Lagos Cancels Third Toll Plaza on Lekki-Epe Expressway

• Agrees to pay senior lenders N40 billion

The Lagos State Government on Wednesday said it had cancelled the third toll plaza on the Lekki-Epe-Eti-Osa expressway, which it said, was concluded after listening to the yearnings of the people and feedback from concerned residents.

The state government also said it had agreed to pay a sum of N40 billion to a consortium of senior lenders, which provided facilities to develop the project then contracted under a public-private partnership (PPP) arrangement.

The Commissioner for Finance, Mr. Ayodeji Gbeleyi, gave details about how the state government bought back the Lekki Concession Company (LCC), the then concessionaire of the expressway at a news conference he addressed at Alausa.

Gbeleyi, who addressed the conference alongside the Commissioner for Information and Strategy, Mr. Aderemi Ibirogba and Accountant-General of the state, Mr. David Sumonu, said the state government had cancelled the initially planned third toll plaza on the expressway having paid fully for the buyback of the expressway.

He said: “We have listened to the yearnings of the people and feedback from concerned residents. We took policy decision to cancel the initially planned third toll plaza on Lekki-Epe road that will have been located around Pan Atlantic University. Today, we will only the two toll plazas that have been built along the expressway.”

He explained that the state government got the approval of the state House of Assembly in 2013 “to embark on equity share buyback for the purpose of managing Lekki-Epe road. The negotiated price for the transaction is N15 billion.”

He added that the transaction came to a close in June 2014, especially in terms of completing other conditions precedent for the state government “to take over and effect the final payments. We paid in two tranches.

“We paid N7.5 billion in the first instance and then N7.5 billion in the second instance. We paid the second trance on December 11, 2014. From that date, government took effective control of Lekki Concession Company.”

Consequently, the commissioner disclosed that the state government had  seconded into the LCC three top management staff comprising the managing director, chief legal officer and chief technical officer while a four-man board of directors constituted already.

He said the four-man board of directors was made up of the State Executive Council members including the Attorney-General of the state, Mr. Adeola Ipaye, Commissioner for Works & Infrastructure, Dr. Obafemi Hamzat, his Economic Planning and Budget counterpart, Pastor Ben Akabueze and himself, who is the Chairman of the Board.

He said: “For the purpose of transaction in a typical PPP project finance, we will find two main sources of financing. This is what we refer to as debt and equity. The equity is provided by the promoter of the project. The debt is provided by various lenders including commercial banks, development finance institutions as well as multilateral agencies.

“With respect to Lekki-Epe road, we have an amount of about N40 billion outstanding to this consortium of senior lenders. The senior lenders area made up of eight financial institutions including African Development Bank, Standard Bank UK, IBTC Stanbic, First Bank, Zenith Bank, Diamond Bank, Fidelity Bank and UBA.

“Therefore, for such a project that is packaged, warehoused or ring-fenced in a special purposed vehicle, even though the state bought out equity interest in the transaction, the debt exposure to the company must be honoured over agreed and contracted terms and conditions for our investment climate, not just for Lagos, but also for Nigeria

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