Budget and Economic Planning, Mr. Ben Akabueze; Finance, Mr. Ayo Gbeleyi; and Works and Infrastructure, Mr. Obafemi Hamzat, were at the House to defend the proposal.

Following the latest amendment, the revised budget has thus increased from N499.6bn to N507.105bn.

Users of the expanded road have had to part with different amounts, depending on their class of vehicles. The amounts rage from N50 for motorcycles to N120 for saloon cars and tricycles; N150 for Sports Utility Vehicles, minibuses and pick-up trucks; N80 for commercial mini-buses; and N250 and N350 for light trucks and heavy trucks, and buses with two or more heavy axles, respectively.

Fees are currently being collected at the first toll point called the Admiralty Plaza.

The Conservation Plaza was built about 10km away from the first tolling point bewteeen the Chevron Drive and Oluwanisola Estate, but the collection of tolls has not started.

A human rights lawyer, Mr. Ebun Olu-Adegboruwa, took the matter to court to stop the LCC and the state government from enforcing the toll collection until the 10km alternative route was constructed for those that might not use the road.

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