The LASG has acquired the concession of the Lekki-Epe Expressway as the investors were planning to increase the toll due to rising interest rates on local loans.
With the recent development,the LASG will fix the toll fares for vehicles while LCC will continue to maintain the road.
Read report after the cut................
The Lagos State Government on Wednesday said it decided to intervene in the management of the Lekki-Epe Expressway in order to have total control of the toll rates being charged users of the road.
Although it said the concessionaire, Lekki Construction Company, would still be involved in the management of the road, the government would solely fund the completion of the project and determine the toll rates, having bought back the rights of the company.
The explanation was contained in a statement jointly signed by the Commissioners for Finance and Justice, Mr. Ayo Gbeleyi and Ade Ipaiye, respectively.
The government said in the statement, “The LCC, which is the special purpose vehicle representing the investors, formally brought it to the attention of the state government that given the rapid rise in interest rates on local loans and other cost parameters, it was compelled to raise tolls currently being charged at the Toll Plaza One from N120 to N144 per car.
“The concessionaire also brought it to the attention of the state government that as provided for under the agreement, tolling would have to commence at Toll Plaza Two. In addition, the concessionaire indicated that unless it realised more income from increased rates at Toll Plaza One and commenced tolling at the same rate per car at Toll Plaza Two, it would not be able to meet its commitments to investors in the project and continue to fund the completion of the remaining sections of the road.”
The concessionaire, it stated, was also ready to commence the construction of the third plaza for toll collection to ensure the continued viability of the project.
The government explained, “The significance of the buy-back, for which the state government deserves commendation, 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 will 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.”
Governor Babatunde Fashola had, through a letter dated August 19, 2013, which he sent to the Assembly, requested a supplementary budget of N7.5bn to fund the acquisition of the existing concession, right and toll revenue benefit held by the LCC.
The Assembly approved the supplementary budget on Tuesday.
The government said on Wednesday that the buy-back arrangement was not a unilateral action, adding that the decision was taken after due consultation with the stakeholders, and that the option was provided for in the concession agreement.
Meanwhile, a civil rights activist and lawyer, Mr. Ebun Olu-Adegboruwa, said in a statement on Wednesday that he would not withdraw the suit he filed against the state government and the LCC on the project unless the details of the concession agreement were made public and the road made toll-free.
“The major issue is that the road concession was a fraud on the people and residents of Lagos. Till now, the road construction of over 49 kilometres to Epe has not extended up to Ajah, leaving the people to contend with unending traffic gridlock every day, paralysing businesses and movements,” he said.
Olu-Adegboruwa urged the Lagos State House of Assembly to set up a judicial commission of enquiry to probe the project and called for its re-awarding.
One of our correspondents, who visited the Admiralty Toll Plaza I on Wednesday, observed that representatives of the concessionaire were still collecting tolls on the road.
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