Speeches

Commeration Of The First Phase Of The Abridged Works Programme Of The Lagos Infrastructure Project (LIP) By Messrs Lekki Concession Company Limited

Apr 3, 2008 - It is with great pleasure and total sense of fulfillment that I welcome everyone as stakeholders to this very brief ceremony, which has dual purposes of further familiarizing with the Lekki-Epe project and also, commemorating the completion of the first 2Km of the Abridged Works Programme, that is, Falomo Bridge to Exxon-Mobil House. It is a fact that the construction of new roads, new schools, new health facilities or new stadia, just to mention a few, improve the quality of our physical landscape, increase the overall value of our public and private assets and enhance our competitiveness in the quest by global Mega-cities to attract scarce foreign investment. Such enduring brick and mortar projects are enduring landmarks which any Administration will be understandably glad to bequeath to posterity as indisputable evidence of its performance in office. This is why it is important to continually work on the improvement, renewal and provision of public infrastructure. However, it is instructive to note that the unrestrained influx of people into the Lagos Mega-city creates unfettered urban growth with its attendant pressure on public infrastructure and this is a challenge to our rapid infrastructure improvement Programme in Lagos State.

The large population of Lagos and particularly the Lekki Corridor which is the fastest developing area in Africa are not figments of our imagination, because statistical evidence shows that the Lekki-Epe Expressway accommodates an Average Daily Traffic of 50,000 - 80,000 vehicles. This clearly shows that enormous pressure is exerted on our road network, hence a general and greater need for regular upgrading, maintenance and rehabilitation of Lagos roads.

In the course of governance, particularly democratic governance which demands that its “dividends” must be beneficial and timely to the people, it has become very obvious that the resources of government cannot adequately take care of the huge financial outlay required for the provision of Public Infrastructure in a State like Lagos, with its multi-faceted infrastructural needs, thus the adoption of Public Private Partnership [PPP] model, as evidenced in what we have termed the “Lagos Infrastructure Project [LIP]” in conjunction with our esteemed partners, Messrs Lekki Concession Company Limited. The Concession Agreement between the Lagos State Government and Messrs Lekki Concession Company Limited for the design, construction, rehabilitation, operation and maintenance of the Lekki-Epe Expressway i.e. the Lagos Infrastructure Project, is a novel Public-Private-Partnership initiative, which is the first of its type in Nigeria and Sub-Saharan Africa. The scope of the Lagos Infrastructure Project (LIP) encompasses the expansion/rehabilitation of 49.36Km of the Lekki-Epe Expressway from Falomo Bridge to Eleko Beach Junction and the construction of the first 20km of the Coastal Road commencing at the Bar Beach on Ahmadu Bello Way with an option to also construct the Southern Bypass.

The expectation at the time of execution of the Agreement for this 30-year concession on Monday 24th April 2006 was that Financial Close would be achieved within six months, that is, by the end of October 2006. The Concessionaire therefore mobilized its Contractor, Messrs Hitech Construction Company Limited, to site and commenced the Early Works, which comprised cleaning of drains, clearing of verges and repairing of defective sections of the carriageway. As a matter of information, the Early Works Agreement was executed on Tuesday, 15th August 2006.

On completion of this Early Works phase of the construction programme, Financial Close had still not been achieved as envisaged because the Federal Support Agreement [FSA], a document critical for negotiations with Lenders [Local and Offshore] which the State Government and the Concessionaire needed to execute with the Federal Government was deliberately withheld by the Presidency under the leadership of Chief Olusegun Obasanjo. I am very certain we can all recollect what the relationship between the State Government and the Presidency was at that time. The State Government was therefore compelled to circumvent this situation to ensure that the high hopes of the people were not dashed, sustain public perception of continuity and visibility on the project as well as eliminate delays and additional costs that would arise if the Concessionaire was forced to demobilize and later commence re-mobilization of workers handling the relocation of all Utilities. Accordingly, the State Government provided a N5b bank guarantee which gave the Concessionaire the assurance it needed to commence the actual road expansion on the first 2Km of the alignment under what was termed the “Abridged Works Programme” which was executed with the Concessionaire on Friday, 15th December 2006. This Abridged Works is what we can all physically see on ground today.

Moreover, I am happy to inform you that the Federal Support Agreement has since been approved by the Federal Executive Council under the chairmanship of His Excellency, The President, Alhaji Umar Musa Yar’Adua. On behalf of the people and Government of Lagos State, I express our gratitude to President Umaru Yar’Adua whose patriotic leadership has led to this major step forward. The document was recently executed by my humble Self, the Honourable Minister of Finance, the Managing Director, Lekki Concession Company, and Representatives of the Lending Banks. Other documents we require from the Federal Government are expected to follow in due course. This development is a big plus to the credibility rating of the Nigerian Federation and will open up avenues for similar funding arrangements with multi-lateral Financing Institutions. It is also a vindication of the commitment of the Lagos State Government and the Private Sector to the project.

I must of course use this opportunity to ask for further support in the development of the Lagos-Badagry Expressway which is our gateway to the West Coast of Africa. Our Government has awarded the Contract for the design of the road in multi-lane super highway format, while we have begun the process of removing all illegal structures within the Right of Way. The buy-in, understanding and support of all concerned, is critical to delivering that project in the same manner that the LIP Project is progressing.

Lagos being the most populous State in Nigeria and the country’s industrial nerve center, the commercial hub of West Africa, a prime economic magnet in Africa and the sixth largest Mega-city in the world, it therefore faces enormous challenges in the provision and maintenance of critical infrastructure. These challenges are likely to become more acute as the State marches steadily towards becoming the third largest global Mega-city by Year 2015 as projected by the United Nations. This means that we must quickly invest heavily in the provision of more roads, bridges, drainages, schools, hospitals, jetties, hotels, shopping malls, houses, parks and gardens, courtrooms, electricity generating plants, fire stations and vehicles, water supply facilities as well as street and traffic lights. There is certainly no alternative to the utilization of PPPs as the most effective vehicle for the rapid expansion of critical infrastructure and this has become the norm all over the world given the inability of Government to solely meet the funding challenge.

In addition, the call for sectoral reforms, coupled with the need for private sector collaboration in the provision of infrastructural facilities necessitated the need for Government to facilitate an enabling environment/legal framework which is a pre-requisite for such Public Private Partnership [PPP] programmes. I therefore make bold to say that the Lagos State Government by the enactment of the Law No 3 of 2005 which provides for the establishment of the State Roads, Bridges & Highway Infrastructure [Private Sector Participation] Development Board; the Agency charged with the responsibility of regulating road concessions in Lagos State, is the first and only Law for Toll Roads in the Nigerian Federation. This template of ours is readily available for the use of the Federal and other State Governments of the Federation.

At this juncture, we must commend the foresight and courage of the Governor Emeritus, His Excellency, Asiwaju Bola Ahmed Tinubu whose Administration initiated this Public Private Partnership [PPP] project as a pilot model for rapid infrastructure development in Lagos State and Nigeria. But for the tenacity and determination of the Administration, and for the commitment and expertise of the Private Sector in partnering with Lagos State, especially ARM Investment Managers Limited who incorporated Lekki Concession Company for the specific purpose of executing the Concession, this initiative would have been abandoned long ago and we would not be here today to commemorate the completion of the first 2Km.

It is in our collective interest that this new road, just like all other public facilities, is well maintained and managed. This is a responsibility that belongs to us all and not just the Government and Lekki Concession Company. A recent World Bank Development Report observed that a 1% increase in Infrastructural Stocks is associated with at least a 1% increase in GDP particularly if the Infrastructural Investments are well maintained. The report states further that “properly maintained paved roads can have a potential longevity of ten to fifteen years before fresh resurfacing investments are injected. In fact, the rate of return for maintained paved roads is almost double that of road construction projects and Africa would in the 1980s have saved $12 billion in effective maintenance.”

In particular, we must ensure that this road does not become the victim of social vices such as street trading and begging. The investment made to allow for smooth, safe, efficient and timely commuting on the road will be a colossal waste if armies of traders and beggars are allowed to become pests to those using the road, as well as to put themselves in danger from fast-moving traffic. While Government will do its best to stop these activities, success depends on the Citizens. In the way that street trading is an economic activity, albeit illegal, begging has also unfortunately become an economic activity. As citizens, we can stop these undesirable and even harmful activities if we resolve to donate to churches and mosques, orphanages and remand homes instead of to beggars on the streets and if we go to approved Markets instead of shopping on the Highways. The possibility of earning income encourages these activities and it is in our power to bring them to an end by deliberately making that income unavailabe to beggars and street traders on our highways.

While I fully understand the harsh environment under which business concerns operate in present day Nigeria, I dare say that the Organized Private Sector needs a “Paradigm Shift” and become more involved in infrastructure funding which should now be viewed as a long term investment as against the usual preference for short term investment with quick returns.

Let me reiterate the resolve of this administration to do everything within its capacity to support the Organized Private Sector, more so when partnering with the State Government for infrastructural and developmental Projects. My Government is totally committed to creating a New Lagos which we and the future generations would be proud of and put to an end the debacle and problems of infrastructure paucity that currently exist. Smiles must return to the faces of Lagosians. My promise of providing a Brighter and Rewarding Future for all the good people of Lagos State still stands.

I must state that as a Government, nothing would gladden us more than the exhilarating experience of driving through a beautiful Lagos road free of time wasting bottlenecks and traffic chaos of unimaginable proportions. This is our dream for Lagos. I can confidently say that more projects of this nature will change the face of Lagos and automatically put us on the world map of success. It is pertinent to say that critics of these types of projects will look only at the token to be paid on this road but needless to say that on final completion, this tolled infrastructure would not just be a road but a service-based system that will bring together several advantages to Commuters. These would include such parameters as; reduced travel time, improved security, reduced fuel consumption, reduced maintenance costs as a result of reduced wear and tear on vehicles, low accident rates etc.

As further demonstration of the Government’s commitment to improving the situation on Lagos State Roads, the construction of 31 new roads were approved in 2007, and a further 31 in 2008. In addition, 4 new roads have been approved for construction to support the LIP Abridged Works Programme, including the dualization of Adetokunbo Ademola Street, Victoria Island ,which work is already on-going, plus three additional roads, that is the B’Jays Hotel Alleyway, the Maroko Foreshore Road and the Lekki Phase 1 first and second roundabouts link road.

May I further add that the Private Sector Initiative is not a one-stop shop for the provision of the much needed infrastructure as this Government will also explore all other models of delivery to achieve the desired objective of providing adequate facilities for the use of the good people of Lagos State within the ambits of reasonability and social responsibility. Lagos State will continue to strive to be an excellent showpiece of opportunities and landmark achievements. In this vein, the Lagos State Government has securitized the funding for the next phase of the Abridged Works phase of the project through a N6.5 Billion Bank Guarantee pending the achievement of Financial Close. I would therefore urge our numerous categories of genuine Stakeholders to bear with us when work resumes shortly on further sections of the alignment as it is for the benefit of us all.

I must commend the Concessionaire, Messrs Lekki Concession Company Limited, for its very thorough, competent and professional handling of its brief. Despite the numerous teething problems and the several delays they still showed the required commitment and resilience to weather the storm and overcome all the odds. Each time I passed this way while construction of this portion was in progress, I was always impressed by the seriousness of the Workers; the courtesy with which they related to the public and the very methodical execution of the project. They would not demolish a wall or fence obstructing the right of way until an alternative had been constructed at the appropriate location. The magnitude of this achievement can be best appreciated when we realize that 50,000 to 80,000 vehicles used this road daily while construction was on at night and during the day. These cars are from over 39,000 tenements who reside in the Estates and Schemes on the Lekki Peninsula.

Equally worthy of commendation in this regard is the heroic performance of the officers and men of the Lagos State Traffic Management Authority [LASTMA] who working together with the Concessionaire’s Contractor and other Law Enforcement Agencies [Nigeria Police and the Federal Road Safety Commission] ensured that traffic moved while construction went on. LASTMA has without doubt established itself as a brand of efficiency in Traffic Management that we can proudly show to the world. I must not forget to applaud the Lagos State House of Assembly that created the Legal Framework for this and similar projects by enacting the Enabling Law No 3 of 2005 to provide for the establishment of the State Roads, Bridges & Highway Infrastructure [Private Sector Participation] Development Board. I must acknowledge the role of all my colleagues in the Cabinet of the last Administration who contributed in one way or the other to the success of this Project.

I must quickly add that the effort of the Lagos State Roads, Bridges and Highway Infrastructure [PSP] Board, other State and Federal Agencies is much appreciated. I am very much aware of the huge amount of work that has been tirelessly expended in the course of the delivery of this phase of the Project.

Once again, I assure the good people of Lagos State that our administration will by God’s grace see this project through to its logical conclusion. We are determined to make the Lagos Infrastructure Project the flagship for PPPs in Lagos and Nigeria. As work continues on the remaining parts of the project, I dedicate this expanded, and modernized first 2Km of the Lekki-Epe Expressway to the glory of God and the comfortable, convenient and secure use of Commuters.

Thank you for listening and God Bless us all.

Eko O Ni Baje O!

Babatunde Fashola, SAN
Governor of Lagos State