Nigeria: Governor Fashola and the N15 billion Scam called Toll-gate buyout
The present scam being perpetrated by Governor Babantunde Fashola and his godfather, Asiwaju Bola Tinubu on Lagosians is past speechless! Nigerians are stupefied into silence. N15 billion payout! With this massive scam going on in the name of concession, I need a concession myself! Fresh facts emerged on Wednesday regarding the decision
of the Lagos State Government to acquire the existing concession rights and toll revenue benefits held by the Lekki Concession Company (LCC), the concessionaire for the Eti-Osa Lekki-Epe Expressway. The official reason given by Fashola is that the buy-out was to prevent wanton increase of the toll by the concessionaire.
Justifying why he acquired concession rights from LCC, Lagos Govt said the move was to ensure that the current toll paid by motorists is controlled and determined by government as well as give it the power to discontinue the toll at any time.
“The current concessionaire has in fact proposed another 20 per cent increase in current toll rate collected on the road. But with us taking over, we will decide that too,” they told us.
But the real reason is that “LCC owned by the god in Bourdillon (Bola Tinubu) is cashing out early — given the political uncertainties of not controlling Lagos post 2015.”
According to the state Finance Ministry, Ayo Gbeleyi: government would be paying N15 billion as buyout fund; N6.8 billion to service existing debt obligations of the tolling company; and N3.5 billion for third party liability. Gbeleyi also observed that N32 billion has so far been spent on the road, with state government paying N5 billion in 2008.
“The original concessioning agreement is to last for 30 years, from November 2008 to November 2030. “But with our proposal and our transaction, the Special Purpose Vehicle (SPV) will be maintained with government owning it 100 per cent,” Gbeleyi said.
The latest we are hearing this morning is that Lagos State Government will issue bonds totalling N87.5 billion before the end of the 2013 fiscal year to take over the concession rights of the Lekki-Epe Expressway from the Lekki Concession Company (LCC).
The state government also spoke on plans to restructure its borrowing plan, noting that the N30 billion previously sought under the World Bank Development Policy Operation (DPO II) “will no longer materialise this year.”
The plan was contained in a letter dated August 19, which Governor Babatunde Fashola (SAN), addressed to the Speaker of the state House of Assembly, Hon. Adeyemi Ikuforiji, thereby seeking approval of the assembly.
My friends: set up a scam and the state will buy you out BIG TIME.
A finance expert, Joe Atueyi wrote: No matter how Lagos state Government wants to spin this, the bottom line is that LCC owned by the god in Bourdillon is cashing out early — given the political uncertainties of not controlling Lagos post 2015.
How does it make any economic sense to borrow N87 billion naira to pay off a concessionaire?
Just imagine the alternatives that N87 billion can deliver the tax paying citizens of Lagos:
1) It can turn LASU to a world class university.
2) At N8 million per school, it can turn the infrastructure of 1,000 state primary schools into the type of fee paying primary schools that those transferring these humongous sums to private pockets send their children to.
3) This sum can build a world class fee-paying medical centre in Lagos that will pay itself from those travelling to India or Dubai for medical solutions.
4) It can go a long way in funding the completion of the Light rail project etc etc
If the contract with LCC allows them to raise the toll and LASG feels that the increased toll ill be too much of a burden on its citizens, it can choose to bear the incremental toll. This burden will per vehicle using the road and spread over 30 years.
Once again every tax paying Lagosian ought to rise up against this crazy attempt to transfer N87.5 billion of our monies to private pockets and leaving our children with a debt burden to pay off.
Let LCC recover their investment over the contracted period, Joe Atueyi said.
State Commissioner for Budget and Economic Planning, Ben Akabueze, who led a team of the State Executive Council to present the request of government for approval of supplementary budget also confirmed Lagos State position at the House of Assembly on Tuesday.
In his presentation to the lawmakers, Akabueze said “the principal basis for the supplementation of 2013 budget was due to the decision to acquire the 100 per cent concession of the Eti-Osa-Lekki-Epe expressway and have it entirely under the control of the state government.”
The commissioner said the current economic condition of the state was better than what it was about 10 years ago when it entered into the concessioning of the N50 billion worth of expressway.
Meanwhile, a source close to the Governor’s Office said on Wednesday that the decision, coming just two years into the 30-year Build, Operate and Transfer agreement to upgrade, expand and maintain the about 50-kilometre road which generated heated controversy on commencement, was not unconnected to the 2015 elections in the state.
“This is perhaps for me a good strategy by the government. In the first instance, this would put power back in their hands to control the rate of the toll and they can decide to halt it or suspend it at any time since they have the 100 per cent rights.
“Again, you will recall that the 2015 elections are around the corner and the opposition is looking to cash in on the controversy the toll generated in 2011 to smear the name of the APC since it would be a level playing field for all the contestants this time,” the source said.
Meanwhile, Lagos State Government stated on Wednesday that “it has neither terminated nor cancelled the Concession Agreement it entered into with the Lekki Concession Company Limited (LCC) to reconstruct and expand the 49.36 km Eti-Osa Lekki-Epe Expressway.”
To set the records straight, the Government said it is “engaged in buying back the rights pertaining to the concession ahead of the 30-year period stipulated in the Design, Build, Operate and Transfer (DBOT) Concession Agreement. This is to be achieved by purchasing all the shares in LCC.”
“The State Government came to this decision to buy back the rights in the light of several developments clearly not envisaged in the 2006 Concession Agreement (which became effective in 2008).”
The statement said given the pioneering nature of the concession, some underlying assumptions and market indicators under which the transaction was concluded had since drastically changed in a manner that it can no longer be sustained in its current form.
It said the significance of the buy-back, “is that it allows the Government to take full control over the determination of the toll rates in order to continue to make it affordable for road users. The LCC shall therefore continue to operate as a fully commercial entity for the benefit of taxpayers and the larger society.
“More importantly, it would also preserve the ability of the Government to complete and deliver the infrastructure by direct budget funding, which was also one of the reasons for the presentation of the Year 2013 Budget Re-Ordering to the State House of Assembly.
However, in spite of government’s latest decision, Lagos based human rights activist and constitutional lawyer, Ebun-Olu Adegboruwa, on Wednesday vowed to continue with his various suits pending in court in respect of the Lekki-Epe concession deal between the Lagos State Government and the Lekki Concession Company Limited (LCC).
Reacting to the termination of the concession contract, Adegboruwa accused the Lagos State House of Assembly of deceit, asking why the lawmakers failed to act promptly until the LCC had almost milked the people dry.
He stressed that whereas the termination may seem a commendable action by government, there are strong points to prove that there “is more to this issue than meets the ordinary eyes.”
The lawyer recalled: “Indeed, the people and residents of Lagos had stoutly resisted this callous exploitation by the LCC and LASG, whereby brute force was unleashed on all of us that dared to speak against it.
“I believe the House of Assembly of Lagos is on a journey of deception. Why wait this long, after LCC had almost milked the people dry?
“This matter goes beyond the surface revocation of the concession. The major issue is that the road concession was a fraud on the people and residents of Lagos.
“Till now, the road construction, of 49 kilometres to Epe, has not extended up to Ajah, leaving people to contend with unending traffic gridlock every day, paralysingly business and movement,” Adegboruwa stressed.
Lagos State chapter of the Peoples Democratic Party (PDP) also described the decision by the Lagos State Government to terminate the concession agreement with the LCC as a ploy to redeem its already battered image ahead of the 2015 general elections.
Speaking in chat with Daily Independent, the party chairman, Tunji Shelle, said the state government had realised the fact that it made a costly mistake by concessioning a residential area and has, therefore, decided to right the wrong by terminating the concession pact.
He added that the decision will not change the mindset Lagosians already have of the state government, especially given the fact that the government has failed to provide an alternative route for those who may not want to use the toll gate.