Home Column Snags in Public private partnership: the failed Lagos-Ibadan concession

Snags in Public private partnership: the failed Lagos-Ibadan concession

by Business News Report

Recently the media was awash with the news of the revocation of the concession granted
to Bi-Courtney to reconstruct the Lagos Ibadan road which as been in a deplorable state. The decision to revoke the concession sparked off a lot of debate as to the seriousness of government to the whole idea of Public Private Partnership. The concession of Lagos Ibadan road can not be truly described as a true public private sector partnership. It does not pass the true test of a public private sector partnership that could deliver service to the people of Nigeria and give value for money.
The concession did not follow the due process of competitive bidding, it had no adequate study of traffic flow on which to develop a bankable financial flow, and the parties to it did not resolve the right of way between the federal government, the three states of Lagos, Ogun and Oyo. It is not known that the company has undertaken a project of the magnitude anywhere before now. It had no experience on road issue. The process that gave the company the concession was fault with political patronage and the exercise was doomed to fail right from the word go. Bi-Courtney due to its inexperience in road matters and issues of Public Private Partnership took a road design from the federal government that was defective and un-bankable so it could not source international financing for the construction of the road.
The Lagos Ibadan express carriage was designed by government to be a three carriage way both side. But financials felt that the traffic from Lagos to the Shagamu exchange of the road was too heavy for a three carriage way that it should have been five. A five carriage way will allow for the high volume of traffic, save the road from the wear and tear a three way carriage will face and enable the company recoup its investment on time. But because the design has been put in place and the contract signed, changes were not immediately forth coming, so financials backed out.
It has become public knowledge that the Infrastructure Concession Commission which was set up by the government had advised against the concession but was ignored. This put a whole question mark on the sincerity of government in its desire to provide infrastructure to the Nigeria people. Unfortunately Nigerians do not hold government accountable for its action and inaction. While the deception on the reconstruction of Ibadan Lagos road is on going, the Nigerian populace is the ones that suffer and some even die on the road on daily basis. The Minister of Works Mr. Mike Onolememen was so arrogant about the whole exercise and with impunity told the nation that Julius Berger has been mobilized to cite. Onolememen, as usual, failed to tell the nation when the contract for the rehabilitation was awarded and how much it will cost to do so.

This government is pretending about the Public Private Partnership. Public procurement is the favoured way of this government doing things. Because of the high level of corruption inherent in public procurement, ministries, department and Agencies of government are favourably disposed to using in it instead of PPP. Nigerians should ask the minister of works why he failed to allow the open tender for the Lagos Ibadan road rehabilitation on the one hand and the concession of the Lagos Benin road which work has long been complete. Nigerians must ask this government to open up and direct all MDAs to send all commercially viable projects in their control to the Infrastructure Concession Commission. Nigerians are prepared to pay for service provided it is available in qualitative terms. The way the government is paying lip service to infrastructure provision, Nigeria may never get the required services. There is variety of concession and partnership arrangements.
Some of the most commonly used are Private – Concessions, where the private party takes over all aspects of facility management and operation from the government, often on a long-term basis. The private party responsibilities include maintenance and specified rehabilitation and capital investment in facility upgrades and enhancement. The private party is fully responsible for raising the required capital. This may take the form of build-operate-transfer (BOT), Build-operate-own (BOO) or build-own-operate-transfer (BOOT), design-build-operate-transfer (DBOT), design-build, finance and operate (DBFO). Other less common variants include BRT or BLT (build, rent/lease and transfer and (BTO) build transfer and operate.
PPP as it is popularly referred to has become the most widely used vehicle for social economic transformation of society both in the developed and developing economies. In Britain the system was introduced in 1992 and since then several social infrastructure has been developed through it. Incidentally, one of the chief success factors of the scheme in Britain is a Nigeria, Mr. Wale Shonibare Associate Director of KPMG in London. He has traveled to almost all the continents of the world consulting for governments on PPP.
Governments across the globe have come to terms with the fact that public sector alone can not provide the needed infrastructure and have come to the conclusion that private sector participation in the provision of infrastructure is inevitable. Nigeria can not be an exception

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