Investors to raise N116bn for Lagos-Ibadan Expressway reconstruction

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Private investors will bear 70 per cent of the N167 billion rebuilding cost of the Lagos-Ibadan Expressway to ensure its timely completion, the Federal Government has said.

The 30 per cent balance of about N50 billion would be provided by the Federal Government, which however, said it would only be able to pay N25 billion of its counterpart funding this year as contained in the 2014 Budget.

The government was however silent on the modalities of the fresh concession of the Expressway and the likely investors.

The clarifications were made in a statement in Abuja by the Federal Ministry of Works through its Director of Information, Bisi Agbonhin.

The statement said: “It is worthy of note that from inception, the Engineering Procurement and Construction (EPC) contracts for implementation of the road project was awarded by the Federal Ministry of Works with attendant Bureau of Public Procurement (BPP) and Federal Executive Council (FEC) approvals to the two contractors.

“This was also subject to the finances scheme put in place through the private sector-led project finance; infrastructure finance facility with the Federal Government of Nigeria providing 30 per cent of the project cost (i.e. N50billion), while the balance of 70 per cent would be provided by the investors and financiers to the project. This arrangement will enable completion of the project on time and on budget. “

The government said it had already allocated N25 billion out of its N50 billion counterpart funds for the Expressway in the 2014 Budget.

The statement added that “Contrary to the misinformation that the Federal Government has voted N23 million in the 2014 budget for hiring the services of consultants on PPP scheme, the Federal Government has made a total provision for the sum of N25 billion as her own counterpart funding in the 2014 budget, with a view to providing the balance of N25billion in the 2015 budget.”

A document from the Budget Office of the Federation, however, showed that N5 billion was voted for the “rehabilitation of Lagos-Shagamu-Ibadan dual carriageway Section 1”.

The government said contrary to alleged “grave allegations” in the story, both Julius Berger Plc and Reynolds Construction Company Plc had begun work on the Expressway.

The statement said: “In the report, grave allegations were raised maliciously indicting the Federal Government on the reconstruction of the Lagos-Ibadan Expressway.

“The insinuations are malicious, untrue and unfounded. To put the facts straight, the general public should note that since the Presidential ground breaking ceremony of July 2013, both Julius Berger Nigeria Plc and Reynolds Construction Company Plc commenced early work on the road in preparation for full blown construction work.

“It is evident that road users who plied the road during the 2013 yuletide season enjoyed seamless motoring as there was free flow of traffic due to the reconstruction efforts embarked upon by the construction companies.”

The Federal Government had in November 2012 terminated the 25-year concession given to Wale Babalakin’s Bi-Courtney Limited for the construction and maintenance of the 105-kilometre Lagos-Ibadan Expressway.

The expressway was concessioned to Bi-Courtney in 2009 at N89.53 billion for 25 years.

The Minister of Works, Mike Onolememen, said the concession agreement was revoked due to failure of Bi-Courtney to adhere to the terms.

In June last year, the Federal Government re-awarded the reconstruction of the Expressway to Julius Berger Plc and RCC.

In July 2013, President Goodluck Jonathan flagged off the reconstruction of the Expressway at N167 billion with a completion timeline of 48 months. But barely six months after, the project has run into a hitch.

The government is looking for investors to bail it out to be able to complete the project within 48 months.

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