REVEALED: Lagos acquired LCC years before Lekki-Epe toll fare hike
The Lagos state government acquired ownership of the Lekki Concession Company (LCC) and the Lekki-Epe expressway toll gate in December 2014, TheCable can report.
The LCC had in February hiked the toll payable by vehicles plying the route, a move antagonistic to one of Lagos’ stated reasons for the acquisition.
In August 2013, the administration of ex-governor Babatunde Fashola had requested a supplementation of the fiscal budget to grant total control of the expressway to the state.
This, the government said, would prevent a wanton increase of the toll by the concessionaire, and leave the state with wider policy options.
The state house of assembly subsequently approved N7.5bn to accelerate the acquisition process.
In March 2018, the Human and Environmental Development Agenda (HEDA) requested Akinwumi Ambode, Lagos governor, to give an update on the state’s acquisition of parts of the Lekki-Epe expressway.
Olanrewaju Suraju, chairman, HEDA resource centre, said Lagosians deserve to know why there has been a delay in the acquisition and also the contract terms and agreement entered into by the state government and the LCC.
According to Suraju, the taxpayers of the state deserve more than “passing toll increment and public-private-partnership shrouded in secrecy, opacity and conjectures”.
Responding to HEDA’s Freedom of Information (FOI) request for an update, the state ministry of transportation said it acquired the road and the LCC in December 2014.
TO Salaam, permanent secretary of the ministry, in the letter dated May 8, 2018, and seen by TheCable, said the state acquired the LCC and toll gate through a share and purchase agreement.
“The Lekki-Epe Concession (the project) was initiated by the ministry of transportation under the infrastructure development programme by the former administration.,” the letter read.
“Please, be informed that the Lagos state government via a share and purchase agreement acquired Lekki Concession Company limited in December 2014. The Lekki Concession Company Limited was set up as a special purpose vehicle to execute the Eti-Osa/Lekki-Epe expressway toll road concession.
“The project which was initially designed as a public private partnership project was based on assumptions and economic indicators that are no longer consistent with market realities. In the circumstance and upon consultation with the erstwhile shareholders and all major shareholders including the state house of assembly, the project was restricted, hence the acquisition of same by the government.
“Further information can be obtained from the Lekki Concession Company if required.”
A copy of the FOI
When the toll review took effect in February, the LCC said the “increase is as a result of current economic and business realities that have adversely increased the cost of operations and maintenance of the company’s loan obligations”.