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N167b loan for Lagos-Ibadan Expressway

Barely two years after the opening of the reconstruction of the Lagos-Ibadan Expressway, the contract is stuck – no thanks to the inability of ex-President Goodluck Jonathan’s administration to fund the project.
Besides, the Infrastructure Concession Regulatory Commission (ICRC) has faulted the re-concession of the road to Julius Berger Plc and Reynolds Construction Company (RCC), despite a pending legal dispute.
There was no public bidding for the project, ICRC said.
The Jonathan administration pledged to release N50billion for the project in 2013 and 2014.
Instead, the government provided only a guarantee to Infrastructure Bank to facilitate the release of N117billion to Berger and RCC.

But the two construction giants have been unable to get up to N10billion.
The bank, it was learnt, has been trying to limit its risk exposure because of the legal tussle on the project.
A source said: “We have fresh challenges confronting the project, including alleged politicisation of the reconstruction of the 127.6kilometres expressway. I think those in Jonathan government were desperately looking for a way to win Southwest votes in the last general elections and used the project as a bait.”
The Infrastructure Bank Plc Managing Director Adekunle Oyinloye said the Federal Government had directed the bank to raise N167 billion for the reconstruction of the dual carriage way.
Oyinloye said: “The project is now to be completed in a record time of 24 to 30 months as against the 48 months initially proposed by the contractors.”
The ICRC’s objection is that the government ought to have concluded the termination of the contract with Bi-Courtney Consortium before awarding the contract.
“And any re-concession must go through public bidding. In this instance, it was unilaterally awarded by the government.
“Since the project is still in dispute between the Federal Government and Bi-Courtney, any action taken will be subjudice. Any pronouncement by a court or an arbitration court can create more hurdles for all the parties involved.
“This is the mess inherited by President Muhammadu Buhari. His administration has to find a solution to the problem or else the project will be stalled.
“At a point, the Jonathan government was confused. In one breadth, it said it had re-awarded the contract and in another, it said it had opted for Public-Private Partnership (PPP) with willing investors, Infrastructure Bank, Julius Berger Plc and Reynolds Construction.”
When a representative of one of the firms was contacted, he said: “I am driving, I will call you back.”
But the source refused to return the call.
The Federal Government in November 2012 terminated the 25-year concession given to Wale Babalakin’s Bi-Courtney Consortium for the construction and maintenance of the expressway.
The highway was conceded to Bi-Courtney in 2009 at N89.53 billion for 25 years.
The immediate past Minister of Works, Mr. Mike Onolememen, said the concession agreement was revoked due to failure of Bi-Courtney to adhere to the terms.
In June 2013, the Federal Government re-awarded the reconstruction of the Expressway to Julius Berger Plc and RCC.
In July 2013, former President Jonathan opened off the reconstruction of the expressway at N167billion with a completion timeline of 48 months.
When The Nation did an investigative report that the Jonathan government was cash strapped on the project, Onolememen embarked on a mass rebuttal.
Section 2.1 of the Nigerian Public-Private Partnerships Manual says there must be a competitive bidding for such a project.
It reads: “The project is usually initiated by a Ministry, Department, and/or Agency (MDA) of the government. In select cases, the project could be initiated by the private sector as an Unsolicited Proposal under a transparent, competitive process, which will also be managed by a MDA.
“The first step for the MDA is to develop a project concept to be approved by the National Planning Commission (for projects of the Federal Government) or other relevant State authorities.
“The project concept will usually be based on a Pre-Feasibility study or Outline Business Case, and if it is approved, will allow the project to be included in the 15-year Master Plan (or National Implementation Plan for the Federal Government) which sets out the Government’s infrastructure investment strategy covering all forms of procurement, including projects that will be financed in whole or in part from the Federal Budget.”
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