Confusion over Lagos-Ibadan Expressway project

There are indications that work may not resume soon on the suspended reconstruction of the Lagos-Ibadan Expressway as a recent court injunction against the project has continued to deter the contractors and new investors.

Although a source at the Federal Ministry of Power, Works and Housing said on Sunday that the minister, Mr. Babatunde Fashola, met with the Chairman, Bi-Courtney Highway Service, Dr. Wale Babalakin, on the possibility of resolving the court issue, there were no signals that the meeting achieved anything meaningful.

Beyond the court injunction, the two contractors handling the project, Julius Berger Plc and Reynolds Construction Company (Nigeria) Limited, according to sources, are also not willing to return to the sites unless they are paid for the work already done.

A Federal High Court in Lagos had in December last year granted an order of mandatory injunction sought by Bi-Courtney Highway Services Limited in suit number FHC/L/CS/727/2015, setting aside a concession agreement granted Motorway Assets Limited to finance the project and operate it.

The court held that the concession agreement purportedly signed between the Federal Government and MAL on January 16, 2015 was a flagrant disregard of the established principles of law.

The government had on November 19, 2012 terminated its initial concession agreement with Babalakin’s Bi-Courtney on the grounds that it could not make any appreciable progress three years after it was granted the contract to rebuild and manage the road for 25 years.

Julius Berger and RCC Nigeria were directed to take over the work. And former President Goodluck Jonathan inaugurated the reconstruction project in July 2013, giving the contractors four years to complete it at a cost of N167bn.

Delay in getting funds for the project had stalled the reconstruction effort and this dragged for a considerable time until The Infrastructure Bank Plc was drafted to facilitate the finance arrangement.

The Managing Director, TIB, Mr. Adekunle Oyinloye, had said that the bank had raised N50bn as the first tranche of the N167bn required for the project and named the commercial banks involved in the financing as Access Bank, Ecobank, Diamond Bank and Standard Chartered Bank Plc.

A source at the Presidency said on Sunday, “Until the court injunction is vacated there is nothing we can do.”

The source also said that the risk level was too high for the new investors coming into the project, and stressed the need for the administration of President Muhammadu Buhari to fully understand what was on the ground in order to take the right decision.

Several sources said a meeting recently held between Fashola and Babalakin on the court injunction.

The Special Assistant on Media to Fashola, Mr. Hakeem Bello, could not give details of what transpired at the parley and referred The Punch to one Mr. Ibe, an engineer at the Federal Ministry of Works in charge of the project.

Ibe confirmed that the government owed the two contractors working on the road, adding that it was only after the 2016 budget had been passed that payment could be made for the job done.

He expressed the hope that the road project would resume before February, provided the amount approved for it in the budget would be enough to take care of the debts and new bills for the year.

Officials at the Works segment of the ministry could also not tell when work would recommence on the road project.

They said that the Federal Government was working out ways to pay its debt to contractors.

A senior official said, “The minister talked about that road during his maiden press conference. He made it clear that the rehabilitation of that road was among the priority projects of the government and was working towards that. But I think what the government wants to settle, which the minister also talked about, is the debt owed the contractors.”

In the concession agreement with Bi-Courtney Highway Services, which was terminated on November 19, 2012, the firm was to expand the lanes to 10 from Lagos to Sagamu, and six lanes from Sagamu to Ibadan. It was also expected to build trailer parks and five interchanges among other things at a cost of N89.5bn.


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