New controversies over LIE – Vanguard
The Lagos-Ibadan Expressway (LIE) has had its fair share of unearned attention from the controversies surrounding repairs of the road commissioned 36 years ago. It has degenerated to a stage that its motorable portions are like seeing oasis in the desert.
LIE is subject of more controversies after failed attempts to repair the road, including the Public Private Partnership, PPP, arrangement with Bi-Courtney Highway Services Limited that won a concession in 2009 to reconstruct, expand and modernise the expressway at a cost of N89.53bn, on a Design Build Operate and Transfer, DBOT, basis.
President Goodluck Ebele Jonathan last July 5 visited LIE to usher in 'major reconstruction work' at a cost of N187bn. A 2011 report of the Infrastructure Concession Regulatory Commission, ICRC, which Chief Ernest Shonekan, ICRC head until last year, presented to the President had identified possible failure of the LIE concession.
ICRC listed approval of design, securing the right of way, financial model and environmental and social impact assessment among challenges the project faced. Clause 6.1 of the concession agreement holds the Federal Government responsible for review and approval of design. According to ICRC report, approval for a final design was granted on 10 May 2011, two years after the concession agreement was signed. Estate valuers completed review of properties along the axis in July 2011. Compensations and relocation of PHCN facilities are still outstanding issues.
'Without an agreed design and scope of works based on the grantor's performance and output standards, there cannot be an agreed fixed cost for the project. Without a financial model setting out the expected project costs and revenues, financing costs cannot be determined,' the report said.
The Minister of Works, Mike Onolememen last week said that the Federal Government was mobilising N300bn from private investors, in a PPP arrangement, for LIE and two other major roads in Nigeria. The FG would raise only N50bn of the N169bn needed to fix the LIE, only 30 per cent of the required funding. Only N25bn can be raised this year and another N25bn in 2015 through Infrastructure Bank. Government, according to the Ministry of Works, would also provide an irrevocable guarantee in raising the funds.
Is it a PPP or concessioning? ICRC Act requires that concessionings should be advertised and due process followed in assessing proposals. Will financiers of the 70 per cent funding be selected without competitive bidding? Will funding be early enough to meet the President's 48 months delivery period? Is government aware that termination of BiCourtney's concession could stall construction? How did the cost balloon to N187bn from N89bn?
It seems LIE is in more dangers of never being executed than five years ago!