20 November 2012

Nigeria: FG Revokes Lagos-Ibadan Expressway Concession

Photo: Leadership
Lokoja-Abuja Road Project.

Finally, Bi-Courtney Highway Services, owned by lawyer-entrepreneur, Dr. Wale Babalakin, Monday lost the concession to repair, upgrade and manage the 106-kilometre Lagos-Ibadan Expressway, a critical arterial road for travellers across the country.

The expressway was concessioned to Bi-Courtney in 2009 at N89.53 billion for 25 years.

The revocation of the concession came barely 24 hours after President Goodluck Jonathan, during a televised media chat, had expressed dissatisfaction with the pace of work by the concessionaire since the expressway was handed over to it more than three years ago.

The contract has now been re-awarded to Julius Berger and RCC Nigeria Limited, both of which are expected to start working immediately.

The Federal Government, in a terse statement from the Ministry of Works, which was signed by the Minister, Mr. Mike Onolememen, announced the revocation of the concession awarded to the company.

Jonathan, last Sunday, had said his administration would review the concession of the expressway to Bi-Courtney.

Onolememen, in the four-paragraph statement, said the termination of the contract to Bi-Courtney was because of "serial breaches" by the firm.

He said the contract had been re-awarded to Julius Berger and RCC Nigeria Limited, with the latter scheduled to work on section II of the road from Shagamu to Ibadan, while Julius Berger will handle section I.

According to Onolememen, "The Federal Government today (yesterday) terminated the concession of the Lagos-Ibadan Expressway granted to Bi-Courtney Consortium on 8th May, 2009, the concession agreement of which was signed by the parties on 26th May, 2009.

"The termination of the concession is consequent on the serial breaches of the concession agreement by Bi-Courtney Consortium and especially the failure of the company to reach financial close as provided for in the agreement."

He further stated that the decision to revoke the contract was taken in order to reverse "the senseless carnage on this important expressway that is part of Arterial Route A1".

According to him, while the Federal Government will uphold the sanctity of contracts it enters into, it will not shy away from activating provisions of the contract agreements dealing with non-performance.

Monday was not the first time the Federal Government had taken drastic measures regarding the concession by Bi-Courtney.

In September, Onolememen had indicated that the government was withdrawing the road from the concessionaire over its inability to raise funds for the reconstruction of the road since it won the contract in 2009.

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