Fresh court documents obtained by Saharareporters has found out how Nigeria's most corrupt Attorney General, Michael Aondoakaa participated in the controversial handover of the General Aviation Terminal (GAT) of the Murtala Mohammed Airport in Lagos.
Mr. Aondoakaa, our impeccable source revealed, took huge bribe money from Mr. Wale Babalakin, the chairman of Bi -Courtney, the company now reputed for building sub-standard structures. Aondoakaa had worked with Bi-Courtney Aviation Services Limited to grant the company a 36-year concession to run the domestic wing of the Murtala Mohammed Airport after Bi-Courtney presented a carefully manipulated lease agreement that extended its tenure from 12 to 36 years.
During the Obasanjo's administration, Babalakin got Femi Fani Kayode to recommend that his lease on the airport be extended from 12 years to 36 years, but that proposal was rejected, but our sources revealed that Femi Fani Kayode did not reverse the lease agreements, leaving Bi-Courtney to use Aondoakaa to legitimize it.
Aondoakaa, after receiving N400 million from Babalakin, got Bi-Courtney to sue his office for breach of contract after claiming that it had the right to manage both the MMA2 and the GAT for 36 years starting from April 2004.
Curiously, Bi-Courtney did not include the Federal Aviation Authority of Nigeria (FAAN) and other agencies involved in airport management as well as affected airlines involved in the lawsuit even though its initial lease agreement was signed between FAAN and Bi-Courtney/ Stabilini Visioni. That strategy was deliberate. FAAN would have contested the lawsuit, but Aondoakaa's refused to diligently defend his office when put on notice about the suit. Aondoakaa sent his aide, a controversial lawyer, Anthony A Malik to pursue the case. But it was so poorly done that Justice Anwukere Chikere reflected his poor performance in the case note on page 22 in her ruling. Noting that the AGF, the sole defendant in the matter, did not contest Bi-Courtney's pleadings and averments.Lack of diligent prosecution was deliberate
Bi-Courtney then obtained a court judgement allowing it to forcefully take over GAT in a secret ceremony that had the airport workers protesting. The worker’s protests temporarily yielded some positive results, as the office of the National Security Adviser intervened and suspended the Bi-Courtney agreement but as soon Yar'adua returned from his sick bed in Saudi Arabia he reversed the decision of the NSA and ordered that Bi-Courtney take over the local wing of the Murtala mohammed airport in Lagos State.
The judgement also imply that the Lagos state government could operate airports in the state except Bi-Courtney allows it.
Culled from Saharareporters
Showing posts with label Bi-Courtney. Show all posts
Showing posts with label Bi-Courtney. Show all posts
Saturday, October 17, 2009
Friday, September 25, 2009
How Aondoakaa sold MMA to Wale Babalakin's Bi-Courtney
In another of the mind-boggling manipulation and corruption stories involving the Attorney General, Saharareporters has found his hand in the controversial handover of the General Aviation Terminal (GAT) of the Murtala Mohammed Airport in Lagos.
Mr. Aondoakaa, our impeccable source revealed, took huge bribe money from Mr. Wale Babalakin, the chairman of Bi -Courtney, the company now reputed for building sub-standard structures. Aondoakaa had worked with Bi-Courtney Aviation Services Limited to grant the company a 36-year concession to run the domestic wing of the Murtala Mohammed Airport".
During the Obasanjo's administration, Babalakin got Femi Fani Kayode to recommend that his lease on the airport be extended from 12 years to 36 years, but that proposal was rejected.
In came Aondoakaa, who, after receiving N400 million from Babalakin, got Bi-Courtney to sue his office for breach of contract after claiming that it had the right to manage both the MMA2 and the GAT for 36 years starting from April 2004. Curiously, Bi-Courtney did not include the Federal Aviation Authority of Nigeria (FAAN) in the lawsuit. That strategy was deliberate. FAAN would have contested the lawsuit, but Aondoakaa's refused to diligently defend his office when put on notice about the suit.
Bi-Courtney then obtained a court judgement allowing it to forcefully take over GAT in a secret ceremony that had the airport workers protesting. The worker’s protests have so far yielded some positive results, as the office of the National Security Adviser has intervened and suspended the Bi-Courtney agreement until Yar'adua returns from his sick bed in Saudi Arabia.
Only last week, the Coalition Against Corrupt Leaders (CACOL), an umbrella body made up of 35 organizations fighting corruption in the country, joined the growing nationwide clamour for Aondoakaa to be relieved of his position. In a letter to Yar’Adua, it said CACOL had found the Attorney General “to be roguish, corruptible, insensitive and incompetent either as a Minister in any Ministry or (as) the Attorney-General.”
The letter was copied to the President of the Senate; the Speaker of the House of Representatives; the Minister of Justice and Attorney-General of the Federation (the position Aondoakaa officially occupies); the Chairman of the National Judicial Commission; and the President of the Nigerian Bar Association.
Culled from Saharareporters
Mr. Aondoakaa, our impeccable source revealed, took huge bribe money from Mr. Wale Babalakin, the chairman of Bi -Courtney, the company now reputed for building sub-standard structures. Aondoakaa had worked with Bi-Courtney Aviation Services Limited to grant the company a 36-year concession to run the domestic wing of the Murtala Mohammed Airport".
During the Obasanjo's administration, Babalakin got Femi Fani Kayode to recommend that his lease on the airport be extended from 12 years to 36 years, but that proposal was rejected.
In came Aondoakaa, who, after receiving N400 million from Babalakin, got Bi-Courtney to sue his office for breach of contract after claiming that it had the right to manage both the MMA2 and the GAT for 36 years starting from April 2004. Curiously, Bi-Courtney did not include the Federal Aviation Authority of Nigeria (FAAN) in the lawsuit. That strategy was deliberate. FAAN would have contested the lawsuit, but Aondoakaa's refused to diligently defend his office when put on notice about the suit.
Bi-Courtney then obtained a court judgement allowing it to forcefully take over GAT in a secret ceremony that had the airport workers protesting. The worker’s protests have so far yielded some positive results, as the office of the National Security Adviser has intervened and suspended the Bi-Courtney agreement until Yar'adua returns from his sick bed in Saudi Arabia.
Only last week, the Coalition Against Corrupt Leaders (CACOL), an umbrella body made up of 35 organizations fighting corruption in the country, joined the growing nationwide clamour for Aondoakaa to be relieved of his position. In a letter to Yar’Adua, it said CACOL had found the Attorney General “to be roguish, corruptible, insensitive and incompetent either as a Minister in any Ministry or (as) the Attorney-General.”
The letter was copied to the President of the Senate; the Speaker of the House of Representatives; the Minister of Justice and Attorney-General of the Federation (the position Aondoakaa officially occupies); the Chairman of the National Judicial Commission; and the President of the Nigerian Bar Association.
Culled from Saharareporters
Tuesday, September 22, 2009
FG, Bi-Courtney and the General Aviation Terminal
As we know, in 2003 the Obasanjo regime signed a Build, Operate and Transfer (BOT) Public-Private Partnership (PPP) contract with Bi-Courtney Aviation Services Limited (BASL) for the construction of the second terminal at Murtala Mohammed Airport (MM2). The new airport terminal was opened in 2007. However following the approval of the PPP agreement, the status of the General Aviation Terminal (GAT) – whether or not it’s part of the agreement - has been subject of controversy. But after years of argy bargy and legal fireworks, the FG finally handed over the General Aviation Terminal of the Murtala Mohammed International Airport to BASL.
Stakeholders in the Aviation industry have expressed their concern on the government decision. According to the National Union of Air Transport and Engineers (NUATE), the handover of the terminal by the FG to BASL was undertaken without regard for “rule of law” and “due process”. In protest, the Union threatened to shut down the terminal, noting that the handover will inevitably result in job losses. In the same vein, Arik Air through its Counsel Chief Assam E. Assam, told newsmen that the airline – who operates 50% of domestic flights in Nigeria - might stop operation because it could not operate in any facility that is “under the control and monopolistic management of Bi-Courtney Aviation Services”. FAAN on its part is had held the position that GAT was not part of the property given to Bi-Courtney in the PPP agreement it has with the organization and had sided Arik Air in the struggle to retain GAT as FAAN entity as it has been the major source of revenue to the agency. According to FAAN, the handover of the GAT would result in about 40% shortfall in revenue for FAAN.
Based on the foregoing, it is evident that all is not well with the MMA2 PPP Agreement. I have always expressed my concerns about how PPP contracts are negotiated in Nigeria. I have specifically queried the purpose of the exclusivity clause in the MMA2 PPP Agreement –which is also been contested by FAAN, - that prohibits development of an airport in Lagos for 36 years. Many have disagreed with my viewpoint on this issue. Some have argued that it is in the “commercial interest” of BASL to have such a clause (i.e protect its investment). Some even insinuated that I have a personal grouse with BASL. Firstly, l will state categorically that I do not have any personal issue with BASL. I respect and appreciate BASL position as a commercial entity that is looking to maximise its opportunities and protect its financial investment. And if I were in their shoes, I would probably be seeking the inclusion of such a clause, if not more. However, my criticism is directed to the government for their ignorance and short-sightedness in agreeing to such a clause. The inclusion of such a clause in contractual agreement does not encourage competition. It only creates a private monopoly, and does not offer consumers “value for money”. The role of the government is to make sure that public interest in protected in signing such contracts. The clause also does not offer any incentive for BASL to be innovative. With guaranteed income for 36 years and no other competing airport, passengers and airline operators can be expected to be at the mercy of BASL.
Also, such a clause makes mockery of the government so-called Vision 2020. How can nation that intends to be one of the world’s top 20 economies prohibit airport development for 36 years? How can an aspiring G20 nation prohibit airport development in a city predicted to emerge as the third largest city in the world with a population over 20 million people by 2015? Whatever anyone thinks, I’m of the view that this sort of arrangement cannot be right.
In terms of the GAT handover and threats from Arik Air and NUATE, there are few questions which need to be answered by the FG. FAAN denied that GAT was part of the PPP contract, and its handover means loss of revenue. My question is, as a major stakeholder, what was the role of FAAN in the contract negotiation? Was the decision to concession GAT as part of the MMA2 contract taken unilaterally by the FG without following due process? Who were the government advisers on the contract? Arik Air also threatened to halt its operations. But since the PPP agreement predates the commencement of Air Arik operations, was Arik Air not advised of the PPP agreement and imminent transfer to BASL? As for NUATE, did the FG consult with the Union during the contract negotiation?
Whatever be the case, there are important lessons to be learnt from the MMA2 Agreement. One of the keys to success of any PPP is “communication”. It is inevitable that more people will be affected by a partnership than just the public officials and the private-sector partner. Affected employees, the portions of the public receiving the service, the press, appropriate labour unions and relevant interest groups will all have opinions, and frequently significant misconceptions about a partnership and its value to all the public. It is therefore important to communicate openly and candidly with these stakeholders to minimize potential resistance to establishing a partnership. If the FG has taken its time to educate all stakeholders, then the reported protest by Union wouldn’t arise. Also, there would not be the need for the threats from Arik Air.
The government should also implement mechanisms that will guarantee transparency at all stages in the tendering process. These mechanisms must include setting procurement specifications, open public hearings for major government contracts, and the final selection of contractors; and Involvement independent agencies to oversee the bidding process. Unfortunately most of the PPP contracts in Nigeria are announced on the front pages of newspapers. The process of awarding these contracts is shrouded in secrecy. A classic example is the Lagos-Ibadan Expressway N89billion concession contract. Up till now, the public is yet to be advised of the process that led to the selection of Bi-Courtney Ltd. Where was the tender for the procurement advertised? How many companies bidded for the contract?
Interestingly, the notion of public-private partnership has been touted in some government circles as a magic formula that will fix the country’s infrastructure blockages. The complexity of PPP contracts and the high costs involved means care should be taken in the way it is approached. PPPs are not a panacea for development. The principles that underlie successful PPPs are affordability, cost effectiveness, value for money, transparency and risk management.
Stakeholders in the Aviation industry have expressed their concern on the government decision. According to the National Union of Air Transport and Engineers (NUATE), the handover of the terminal by the FG to BASL was undertaken without regard for “rule of law” and “due process”. In protest, the Union threatened to shut down the terminal, noting that the handover will inevitably result in job losses. In the same vein, Arik Air through its Counsel Chief Assam E. Assam, told newsmen that the airline – who operates 50% of domestic flights in Nigeria - might stop operation because it could not operate in any facility that is “under the control and monopolistic management of Bi-Courtney Aviation Services”. FAAN on its part is had held the position that GAT was not part of the property given to Bi-Courtney in the PPP agreement it has with the organization and had sided Arik Air in the struggle to retain GAT as FAAN entity as it has been the major source of revenue to the agency. According to FAAN, the handover of the GAT would result in about 40% shortfall in revenue for FAAN.
Based on the foregoing, it is evident that all is not well with the MMA2 PPP Agreement. I have always expressed my concerns about how PPP contracts are negotiated in Nigeria. I have specifically queried the purpose of the exclusivity clause in the MMA2 PPP Agreement –which is also been contested by FAAN, - that prohibits development of an airport in Lagos for 36 years. Many have disagreed with my viewpoint on this issue. Some have argued that it is in the “commercial interest” of BASL to have such a clause (i.e protect its investment). Some even insinuated that I have a personal grouse with BASL. Firstly, l will state categorically that I do not have any personal issue with BASL. I respect and appreciate BASL position as a commercial entity that is looking to maximise its opportunities and protect its financial investment. And if I were in their shoes, I would probably be seeking the inclusion of such a clause, if not more. However, my criticism is directed to the government for their ignorance and short-sightedness in agreeing to such a clause. The inclusion of such a clause in contractual agreement does not encourage competition. It only creates a private monopoly, and does not offer consumers “value for money”. The role of the government is to make sure that public interest in protected in signing such contracts. The clause also does not offer any incentive for BASL to be innovative. With guaranteed income for 36 years and no other competing airport, passengers and airline operators can be expected to be at the mercy of BASL.
Also, such a clause makes mockery of the government so-called Vision 2020. How can nation that intends to be one of the world’s top 20 economies prohibit airport development for 36 years? How can an aspiring G20 nation prohibit airport development in a city predicted to emerge as the third largest city in the world with a population over 20 million people by 2015? Whatever anyone thinks, I’m of the view that this sort of arrangement cannot be right.
In terms of the GAT handover and threats from Arik Air and NUATE, there are few questions which need to be answered by the FG. FAAN denied that GAT was part of the PPP contract, and its handover means loss of revenue. My question is, as a major stakeholder, what was the role of FAAN in the contract negotiation? Was the decision to concession GAT as part of the MMA2 contract taken unilaterally by the FG without following due process? Who were the government advisers on the contract? Arik Air also threatened to halt its operations. But since the PPP agreement predates the commencement of Air Arik operations, was Arik Air not advised of the PPP agreement and imminent transfer to BASL? As for NUATE, did the FG consult with the Union during the contract negotiation?
Whatever be the case, there are important lessons to be learnt from the MMA2 Agreement. One of the keys to success of any PPP is “communication”. It is inevitable that more people will be affected by a partnership than just the public officials and the private-sector partner. Affected employees, the portions of the public receiving the service, the press, appropriate labour unions and relevant interest groups will all have opinions, and frequently significant misconceptions about a partnership and its value to all the public. It is therefore important to communicate openly and candidly with these stakeholders to minimize potential resistance to establishing a partnership. If the FG has taken its time to educate all stakeholders, then the reported protest by Union wouldn’t arise. Also, there would not be the need for the threats from Arik Air.
The government should also implement mechanisms that will guarantee transparency at all stages in the tendering process. These mechanisms must include setting procurement specifications, open public hearings for major government contracts, and the final selection of contractors; and Involvement independent agencies to oversee the bidding process. Unfortunately most of the PPP contracts in Nigeria are announced on the front pages of newspapers. The process of awarding these contracts is shrouded in secrecy. A classic example is the Lagos-Ibadan Expressway N89billion concession contract. Up till now, the public is yet to be advised of the process that led to the selection of Bi-Courtney Ltd. Where was the tender for the procurement advertised? How many companies bidded for the contract?
Interestingly, the notion of public-private partnership has been touted in some government circles as a magic formula that will fix the country’s infrastructure blockages. The complexity of PPP contracts and the high costs involved means care should be taken in the way it is approached. PPPs are not a panacea for development. The principles that underlie successful PPPs are affordability, cost effectiveness, value for money, transparency and risk management.
Sunday, May 17, 2009
Bi-Courtney and MMA2 Terminal - What a Mess!
Recent revelations about the details of the MMA 2 Terminal Private-Public Partnership (PPP) agreement between the Federal Government and Bi-Courtney Aviation Services are disheartening – to say the least. Following my observation of the PPP contracts signed to date, I have come to a conclusion that the Nigerian PPP framework has been designed to legitimise state corruption. In this current climate of overwhelming infrastructure need, the government is using PPP to enrich few individuals at the expense of the general public. I’m now beginning to ask myself where public interest lies in all this.
As some of you maybe aware, in 2000 the Obasanjo regime signed a Build, Operate and Transfer (BOT) contract with Bi-Courtney Aviation Services for the construction of the second terminal at Murtala Mohammed Airport (MM2). The new airport terminal was opened in 2007. However, the PPP contract is now subject of controversy.
There is an ongoing row between the FG and Bi-Courtney on the duration of the PPP concession. While Bi-Courtney is insisting that it has 36 years to run the terminal, the FG through the Federal Aviation Authority Nigeria (FAAN) noted that the concession is only for 12 years. Whether it is 12yrs or 36yrs, there are other details in the contract which I find really disturbing.
According to media, the PPP contract contains an ‘exclusivity’ clause which “forbids the FG from improving or expanding the old terminal at the Murtala Muhammed Airport. And that that all scheduled domestic flights in and out of Airport in Lagos State shall during the Concession Period operate from MM2 and that no new domestic terminal shall be built in Lagos State”. The question is what is the intent of this clause?
The single most important public interest concern with PPP transactions is the inherent tension that is created when governments view t leasing of assets as a potential income source. If such PPP are properly structured, they can provide large public benefits. However, PPP contracts in Nigeria are structured to grant concessionaires substantial monopoly power, ultimately at the cost to the users of the system. The MMA2 agreement, Lekki-Epe Expressway and Lagos-Ibadan Expressway PPP contracts are no exceptions in this regard. When I raised the same issue on the Lagos-Ibadan Expressway PPP contract, some thought I had a personal ‘beef’ with Bi-Courtney Ltd. For your information, I do not have anything personal against Bi-Courtney, but I believe the right thing should be done. The exclusivity clause agreement that forbids the FG from improving or expanding the old terminal at the Murtala Muhammed Airport and prohibits construction of a new domestic terminal in Lagos State limits the prospect of competition and runs counter to the public interest.
Thank goodness that President Yar’Adua is currently reviewing the terms of the agreement. How can we be sure that corrupt individuals have not been involved in the deal? Let even assume that the concession is for 36 years. Does that mean that the govt cannot build any domestic airport in Lagos for a period of 36 years because of Bi-Courtney? Come on! So where are the public benefits? How does the govt intend to encourage competition? How can a company hold the monopoly on where local flights depart or arrive for a period of 36 years? Whoever must have advised the government to accept such a clause needs to have his head examined by a Psychiatrist.
In any public-private contractual arrangement, there is always a risk of corruption. For agreement like these and many other where large of amount of money or lengthy concession period are involved, such risk must be well managed. The govt has however failed to run open and transparent processes, when it comes to PPP deals. PPP agreements are signed without any regard for competitive tendering or proper tender evaluation process. To put it bluntly, our PPP framework is a sham. The govt does not seek input from third parties before entering into such contracts. Legislators do not hold the executive accountable on these agreements. Most of the agreement offers little or no public benefits. Most of the PPP agreement undermine competition and lack consumer protection provisions. The agreements are only successful at mortgaging our future away to few privileged individuals.
In my opinion, all PPP agreements have so far failed. The govt needs to go back to the drawing board. In fact, we need a moratorium of PPP agreement until the govt introduces a ‘consumer and competition’ legislation. Some may argue that PPP has helped delivered some key infrastructure like the new Airport Terminal, I will note that the devil is in the detail. By the time people wake up to the reality of this daylight robbery, it might be too late.
Anyway, my advice is that in cases where a contract or concession was inappropriately awarded, members of the public needs to push for provisions that will allow for contract termination.
As some of you maybe aware, in 2000 the Obasanjo regime signed a Build, Operate and Transfer (BOT) contract with Bi-Courtney Aviation Services for the construction of the second terminal at Murtala Mohammed Airport (MM2). The new airport terminal was opened in 2007. However, the PPP contract is now subject of controversy.
There is an ongoing row between the FG and Bi-Courtney on the duration of the PPP concession. While Bi-Courtney is insisting that it has 36 years to run the terminal, the FG through the Federal Aviation Authority Nigeria (FAAN) noted that the concession is only for 12 years. Whether it is 12yrs or 36yrs, there are other details in the contract which I find really disturbing.
According to media, the PPP contract contains an ‘exclusivity’ clause which “forbids the FG from improving or expanding the old terminal at the Murtala Muhammed Airport. And that that all scheduled domestic flights in and out of Airport in Lagos State shall during the Concession Period operate from MM2 and that no new domestic terminal shall be built in Lagos State”. The question is what is the intent of this clause?
The single most important public interest concern with PPP transactions is the inherent tension that is created when governments view t leasing of assets as a potential income source. If such PPP are properly structured, they can provide large public benefits. However, PPP contracts in Nigeria are structured to grant concessionaires substantial monopoly power, ultimately at the cost to the users of the system. The MMA2 agreement, Lekki-Epe Expressway and Lagos-Ibadan Expressway PPP contracts are no exceptions in this regard. When I raised the same issue on the Lagos-Ibadan Expressway PPP contract, some thought I had a personal ‘beef’ with Bi-Courtney Ltd. For your information, I do not have anything personal against Bi-Courtney, but I believe the right thing should be done. The exclusivity clause agreement that forbids the FG from improving or expanding the old terminal at the Murtala Muhammed Airport and prohibits construction of a new domestic terminal in Lagos State limits the prospect of competition and runs counter to the public interest.
Thank goodness that President Yar’Adua is currently reviewing the terms of the agreement. How can we be sure that corrupt individuals have not been involved in the deal? Let even assume that the concession is for 36 years. Does that mean that the govt cannot build any domestic airport in Lagos for a period of 36 years because of Bi-Courtney? Come on! So where are the public benefits? How does the govt intend to encourage competition? How can a company hold the monopoly on where local flights depart or arrive for a period of 36 years? Whoever must have advised the government to accept such a clause needs to have his head examined by a Psychiatrist.
In any public-private contractual arrangement, there is always a risk of corruption. For agreement like these and many other where large of amount of money or lengthy concession period are involved, such risk must be well managed. The govt has however failed to run open and transparent processes, when it comes to PPP deals. PPP agreements are signed without any regard for competitive tendering or proper tender evaluation process. To put it bluntly, our PPP framework is a sham. The govt does not seek input from third parties before entering into such contracts. Legislators do not hold the executive accountable on these agreements. Most of the agreement offers little or no public benefits. Most of the PPP agreement undermine competition and lack consumer protection provisions. The agreements are only successful at mortgaging our future away to few privileged individuals.
In my opinion, all PPP agreements have so far failed. The govt needs to go back to the drawing board. In fact, we need a moratorium of PPP agreement until the govt introduces a ‘consumer and competition’ legislation. Some may argue that PPP has helped delivered some key infrastructure like the new Airport Terminal, I will note that the devil is in the detail. By the time people wake up to the reality of this daylight robbery, it might be too late.
Anyway, my advice is that in cases where a contract or concession was inappropriately awarded, members of the public needs to push for provisions that will allow for contract termination.
Saturday, April 18, 2009
Lagos-Ibadan Expressway Concession
The recent approval by the Federal Executive Council of the concessioning of the Lagos-Ibadan Expressway for 25 years to Bi-Courtney Nigeria is a call for sober reflection. Under the Public-Private Partnership (PPP), Bi-Courtney will invest N89 billion on rehabilitation and upgrade of the highway and recoup the cost of its investment through charging of tolls.
As we know, the concessionaire (Bi-Courtney) is not a new player in the emerging Nigeria PPP market; it currently operates a $250 million Build-Operate and Transfer (BOT) contract at the Murtala Mohammed International Airport Terminal 2 (MMA 2). The Lagos-Ibadan Road project will be done under a similar BOT deal with 100 per cent private investment funding.
On paper, this deal seems to represent a ‘win-win’ situation for all parties. The government will enjoy a 25-year rehabilitation and upgrade of arguably the busiest and most strategic federal highway without spending a kobo. Also, Bi-Courtney will enjoy a 25-year ‘monopoly’ on providing a strategic road link between the south-west and south-east region. And the average punter is also enjoying a well maintained road- albeit at a cost.
Countries all over the world are currently struggling to find private investors to fund toll roads projects due to the current global economic crisis and the unreliability of the traffic forecasts used in financial modelling of such projects. However, the Lagos-Ibadan Expressway will be a ‘money spinner’ because of its ‘monopoly’ status. So why is it a money spinner? There is currently no decent alternative route between the south-west and south-east region. There are also millions of religious worshippers who travel on this road on a weekly basis. And most importantly, there is no competing public transport system such as rail. And sadly, road public transport vehicles will also be subjected to toll charges. For me, this is probably the most viable PPP road project I have seen from an investment point of view. But whether it provides ‘value for money’ for the taxpayer is a different ball game altogether.
I have always questioned the rationale behind of some of these so-called PPP. The more I look into the details, the more disillusioned I get. Following my review of some of these PPP road projects and the emerging trends, I have come to a conclusion that PPP is now becoming a mode for ‘legalised’ corruption. Most of these PPP contracts lack transparency. As an example, I can’t remember seeing the public ‘Call for Tenders’ for the Lagos-Ibadan Expressway anywhere. We only got to know it’s been approved on the front pages of the newspapers. How can a contract of N89 billion not follow any ‘due process’. And if it did, we are yet to know how many investors put in a bid. Or was Bi-Courtney the sole bidder? Or are you telling me that the public procurement rules in Nigeria allows a contract of N89 billion to be awarded on the basis of ‘sole-invitation’? These issues bring me back to the issue of ‘value for money’. And the question remains, when due process is not followed, how can we be sure that the taxpayer is getting value for money?
Unfortunately when these sorts of arguments are raised at public forums, you get shouted down by other members of the public for reasons I sometimes understand but do not entirely agree with. Due to the paucity in infrastructure development since independence, an average Nigerian just wants to see things done. The way and manner such projects are undertaken seems not to bother them at this stage. When you query the underlying principles of certain projects, the quick response is “at least Governor X or Minister Y is doing something, unlike in the past when nothing was done”. But does that mean we should all keep our mouth shut even if Governor X or Minister Y is mortgaging our future as a result of his/her ignorant or corrupt actions? I strongly believe that we should not sit back and allow our future to be mortgaged to few individuals under the guise of PPP.
With the specific regards to Lagos-Ibadan Project, I do not have any problem with Mr Wale Babalakin (CEO of Bi-Courtney), as he his just a businessman looking to maximise his opportunities. But we need to challenge the system that is allowing these dubious PPP contracts to perpetuate. After reading about the Lagos-Ibadan PPP, the question I asked myself was, does it mean the government cannot undertake any project? If the government has to concession all the federal highways to the private sector, then it needs to tell us what it is set up to do. They keep complaining that the cost is too much for them to bear. But that has been the excuse for the last 20 years or so. The same excuse was given for the failure of the power sector, the same excuse was given for the failure of the refineries, the same excuse is given when civil servants are retrenched, and the same excuse is currently being paraded regarding the looming removal of petrol subsidy. But it was not the case, when the Speaker of the House of Representative and Deputy purchased five bullet-proof ‘special utility vehicles’ at a cost of N300 million! A government that cannot undertake mundane tasks such as road maintenance is nothing short of a ‘failure’. I still maintain that the government cannot abdicate its statutory responsibilities. The government is set up to promote social equity and not to encourage the rise of Oligarchs.
While the government might saved itself N89 billion, someone is still picking up the cost. And that is the average Nigerian that will be using the highway on a daily basis. And let’s not be deceived, it does not mean that the savings made by the government will be used to provide key infrastructure in other sectors of the economy.
Let’s accept that the government is a ‘failure’, but why the choice of Lagos-Ibadan Expressway? Why can’t the N89 billion be invested in providing an alternative route (i.e bypass) through a PPP and tolled accordingly.
You need not to be transport specialist to know that the strategic importance of this highway has been undermined by the proliferation of religious organisations in the last 10 years or so. Vehicular accesses have provided along this corridor without any regard for highway safety and efficient movement of through traffic. The corridor is also one of the fastest growing in the country due to rapid urbanisation. For me, it is a ‘glorified’ local road. And it is difficult for the government to remedy these inherent problems now because of public outlash. How Bi-Courtney will deal with these religious organisations will be very interesting. It would have been better if this road is ‘downgraded’ and probably handed over to respective state governments. The government should have then worked in partnership with the private sector in providing an alternative. Upgrading the road to three and four lanes in each direction will only offer little benefit in the long term.
Lastly, whether we agree or not, the monopoly advantage given to Bi-Courtney will further undermine the possibility of having a decent rail system connecting Lagos-Ogun-Oyo states at least in the short to medium term. We need to understand that the more vehicles using the road, the more money Bi-Courtney makes. Do you think Mr Babalakin will support the construction of a rail line that will have a huge impact of road traffic numbers on Lagos-Ibadan Expressway. One of the unintended consequence of the government action, is the introduction of another major player that will work against (either secretly or openly) the development of a mass transit system along the Lagos-Ibadan corridor. But having invested N89 billion can he really be blamed?
As we know, the concessionaire (Bi-Courtney) is not a new player in the emerging Nigeria PPP market; it currently operates a $250 million Build-Operate and Transfer (BOT) contract at the Murtala Mohammed International Airport Terminal 2 (MMA 2). The Lagos-Ibadan Road project will be done under a similar BOT deal with 100 per cent private investment funding.
On paper, this deal seems to represent a ‘win-win’ situation for all parties. The government will enjoy a 25-year rehabilitation and upgrade of arguably the busiest and most strategic federal highway without spending a kobo. Also, Bi-Courtney will enjoy a 25-year ‘monopoly’ on providing a strategic road link between the south-west and south-east region. And the average punter is also enjoying a well maintained road- albeit at a cost.
Countries all over the world are currently struggling to find private investors to fund toll roads projects due to the current global economic crisis and the unreliability of the traffic forecasts used in financial modelling of such projects. However, the Lagos-Ibadan Expressway will be a ‘money spinner’ because of its ‘monopoly’ status. So why is it a money spinner? There is currently no decent alternative route between the south-west and south-east region. There are also millions of religious worshippers who travel on this road on a weekly basis. And most importantly, there is no competing public transport system such as rail. And sadly, road public transport vehicles will also be subjected to toll charges. For me, this is probably the most viable PPP road project I have seen from an investment point of view. But whether it provides ‘value for money’ for the taxpayer is a different ball game altogether.
I have always questioned the rationale behind of some of these so-called PPP. The more I look into the details, the more disillusioned I get. Following my review of some of these PPP road projects and the emerging trends, I have come to a conclusion that PPP is now becoming a mode for ‘legalised’ corruption. Most of these PPP contracts lack transparency. As an example, I can’t remember seeing the public ‘Call for Tenders’ for the Lagos-Ibadan Expressway anywhere. We only got to know it’s been approved on the front pages of the newspapers. How can a contract of N89 billion not follow any ‘due process’. And if it did, we are yet to know how many investors put in a bid. Or was Bi-Courtney the sole bidder? Or are you telling me that the public procurement rules in Nigeria allows a contract of N89 billion to be awarded on the basis of ‘sole-invitation’? These issues bring me back to the issue of ‘value for money’. And the question remains, when due process is not followed, how can we be sure that the taxpayer is getting value for money?
Unfortunately when these sorts of arguments are raised at public forums, you get shouted down by other members of the public for reasons I sometimes understand but do not entirely agree with. Due to the paucity in infrastructure development since independence, an average Nigerian just wants to see things done. The way and manner such projects are undertaken seems not to bother them at this stage. When you query the underlying principles of certain projects, the quick response is “at least Governor X or Minister Y is doing something, unlike in the past when nothing was done”. But does that mean we should all keep our mouth shut even if Governor X or Minister Y is mortgaging our future as a result of his/her ignorant or corrupt actions? I strongly believe that we should not sit back and allow our future to be mortgaged to few individuals under the guise of PPP.
With the specific regards to Lagos-Ibadan Project, I do not have any problem with Mr Wale Babalakin (CEO of Bi-Courtney), as he his just a businessman looking to maximise his opportunities. But we need to challenge the system that is allowing these dubious PPP contracts to perpetuate. After reading about the Lagos-Ibadan PPP, the question I asked myself was, does it mean the government cannot undertake any project? If the government has to concession all the federal highways to the private sector, then it needs to tell us what it is set up to do. They keep complaining that the cost is too much for them to bear. But that has been the excuse for the last 20 years or so. The same excuse was given for the failure of the power sector, the same excuse was given for the failure of the refineries, the same excuse is given when civil servants are retrenched, and the same excuse is currently being paraded regarding the looming removal of petrol subsidy. But it was not the case, when the Speaker of the House of Representative and Deputy purchased five bullet-proof ‘special utility vehicles’ at a cost of N300 million! A government that cannot undertake mundane tasks such as road maintenance is nothing short of a ‘failure’. I still maintain that the government cannot abdicate its statutory responsibilities. The government is set up to promote social equity and not to encourage the rise of Oligarchs.
While the government might saved itself N89 billion, someone is still picking up the cost. And that is the average Nigerian that will be using the highway on a daily basis. And let’s not be deceived, it does not mean that the savings made by the government will be used to provide key infrastructure in other sectors of the economy.
Let’s accept that the government is a ‘failure’, but why the choice of Lagos-Ibadan Expressway? Why can’t the N89 billion be invested in providing an alternative route (i.e bypass) through a PPP and tolled accordingly.
You need not to be transport specialist to know that the strategic importance of this highway has been undermined by the proliferation of religious organisations in the last 10 years or so. Vehicular accesses have provided along this corridor without any regard for highway safety and efficient movement of through traffic. The corridor is also one of the fastest growing in the country due to rapid urbanisation. For me, it is a ‘glorified’ local road. And it is difficult for the government to remedy these inherent problems now because of public outlash. How Bi-Courtney will deal with these religious organisations will be very interesting. It would have been better if this road is ‘downgraded’ and probably handed over to respective state governments. The government should have then worked in partnership with the private sector in providing an alternative. Upgrading the road to three and four lanes in each direction will only offer little benefit in the long term.
Lastly, whether we agree or not, the monopoly advantage given to Bi-Courtney will further undermine the possibility of having a decent rail system connecting Lagos-Ogun-Oyo states at least in the short to medium term. We need to understand that the more vehicles using the road, the more money Bi-Courtney makes. Do you think Mr Babalakin will support the construction of a rail line that will have a huge impact of road traffic numbers on Lagos-Ibadan Expressway. One of the unintended consequence of the government action, is the introduction of another major player that will work against (either secretly or openly) the development of a mass transit system along the Lagos-Ibadan corridor. But having invested N89 billion can he really be blamed?
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