Saturday, January 18, 2014

Punch Editorial: LCC makes N15m a day on Lekki toll gate – Investigation BY KUNLE FALAYI AND TUNDE AJAJA


Liadi left his Lekki home in his SUV for Victoria Island.
He is a regular motorist who shuttles between Lekki and other parts of the Lagos Island.
But this day, he had already passed through the toll plaza at Admiralty Way before he remembered that he had forgotten a very important document which he left on his bed.
He was so furious with himself because he didn’t have any other choice but to drive back home to be able to make any headway in his business that day.

And when he thought about the rigours of passing through the toll plaza especially where he would have to queue for minutes to be able to pay his toll, he was full of regret that he still had to endure the experience.
Liadi told Saturday PUNCH, “I was stuck in traffic as a result of the gridlock at the  toll-gate at Admiralty Way for a long time around 9 am that day. I had paid my usual N150 at the toll-gate and was on my way to VI when I remembered that I had forgotten a vital document at home.



“I made a u-turn when I had the chance and was forced to pay another N150 as I went past the toll-gate again. I got the document and was on my way again. I paid another N150 as I got to the toll-gate once again and when I finally finished what I had to do in Victoria Island, I had to pay another N150 to get back home. Altogether, I paid four times that day for just a journey.  So, you can imagine how much I would part with everyday if I had a business that makes me to shuttle between VI and Lekki multiple times.
Liadi was clearly frustrated as he described this scenario.

It has been two years since the first of the toll-gates constructed by the Lekki Concession Company along the Lekki-Epe Expressway opened for business.

The opening in December 2011, which was characterised by a series of protests by residents of that part of Lagos, brought about a big change, as Saturday PUNCH would learn, in the lives of the residents, and motorists who use the route regularly.

Many people living in that part of Lagos see toll-gates on the expressway as a way of fleecing them. The message was clear in the beginning. They protested, but it would not go away.

Activist and lawyer, Mr. Ebun-Olu Adegboruwa, who led a protest against the concession of the expressway when the toll-gate was opened for business, told Saturday PUNCH that it was originally not the intention of “the fathers of our nation that the statutory power to build roads and highways will become a matter of concession to private individuals, purely for commercial exploitation and profit.”

 It was just one toll-gate when the residents protested but after Admiralty Circle Toll Plaza was inaugurated, a second one – Conservation Plaza – opened 10 kilometres away a year after. That was when it dawned on the residents that the government meant business.

However, our correspondents went to town, to gauge the mood of the people two years after and to know whether the road expansion and its toll gates had changed their lives for the better in the area.
Findings revealed a groundswell of suppressed anger among the people. They told Saturday PUNCH that the toll-gates were like humongous monster put in place solely for their discomfort.

The estimated cost of the construction of the toll-gates and the 49.63km road stretching from Ozumba Mbadiwe all the way to Epe at at 2008 was N55bn.

However, upon its launch in 2013, tolling at Conservation Toll Plaza was halted as a result of the public outcry that had greeted the opening of the first.

The residents of the area gave different reasons for seeing the toll-gates as a nuisance to their lives.
Liadi is one of such people. And stories like his are all but common.

When he was told that something surely must have improved as a result of the concession and construction of the toll-gate for motorists in the area, another resident, Ade Elegushi, answered in the negative.
He simply shot back, “Like what? Why should a toll-gate be here at all?”

He said the construction was not done according to the wish of the people.
Elegushi said, “There is no reason why a toll-gate should be here. It is a clear exploitation. Is the government saying it cannot build a standard road without tolling it? Don’t we pay our taxes?

“If good road and reducing traffic are the reasons for this toll gates, guess what, we get stuck in terrible traffic jam here everyday. This arrangement was not designed to benefit the common people, it is just for the government.

“I pass through the Lekki-Ikoyi suspended bridge everyday and pay N300 as toll each time. Sometimes I forget things at home and I am forced to pay that toll four times or more within a day. It is just absurd.”
Mr. Julius Agenmonmen, a  resident of one of the upper scale estates in Lekki, said the amount paid as toll was not the actual problem of many residents of the area. He said there had been no positive change in the traffic situation to justify the tolling on the road.

The Lekki-Epe Expressway was constructed by the Lateef Jakande administration in the 80s but was finally completed by the Mudashiru Lawal and Mike Akhigbe administration in 1987.
Agenmonmen said the major problem faced by residents of the area before the concession was the terrible traffic they had to contend with all the time.

He said, “But that situation has not changed. The road had two lanes each on both sides before the reconstruction by LCC. There used to be traffic on both sides every day. Now after the toll-gates have been put in place and the road reconstructed, the traffic jam is still there consistently.

“The tolling is supposed to be beneficial but the traffic situation is as bad as prior to the commencement of the project. What then is the justification for the tolling if our lives have not changed? Is there any other place within Lagos where there are toll-gates? You must ask yourself, why site three toll-gates in this place alone?
“As early as 6am, there is already gridlock on the road. Our problem is not about the amount we are forced to pay but the fact that the tolling is not justified. We can’t endure this for long; people will react if they are pushed to the wall.”

Our correspondents noticed that the road has three lanes on each side but only opens wider at each toll plaza.
For instance, the Admiralty Circle Toll Plaza has eight lanes on each side, making it fourteen but as one leaves the plaza, the road narrows to six lanes.
Residents said they expected that the road would have been expanded than its present state since the population of the area was still substantially limited in the 80s when the Jakande administration made it four lanes.

“The tolling was the main reason for reconstructing the road in the first place. That is why LCC only expanded it at each toll plaza,” an exasperated resident told Saturday PUNCH.
Mrs Stella Billy-Asogbon said tolling was unfair and wondered if the government imposed the tolls because some of the residents were presumed to be rich.

She said there are other roads within the state that are as good as the Lekki-Epe Expressway, adding that motorists on the Lekki road experience the same hazards and gridlock like other parts of the state.
She said, “Despite the level of publicity about the project, only one lane was added on each side of the road to make it six lanes as against the initial four lanes and it is only the collection point that has sixteen lanes.
“Anytime they want to advertise the road, they only use the picture of the toll plaza section that is wider, which was designed to accommodate many payers at a time. It seems the government is only concerned about the money it will realise and not about the comfort of the road users.”

When the toll plaza was opened for business, the government said LCC had provided an alternative route for motorists that were not interested in paying the toll.
But for many motorists in the area, the alternative route is suicidal. The regular traffic on the route makes plying it frightening.

“I have been to many countries and I know that if the government tolls a road, it would provide an alternative route which must also be good and accessible. But the one constantly referred to as the alternative route here is an existing street inside Oniru Estate, which is constantly locked in traffic,” Billy-Ashogbon said.
Private vehicle owners were not the only ones angry about the toll-gates. Commercial bus drivers, who spoke with our correspondents, said they suffer more.

Abdulrazaq Damilola who shuttles from Ajah to CMS, said he spends N1,200 each day on tolls because he shuttles at least seven times daily. That makes 14 times; he has to pay N80 at the toll-gate.
“Why can’t they make the payment once a day? Apart from that, there is usually a terrible traffic. At Ikate and Ajah, the traffic is even more intensified. These people just don’t care about the poor. They say the tolls would be collected for 30 years. So, I would have to pay tolls on this road for 30 years? That is wicked!” he said.

The initial concession arrangement between the Lagos State Government and LCC was for 30 years, meaning that tolls would be collected on the road for that period.
But in November 2013, the state government decided to reacquire the concession rights on the project at an estimated N25.3bn after N35bn was reported to have been spent on the construction of 30 per cent of the project.

Prior to that, LCC had decided to raise the toll rates. For instance, the minimum of N120 paid by a car was to be raised to N166 while tolling was to commence at the second toll plaza.
LCC had also insisted that the third toll plaza, which was part of the Design, Build, Operate and Transfer Concession Agreement, was to be constructed to commence tolling if the commitment to the investors in the project was to be met.

A joint statement by the Lagos State Commissioner for Finance,  Ayo Gbeleyi, and the Attorney-General, Ade Ipaye, in August 2013, explained that the buy-back was not a termination of the concession.
“The significance of the buy-back is that it allows the government to take full control over the determination of the toll rates in order to continue to make it affordable to road users. The LCC shall therefore continue to operate as a fully commercial entity for the benefit of taxpayers,” the statement said.
The statement had said that the buy-back was undertaken after due consultation with stakeholders based on the feedback and agitation made to the state government.

But despite this, residents like Mr. Qozeem Adeolu, cannot imagine paying tolls on the expressway for the next 30 years.
“I ride an SUV and pay N300 everyday. That is on days when I only go to the office and come back in the evening. It is sometimes more than that if I have a business that requires shuttling from Ikoyi to Lekki. It is not that I cannot afford it. But paying that for the next 30 years when I still pay my tax is unthinkable,” he said.

Commercial bus driver, Biodun Ajilu, told one of our correspondents that the toll he had to pay everyday was a sizeable chunk of his income that could have been channelled into something better.
He said, “I am not praying to drive commercial bus for the next 30 years but even if I start driving my own personal car, would it not be bad that I have to pay toll for the next 30 years?
“At the moment, I pay more than N1,000 in tolls everyday, that is apart from the fees I pay at parks and the sundry money collected by police and LASTMA from us daily.”

Even though there is no assurance that the fee would remain constant, if Ajilu pays N1,000 per day for the next 30 years, in 10 years, he would have paid over N10m as tolls.
When this calculation was relayed to him, the commercial bus driver held his head in disbelief. But he is just one of the hundreds of thousands of motorists in the area.

Millions of naira everyday
Saturday PUNCH contacted a source in LCC to find out the estimated amount of money made at the toll gate on a daily basis. The source broke it down.
She said, “We make the bulk of the money from e-tag because sometimes, some companies pay as much as N100m instalments for e-tag (the preinstalled sticker that enables a vehicle to have a free access at the toll plaza).

“At Admiralty, we have 23 functional toll booths but toll collectors log in to collect tolls in 21 booths. Each booth runs three shifts of eight hours per day and each shift realises between N120,000 and  N300,000.
“Also, Conservation has 14 toll points but there is no tolling there yet. LCC makes between N12m and N18m per day on tolls. The variation is because traffic is usually light on days like Sunday and public holidays.”

If on average LCC makes N12m per day, and this amount remains constant for the next 30 years, the government would have realised N131.4bn by the year 2038.
But Adegboruwa has a different opinion resulting  from his personal estimation of how much LCC makes.
He said, “Presently, each of the twenty two toll points on the Admiralty Plaza has dispensed over three million tickets, excluding the e-tag and other electronic modes of payment. The question then is this: Since December 18, 2011 when tolling commenced, how much has LCC recouped so far? It is roughly estimated that the Admiralty Circle Toll Plaza yields an average of  N30m per day, which is roughly about N11bn, which if continued for thirty years, will translate into N330bn. This is excluding other revenues accruing from advertisements, concessions of right of ways, etc. This is for a 49km road that has not gotten beyond Ajah area since 2003. And then you multiply this into three toll points!
“The Lagos State Government has contracted us into slavery to LCC and its sponsors.”
Each passing vehicle is made to stop at the toll booths in the second plaza, even though no tolling is being done at present. Motorists who feel frustrated by the regular gridlock there, are confused as to why they have to stop even though they are not being asked to pay.
Our source at LCC explained that each vehicle is asked to stop because LCC is calculating the amount of toll being reimbursed by Lagos State government on each motorist.
“Don’t think that LCC is losing anything. The reason vehicles have to wait is because they are recorded. For each of these vehicles, the government will pay back the toll LCC is supposed to collect,” she said.
When Saturday PUNCH got in touch with the Lagos State Commissioner for Works and Infrastructure, Dr. Obafemi Hamzat, he said the Commissioner for Finance, Mr. Ayo Gbeleyi, was in the best position to address the issues raised.
When contacted, Gbeleyi said the questions should be routed through the Commissioner for Information, Mr. Lateef Ibirogba, so that “it could be on record.”
The questions were sent to Ibirogba by text message and when he was contacted through a call, he said, “You have to come to my office if you want a response.”
Saturday PUNCH also contacted LCC headquarters for comment but a female operator said one of our correspondents should call back the following day to speak with the company’s spokesperson.
In a comment to journalists recently, Hamzat said the buy-back arrangement had yet to be finalised.
He was quoted as saying, “It is still fluid. We haven’t signed the required agreement with the LCC. We have not concluded the buy-back. It is after conclusion that the state government will be able to determine what will happen. And it is at that time we will spread everything out to the public.
“By the concessionaire agreement and the financial model, LCC is expected to have increased the toll at this time due to the exchange rate in the country.”
For Mr. Victor Odubela, who has a business with branches at Victoria Island and Ajah, and has to shuttle the two locations regularly said the buy-back arrangement only shows the confusion of the state government.
“It is just a matter of time, just like the Federal Government decided it could no longer subsidise fuel in 2012, a time will come when the state government will no longer be able to operate the second toll-gate free. It is just a ticking bomb because that’s when trouble will start,” he said.
Despite the huge amount of fund involved in the concession of the Lekki-Epe Expressway, the road has seen its share of deaths in recent times; an issue that has become a source of worry to residents of the area.
Between the first toll plaza and the second, there are three pedestrian bridges but beyond the second bridge close to Chevron, there are no other bridges.
Deaths on billion-naira road
In November 2013, three school pupils were crushed to death in Ikota, Ajah as they crossed the expressway.
Residents said that part of the expressway had become a death trap because there was no other way to cross the expressway without facing the danger constituted by speeding vehicles.
Olayinka, the commercial bus driver, who had earlier spoken with our correspondents, had also said that accidents occurred in the area regularly.
“Ikota has become a place noted for recording dead bodies of accident victims regularly. Two days ago, a young man was still hit by a speeding vehicle in the place. A few other people have been killed in that place since the school children were killed last year,” he said.
Our correspondents also noticed that a large section of the expressway did not have walkways and drainages, a reason many residents have questioned the quality of the expansion project.
However, LCC refused to comment on what it  makes daily from tolls.
The company through an electronic mail, replied to our enquiry on Friday, stating that it would not divulge this information.
“We are not at liberty to discuss publicly matters of our finances, which are considered confidential to LCC, its shareholders and its partners,” the company said.
But LCC confirmed that it had been recouping from the state government the toll it was supposed to collect motorists at the second toll plaza.
The company said, “Following Lagos State Government’s deferment of the commencement of direct tolling at Conservation Plaza in December 2012, LCC has had to rely exclusively on the state to recover the cost of passages by motorists choosing to use the Lekki Toll Road. Be advised that concessions and other PPP agreements like ours are typically structured around user-pays principles, and on ensuring that the private investor is able to recoup its investment and other costs, and make a reasonable return. If this is not the case, investors will simply either not invest in the first place, or will look to walk away from the project if they are not allowed to recoup their costs.”
The company said it regretted the inconvenience residents had been experiencing on the road, but claimed that security and its coordinated incident management had largely made the road better than it ever was.

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