The Lagos State Government announced yesterday that it was terminating the Lekki Concession Company contract on the Lekki-Epe expressway 7 years into its 30year concession. The controversial tolling on the expressway appears to have finally taken its toll on the Lagos State Government. The LASG finally gave reasons for the closure as reported by the Vanguard Newspaper;
Lagos State Government, yesterday, said it terminated its concession agreement with Lekki Concession Company, LCC, the concessionaire handling the 49.63 kilometer Eti-Osa-Lekki-Epe Expressway, “to save motorists from paying exorbitant toll tariff on the ever busy road.”
Commissioner for Finance, Mr. Ayo Gbeleyi, said: “As provided for in the concession agreement between the parties, the concessionaire, (LCC) can increase the toll tariff based on the inflation rate in the country, among other things every quarter. The risk is that when an agreement was reached between two parties to negotiate on a contract, whatever the year, one cannot envisage the entire challenge that will arise later. The dynamics of the Lekki project did not envisage that there would be devaluation of the country’s currency, between 2008 and 2013 from N118 to N160. This impacted on their cost which they will attempt to pass to the common man on the street, because of the inflation adjustment.
“For instance, if the state government had not come up with this plan last July, the concessionaire would have increased the toll fee for cars from N120 to N144 while drivers of SUVs will have to part with N180 as against the N150 cost they are still enjoying. This is because the concessionaire would have added 20 percent. The government felt that this would be difficult to push to the residents at this time. And of course, at every anniversary, it was meant to go up by the inflation rate plus five percent. And we should not forget that this is the first Public Private Partnership, PPP, agreement reached by the state government.”
The reasons detailed above seem rather unacceptable to me and appears to represent a smokescreen for something else. Some suggest this may not be unconnected to the court case brought against the state. The Plaintiffs had requested from the Judge that the Government complete the 50km road as well as the alternative routes before it starts to collect toll. I guess we will find out the true story someday.