One year after the #EndSARS protest, Lekki Concession Company (LCC), the concessionaire of the Lekki and Ikoyi tollgates in Lagos, has continued to count its loses as it has not been operational. The special purpose vehicle company, where Lagos State government holds the single largest equity is estimated to have lost about N9.71billion since October last year when it stopped collecting fares at the toll plazas.
Sources close to the company disclosed that the Lekki-Ikoyi Link Bridge is expected to generate about N10million daily, while tollgate along the Lekki-Epe corridor is expected to generate about N16.6million daily. Going by the daily revenue target, the company is expected to generate about N300million on a monthly basis from the Lekki-Ikoyi Link Bridge while close to N500million is expected to be generated as monthly revenue from the Lekki-Epe tollgate. In 12 months, LCC is expected to rake in N3. 6billion from the Lekki-Ikoyi Link Bridge and about N6billion from the tollgate on Lekki-Epe corridor #EndSARS: Obaseki to pay N190m compensation to victims of police brutality When contacted on phone, the Commissioner for Information of Lagos State, Gbenga Omotosho confirmed that the state has incurred a huge loss in the last one year as a result of closure of the operations of the company.
He noted that the company may continue for a longer period to incur loss as it is not feasible for it to commence operations soonest. “You know the tollgate was destroyed beyond measure and we need to put so many things in place before operations could resume. But the Commissioner assures that LCC will come back stronger and better equipped.
“You know as the Yoruba people will say, when a King’s palace is burnt, the rebuilding becomes more beautiful.” He disclosed that LCC is working hard to ensure that it comes up with a better technology and facilities to serve motorists and ensure better flow of traffic when it resumes operations. “So nobody knows when they will be able to complete the plans they have to recommence operation. Nobody can say for sure when they will come back to operation.” The management of Lekki Concession Company disclosed three months after its operations came to a halt in January this year that over N2.5billion losses had been recorded since #EndSARS protest in October 2020.
The Managing Director of LCC, Yomi Omomuwasan, who made the disclosure at a press briefing, had said that the loss incurred by the company since the #EndSARS protest would not be less than N2.5billion, as efforts are still ongoing to determine the extent of losses as a result of stoppage of operation. Debt As of January 31 2021, the total liability is around N11. 6billion. Breakdown shows that the foreign part of the loans stands at $31.1million. The honourable Commissioner, who gave the update of the exposure of LCC to both local and foreign creditors, said LCC owes a lot of money to both local and foreign creditors. “I can confide in you that it is a lot of money that LCC owes over that road,” he added. Mr. Omotosho however noted that the main concern for the government is not the debt and how to service it.
He said the main concern of the State is about the number of Nigerians who have lost their jobs as a result of the destruction of the tollgates by the ENDSARS protesters. “Let me tell you that about 500 Nigerians were employed by LCC and most of them were relieved of their jobs after the company stopped working in the last one year,” he lamented. According to Omomuwasan, payment of the debt has been stalled since October 2020 when the tollgate was shut due to the #End- SARS protest. His words: “It has been impossible to meet our loan repayment obligations- and obligations to our workers- given our inability to collect tolls, the main revenue source from which the repayment was contractually expected to come. “Again, this explains where the bulk of our earnings go, contrary to the false claims on social media that the toll plaza is a cash cow.
If we default in payment of these loans, the implications for the business community are too grave to be imagined.” He further explained that the lenders are requesting for the assessment of the damages to the toll gates as a result of the crisis, saying this is one of the reasons why it sought to repossession of the tollgate. “The banks want a formal report and if we don’t go back to do the assessment, it will be extremely impossible to give the report,” he added.
Lagos intervenes Chairman, Lagos State House of Assembly Committee on Finance, Hon. Rotimi Olowo, representing Shomolu Constituency 1, ex-plained that the intervention of Lagos State in LCC has to do with the restructuring of the loan. He disclosed that Lagos state government took over LCC as far back as 2014 because there was the need for the state to extend the infrastructure to Epe.
“There are a lot of investors, especially Dangote Group of Company coming up along that corridor. The restructuring Mr. Governor sought for was the conversion of the loan from private to public sector with sovereign guarantee by the federal government. This connotes two different things, we have bought over LCC since 2014, LCC is wholly owned by the State Government. “Lagos State Government has 75 percent of the shareholding, while office of PPP has 25 percent and when you look at it, it is a matter of semantics, the state also owns PPP.
So, it is the state government that owns LCC at 100 percent,” he explained. Speaking further on the arrangement to settle the LCC debt, he said: “Looking at the condition of loan from Africa Development Bank (AfDB), it comes as a private sector driven loan, which comes with a higher interest loan of 4 percent and it was going to add pressure on the loan obligation of the state.
So the state government, through the Commissioner for Finance is smart enough, with the move that if LCC is owned by the state, while not go for public sector loan, which is just about 0.8 percent and with a better gestation period of about additional 15 years. The private sector loan would have lapsed in 2023 which is about two years away, we now reasoned with the state government.” Olowo assures that the state government has the obligation to settle the loan incurred by LCC, being the current owner of the company. His words: “Whether LCC is operating or not, the fact remains that we will still pay the loan, there is an irrevocable standing rule to repay the loan. “We are to pay bi-annually. Secondly, we don’t want the loan to mount to a point that our children will continue to pay the loan. We better structure the loan in such a manner that in the next eight or nine years, we should have paid it all both the local and the international aspects of it. So to ensure repayment, we will always see that it is included in the annual budget. You will appreciate the fact one of the two toll gates is undergoing reconstruction, before the year runs out, we will complete that and obviously we will see what they are doing.”