Lagos-Ibadan Expressway: The road ahead By Femi Macualay

Lagos-Ibadan ExpresswayAs a metaphor for the journey of life, the road is both interesting and intriguing. Two notable writers were fascinated enough to focus on the road: Nigerian Nobelist Wole Soyinka created a 1965 drama titled “The Road”, while American novelist Jack Kerouac produced a 1957 novel titled “On The Road”.

Between August 19 and 22, the Lagos-Ibadan Expressway occupied my thoughts. I found myself thinking about the long road on my way from Lagos to Osogbo, Osun State, to eyewitness the celebration of Susanne Wenger’s centenary, the Osun-Osogbo Grove’s 10th anniversary as a World Heritage Site and the finale of the Osun-Osogbo Festival. On my way back to my base, after a stopover at Gbongan to take part in a celebration of the departed parents of a literary mentor, I used the same long road.

The ongoing reconstruction of the Lagos-Ibadan Expressway complicated my journey to and fro, which set me thinking about this important road and its complications. It is two years since the administration of former president Goodluck Jonathan in July 2013 rearranged the reconstruction, following a N167 billion contract, awarded to Julius Berger Nigeria Plc and Reynolds Construction Company Limited. Under the new arrangement, two sections of the expressway will be reconstructed: Section I (Lagos to Sagamu Interchange) and Section II (Sagamu Interchange to Ibadan).

The Lagos-Ibadan Expressway, which dates back to 1978, is 127.6-km-long, connecting Ibadan, the capital of Oyo State, and Lagos State, Nigeria’s economic capital. Importantly, the road is not only a main link to the northern, southern and eastern regions of the country; it is the busiest inter-state road.

Understandably, its connective capacity has implications for road improvement and development, which explains public concern about its state. The news that Julius Berger Nigeria Plc will resume major repair work on the expressway by the end of September, after a worrying break that lasted some months, raised more questions than answers. The pause was caused by financial difficulties allegedly connected with the Federal Government’s funding performance.  It is unclear whether the problematic funding issues have been resolved and how, considering that a new central administration under President Muhammadu Buhari is in charge.

It is noteworthy that the Lagos-Ibadan Expressway has been a road of controversy, especially following the Jonathan administration’s 2012 termination of a concession agreement with Bi-Courtney Highways Services Limited (BCHSL), which was supposed to reconstruct and manage the toll road. The past government alleged that the company failed to make progress on actualising the objective of the concession four years after the agreement signed with a preceding administration.

According to Bi-Courtney, “We are in court because the alleged cancellation of the concession did not follow due process. Apart from that, the so-called contract involving the two new companies handling the project was awarded arbitrarily without a bidding process.”  The company said:  “BCHSL won the concession to reconstruct and manage the toll road for 25 years. It’s a Design, Build, Operate and Transfer (DBOT) arrangement. According to the concession agreement, the road will be expanded to 10 lanes from Lagos to Sagamu and six lanes from Sagamu to Ibadan. Because of this expansion, structures that fall within 60.35 metres from the median on both sides of the road will be demolished, and government will compensate owners of the affected properties.”  The company proudly argued that it rebuilt the Murtala Muhammed Airport (MMA2) in Lagos “against all odds”. “It is the first airport in Africa to be owned by a private company on a Build, Operate and Transfer (BOT) basis, the first of its kind in Nigeria, and it was delivered far ahead of schedule,” Bi-Courtney said.

The company’s response to the allegation of non-performance blamed work delay on the Jonathan administration. In the period of three years and six months that the company had the concession, it was slowed down for two years and 10 months. According to the company, the design process which was expected to be completed within four months took 18 months as a result of bureaucratic bottlenecks at the Ministry of Works. The Infrastructure Concession Regulatory Commission (ICRC) corroborated Bi-Courtney’s position.

To cut a long story short, it would appear that the announced cancellation of the concession by the Ministry of Works on November 19, 2012, was the culmination of a chain of untidy and unprogressive manoeuvres that suggested behind-the-scenes influence.  While the delay lasted, Bi-Courtney said, “We were advised by the ministry not to do any serious works on the road other than palliatives”.  Before the concession was terminated, the company claimed it “had completed the patching and overlaying of bad portions of the highway, preparatory to full-scale reconstruction”.

It is interesting to note that the ongoing contract involving Julius Berger Nigeria Plc and Reynolds Construction Company Limited is fundamentally different in nature and not a concession as was the case with Bi-Courtney. The implication is that the federal government is expected to fund the road rehabilitation and operate the toll road.

Of course, it is open to debate whether adopting the concession model for the rehabilitation of the expressway promises greater socio-economic benefits than the old way of doing things. However, the attraction of the Public-Private-Partnership (PPP) approach, which the concession concept represents, cannot be reasonably discounted in a modern economy, considering reported examples in Western Europe and the U.S. where private investors are involved in infrastructure development based on concession agreements.

The PPP appeal is interestingly reinforced by a recent report: “Contractors handling over 184 federal road projects have abandoned the various sites due to lack of funding from the Federal Government and the huge debt owed them by the Federal Ministry of Works.”  The Lagos-Ibadan dual carriageway was listed among the roads affected by the funding problem. According to the report, “The contractors said they were owed over N600bn, adding that although part of the sum was owed by state and local governments, over 80 per cent of the amount was owed by the Federal Government.”

This kind of abandonment seems less likely under a concession arrangement that requires the concessionaire to raise funds for the concerned project, rather than wait for government funding that may make a mess of the project, particularly in the context of dwindling government revenue.  Certainly, there is a price to be paid. But if PPP works for infrastructure development, the socio-economic benefits may well be worth the price.