The Lagos State Government is set to go to the capital market to float a new N87.5 billion bond to buy back the concession rights of the Lekki- Epe Expressway from the Lekki Concession Company, LCC.
The Lagos State House of Assembly had on Tuesday approved the buy-back of the concession right from LCC, paving way for the government to take over the road and toll collection.

The Lekki-Epe Expressway has a contract sum of N50 billion while the LCC has 30 years concession rights under the Build, Operate and Transfer, BOT, system, that will enable the company recoup its investment plus interest.
The N87.5 billion bond to be floated in the capital market will enable the state pay off LCC and take over the construction and management of the road and collect toll on it as well as address shortfall in the state's internally generated revenue, IGR.

According to Governor Babatunde Fashola in a letter to the State House of Assembly for the approval and an amendment to the Appropriation Act 2013, "the proposal for further amendment is largely predicated on the need to fund the acquisition of existing concession rights and toll revenue benefits 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 road infrastructure." He added that, "we also need to restructure our borrowing plan as the N30 billion World Bank Development Policy Operation, DPO II, will no longer materialise in 2013. In effect, we will need to issue bonds totaling N87.5 billion this year, instead of the N35 billion originally envisaged, in order to cover the shortfall in internally generated revenue and the delay in disbursement of the DPO II, so as to be able to finance the acquisition of the concession rights and take control of the toll regime for the benefit of our citizens."
Answering questions from the lawmakers, Commissioner for Economic Planning and Budget, Ben Akabueze, said the decision to acquire the concession was for the interest of the residents of the state.

The commissioner explained that part of the plan by government for the review of the agreement with the LCC was to pay them off in order to take full possession of the road.
Akabueze noted that government had already committed about N10 billion to the funding of the project which took off in 2004 billed to cost N50 billion.
According to him, the state government would now determine how much to be paid by motorists as toll on the road instead of allowing the concessionaire to fix prices when and how it likes.

Commissioner of Finance, Ayo Gbeleyi, also told the House that under the agreement with the LCC, the concessionaire possessed the right to increase tolling on the road at any time, saying that the government had been notified of a 20 percent increase in the tolling and another five percent increase next year, adding that when the company is bought over, this would no longer be the norm.

The State House of Assembly also approved the N7.5 billion supplementary budget the government asked for. The current figure approved by the House through a law to amend the Appropriation Act scaled up to N507.105 billion from the N499.605 billion approved on 2 January, 2013. This means that the addition is to be sourced through bond issue while the initial budget figure has also been re-ordered to provide enough money for the purchase of the
company.
To attain the new figure, the House reduced the Internally Generated Revenue (IGR) in the 2013 budget by N22.5 billion. It also reduced the External Loans by N30 billion and added both figures to a bond issue requirement now standing at N87.5 billion.

Furthermore, it approved N7.5 billion addition to the existing internal loans of N44.419 billion in the 2013 budget, making it now total N51.919 billion. The House also reduced the Recurrent
Expenditure from N229.729 billion to N214.729 billion while supplementing the Capital Expenditure from N269.876 billion to N292.376 billion.

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[size=38pt]this is 419 story I hope. If that is truth.. na 419. buy back what,, when they use the money of lagos to build the road.[/size]

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End time tinz

Watch LSG come to deny it