Toll thoughts

Lagos state government got a loan from the AFDB under the rubrics of the project finance world of financial models. I’m making the effort to make this post as simple as possible so that I can fully understand and provide ideas, which can resolve the mess…

Like any legal agreement the most important term is PAYBACK- the agreement is a 30year agreement and payback was decided majorly to be in the form of tolls.

The loan was collected for 5 reasons:
1) extension of Ozumba Mbadiwe and 49km up to the Lekki Free Trad Zone
2) 6km Coastal road development (alternative route for Lekki express road)
3) rehabilitation of access to Coastal Road
4) Falomo Bridge ramp
5) Building the foot bridges

First of all, why should the residents of Lekki and the hinterlands, pay for the Ozumba road expansion and the Falomo bridge, as these benefit all Lagosians and not those that live beyond the toll Borders. The simple solution is to introduce a toll at the start of Ozumba in addition, adjacent to Bonny Camp.

The government requests tolls, the citizens MUST request accountability and visibility,for example:
A) How much was 3line management awarded for the e tag project (3line management is company awarded contract for electronic toll payment system)
B) following initial delay, why is citizenry not being educated on etag system
C) how much has LASG paid back to LCC ( Lagos state government has been paying back loan on behalf of citizens)

Another area I seek visibility on is the Traffic simulation and Automatic Vehicle Counting contract. In June 2011, companies were called to pitch for this traffic simulation (number of cars that pass through and minimum time spent at toll station):
A) what company was awarded this contract
B) how much was this contract worth
C) what was the output of this tolling simulation

The number bandied about is 100,000 cars per day- this number is not yet verified factually, however simple maths shows the daily revenue from tolls is astronomical (10million Naira approx) Lagos state government need to:
A) provide monthly accounts of how much revenue is generated
B) provide initial input used in financial model/ make projections with new inputs to determine payback
C) ensure an audit of these findings are done by an independent firm

I think it is grossly negligent of Fashola to suggest teething problems with a toll can be likened to GSM initial network failures! Especially when the citizenry is billed to pay huge sums for a simulation exercise which was obviously a waste of money. Fashola drove through the toll at 1.35pm on a Sunday, if he drives through everyday at rush hour to work, maybe his throw away insensitive statement might be better received.

Solutions:
A) Provide a clear outline of phased completion times for the rest of the Lekki Express Road
B) Provide education about roundabouts as the citizenry is not familiar with these (to reduce road related deaths)
C) Lagos state government officials to be visibily present supervising LCC workers ( who have the worst work ethic/efficiency I’ve ever seen)
D) Lagos state government to provide an APOLOGY to residents in Eti Osa who peacefully protested and were violently assaulted
E) Lagos State Government should APOLOGISE to Eti-OSA residents who have minimum timelines of 3 hours on a 30min route, who now have to pay a toll for unfinished incompetent work
F) Lagos State Government Officials to review toll payments and make them inline with minimum wage of Eti-Osa demographic
G) Lagos State Government to provide loans for people beneath a certain threshold who can not afford to pay these tolls- a means tested approach for tiered tolling
H) exclude all forms of public transportation from this scheme and make it clear to citizenry that this has been done
I) Lagos State Government simply need to realise there is gross negligence and participate with citizenry to come up with better solutions

There is a lot to think about and a lot to be redone, but as always, it starts with conversations…

Eko o ni baje – or so we hope 😦

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9 thoughts on “Toll thoughts

  1. Short, sweet, well-researched and straight to the point. Profound stuff and an encapsulation of all key elements of a common sense approach to sorting out this hot mess!

    If only altruistic considerations motivated the structure and transaction dynamics put around this project. If only the principal personalities behind this “deal” were acting in the interest of the common good. If only …

    This project – as currently executed – is fundamentally flawed and reeks of bad faith on the part of its promoters.

  2. Though I don’t agree with most of your thoughts, I do agree that the project has some fundamental issues. If your revenue assumptions are accurate, and assuming the project cost is N100 billion (saw this figure in a write up), then we’re talkng about a payback period of more than 27 years (without factoring interest and operating expenses). Hardly exciting stuff. Think you’re also a little too harsh on Fashola. I remember tolling was supposed to commence over a year ago….but he got that postponed. But I’m sure we can agree to disagree….like you said, it starts with coversations. Thanks for your post.

    • Hello Bayo, the assumption is 100,000 cars per day, not too sure where you got the billion figure from. 100,000 cars a day at 120 is the assumption.
      I do not think I’m being harsh on Fashola because he has had a year to iron out issues and complete the road! 90 percent of payments on the road will come from citizens who live along the uncompleted lekki express way which is dangerous and as yet has no real completion date.
      Fashola delayed the tolling to get re-elected, I do not blame him for this because anyone in his position would have done the same. However he has a responsibility to provide deliverables and be harshly judged accordingly.
      Visibility is all I am asking for, lagos state payment to date total loan repayment plus interest over 30year term. Educate the citizenry so that we all live the dream!!
      Thanks for reading! This is an exercise for me to learn from you as well 🙂

      • Think you misread my calculations;

        Projected Revenue (Using ur assumptions) : 100,000 cars per day = 10-12 million a day and 3.6 billion a year.
        Project Costs : Read somewhere N100 billion (Don’t have any verifiable source so this would have to do)
        Therefore, ignoring interest and operating expenses, and future price increases, payback period is about 27 years.

        Anyway, think we both agree that there’s definately room for improvement.

  3. Though I don’t agree with most of your thoughts, I do agree that the project has some fundamental issues. If your revenue assumptions are accurate, and assuming the project cost is N100 billion (saw this figure in a write up), then we’re talkng about a payback period of more than 27 years (without factoring interest and operating expenses). Hardly exciting stuff. Think you’re also a little too harsh on Fashola. I remember tolling was supposed to commence over a year ago….but he got that postponed. But I’m sure we can agree to disagree….like you said, it starts with conversations. Thanks for your post.

  4. My apologies Bayo! I did misread your calculations. Project costs should include interest though, so I assume 100bn would be total figure, will do more research on that at let you know.
    Yes fully agree that there is more room for improvement. We are definitely on the same page, great to share thoughts!

  5. Wow! You’re very passionate. I do appreciate your concerns and you have come up with very good solutions. Good luck getting the Lagos State Government make it these adjustments

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