This was even as the state House of Assembly approved the 2013 supplementary budget of N7.5bn to enable the state government fund the acquisition of the existing concession right of the expressway.
With the development, residents and motorists may no longer pay the toll to access the multibillion naira road or abide with a new toll fee that may be fixed by the state government.
The decision of the government followed the approval of the lawmakers to allow the government the right to acquire the existing concession rights and toll revenue benefits held by the LCC, the concessionaire.
Lagos State Governor Babatunde Fashola had in a supplementary budget proposal letter to the State House of Assembly dated August 19, 2013, requested the House to amend the 2013 budget, owing to unforeseen developments in terms of the state’s internally generated revenue.
Fashola in the letter had said: “The proposal for further amendment is largely predicated by the need to fund the acquisition of existing concession, right and toll revenue benefit held by the Lekki Concession Company, LCC, the concessionaire for the Eti-Osa-Lekki- Epe expressway.
“This will effectively accelerate the transfer of ownership of the road to the state, leaving the state with wider policy options with regards to that important infrastructure.
“In order to address these issues, we have proposed the two-prong approach, namely, re-ordering some expenditure provisions and also direct supplementation of the year 2013 budget.
“This will entail increase in the overall budget size by N7.5bn. This is against the background of a projected shortfall of N22.5bn in budgeted internally generated revenue, IGR, which now need to be covered by the additional borrowings.”
The House, however, gave its approval for the requests in the proposal read on the floor by the Clerk, Ganiyu Abiru.
The Commissioners for Budget and Economic Planning, Ben Akabueze, Ayo Gbeleyi (Finance), and Obafemi Hamzat (Works and Infrastructure) came to defend the proposal before the House approved the amendment of the budget and re-ordered the existing revenue heads.
National Mirror noted that with the latest amendment, the revised budget had increased from N499.605bn to N507.105bn. IGR was reduced by N22.5bn and external loans of N30bn. Both have been added to Bond Issue Requirement, which now total N87.5bn.
The House approved N7.5bn to the existing internal loans of N44.419bn which now total N51.919bn and also reduced the Recurrent Expenditure from N229.729bn to N214.729bn. The capital expenditure was supplemented from N269.876bn to N292.376bn.
The supplementary, the governor noted, would commit the government to increase capital expenditure by four per cent and a reduction in recurrent expenditure by the same four per cent of the budget.
The Lekki-Epe Expressway was initially concessioned for 30 years to allow LCC recoup the N50bn expended on the construction of the project, following which the assets would be transferred to the Lagos State Government.
The project is designed to deliver essential road infrastructure and services and ease the historic traffic congestion along the Lekki peninsula corridor.
The state Commissioner for Budget and Economic Planning, Mr. Ben Akabueze, said the state government had so far committed N10bn to the 49.6klm road project.
The concession agreement was executed on April 24, 2006, and then on August 25, 2008, Governor Fashola signed four supplemental agreements with LCC to enable the company have access to long term funding for the construction of the Expressway.
In 2008, LCC received full commitment for the cost of the construction phase of the project, securing a N50bn long-term financing package with several bluechip local and international financial institutions, on terms that are acknowledged as ground-breaking for the Nigerian market.
The local investors in the projects include Stanbic IBTC, First Bank of Nigeria, and African Infrastructure Investment Managers, AIIM.
But toll collection on the road had generated criticisms and protests by some resident and human right activists on the axis, accusing government of charging fees to access their homes.
They had argued that it was fundamental role of the government to provide infrastructure. In reaction to the criticism, the state government had on December 30th 2010 suspended the collection of toll. But, Governor Fashola on November 14 2011, lifted the suspension in order to meet up with the state’s growing expenditure.
The toll fee for the vehicles Commercial (Danfo) minibuses- N80 Saloon Cars – N120 Sports Utility Vehicles (SUVs), minibuses and pickup trucks – N150 Light Trucks and two-axle buses – N250 Heavy trucks and buses with two or more heavy axles –N350 among others charges.
Fashola said the decision was sensible and necessary in order to maintain much needed and growing investor confidence in Lagos economy, adding that the decision was to maintain the state credit rating and reduce its credit risk. This, he said, is critical to maintaining the stream of emerging investments required to create business opportunity and jobs for young people.
Source: National Mirror
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