More than three years after it got the contract, Bi-Courtney has lost the job to rehabilitate and manage the Lagos-Ibadan Expressway for 25 years. The jury is still out on the propriety or otherwise of the Federal Government’s action. With this development, some are wondering if there is hope in public, private partnership (PPP) in infrastructure management, writes OKWY IROEGBU-CHIKEZIE.
Public-Private Partnership (PPP) is steadily gaining ground, especially in infrastructure development and financing in strategic areas of the economy. The dust raised by the revocation of the 25-year concession of the 105-Lagos-Ibadan Expressway to Bi-Courtney Highway Services has brought to the fore the need to re-examine the PPP concept.
PPP was designed to involve the private sector in the provision of infrastructure. The concept gives room for private intervention, among others, in housing, roads, health and aviation sectors.
Bi-Courtney’s unimpressive performance on the Lagos-Ibadan Expressway that resulted in the cancellation of the over N89 billion contract and the ceding of same to two other construction firms – Julius Berger Nigeria Plc and RCC Nigeria Limited. The action by the government is to ensure that Nigerians are not unduly burdened by the inaction of our contractors.
As the Minister of Works, Mr. Mike Onolememen, explained, the contract was terminated to avoid the ‘senseless carnage on the “important expressway.” He said while Julius Berger would handle the section that spans from Lagos to Sagamu interchange, RCC Nigeria will be responsible for the section from Sagamu to Ibadan.
Reacting to the development, many said the government’s action was long overdue. They blamed the government for concessioning the road to a firm it was not sure had the financial muscle to deliver, while others argued that it may scare away the private sector from partnering with the government on such projects in the future if there are no guarantees.
An analyst, Mr. Ayodele Ibrahim, said the government should make known the terms of engagement with Bi-Courtney Highway Services and how the contract was won in the first place. He said if government wanted to encourage an indigenous company to handle such a huge project, it should have also ensured that it backed it by ensuring that the agreement didn’t fail.
His words: “Many Nigerians would prefer that the road is concessioned to a competent firm and not this emergency arrangement.”
Questioning the criteria used in selecting the new contractors, he said the unilateral decision may hamper future PPP arrangements which is a novel idea in advanced economies to drive competitive infrastructure provision.
However, Onolememen has assured that while the Federal Government would contin with non-performance on the part of the contracting party.
He said: “The legal implications of this termination have been carefully considered by both the Federal Ministry of Works and indeed the Federal Government. We have meticulously followed the concession agreement, the provision of relevant clauses of the agreement and have complied fully with the provisions of this agreement. We have had cause even in the past to write the concessionaire to detail the breaches which it had committed in this agreement and have also followed the minimum and maximum number of days the contractor was expected to remedy the situation, but failing which, the Federal Government had no alternative but to take this course of action.”
Onolememen explained that the government did not make any direct payment to Bi-Courtney in this particular transaction, saying they were supposed to raise the fund from the private sector and apply it to the construction of this expressway and toll it for twenty five years to recoup their investment.
“This has not happened and that is why the concession has been terminated. Under this concession, the construction period is supposed to last for four years and the four years will come to a close in about six months time. Right now there is nothing on ground to suggest that the company is capable,” he stated.
A Civil Engineering contractor, Mr. Adeyemi Iyiola, cautioned that the government should not be hasty in entering into agreements, especially those that impact on the lives of the people. He wondered how the concession agreement for the Lekki/ Eti-Osa road was so successfully executed and commended the state for backing the concessionaire in its trying period. He asked for a closer relationship between states and the federal government in order to learn from each other.
A surveyor Mr. Eneli Fred criticised government on the allegation of failure of the concessionaire to submit copies of the construction contract as required by in the agreement; and failure to submit copies of the Financial Agreement as provided also in the agreement. He wondered how the company survived for over three years holding on to the job if such lapses were noticed. He said: “Infrastructure financing is big business and capital intensive where due care should be taken before any commitment.”
He advised that, henceforth, concession agreements should be more concrete and all necessary information accommodated before entering into any contract to encourage private sector participation in infrastructure provision.
Eneli, however, agreed that while there is need to support local firms, the firms in turn should build competence and collaborate with international funding managers to deliver projects in any PPP arrangement with government rather than expecting hand-outs from government.
An analyst and social commentator, Mr. Ejikeme Ikediala, raised concerns on the planned concession of other federal highways including some roads by some state governments in addition to the much-touted second River Niger Bridge as to their fate. He advised government to ascertain the financial capability of prospective concessionaires before making a commitment. He said though he believes that private sector participation in infrastructure financing is the way to go, the public should not be made to pay for government’s hasty decisions in policy making.
