Lagos Cancels Lekki-Epe Expressway Concession
konknaijaboy | On 28, Aug 2013
Controversy surrounding the management of the Lekki-Epe Expressway took a new turn on Tuesday as the Lagos State Government announced the termination of its concession agreement with the Lekki Concession Company.
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 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.”