Economic Confidential

While there are confusions over the abrupt Federal Government’s termination of the concession on Lagos-Ibadan Expressway granted to Bi-Courtney Consortium, the Minister of Works, Arc. Mike Onolememen has continued to justify the action.

The Minister mentioned that the termination of the concession was consequent upon 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.

These breaches according to him include failure to submit duly completed Performance Bond, failure to submit copies of the Construction Contract, failure to submit copies of the financial agreement and failure to submit copies of the Operations and Maintenance (O&M) among others which sum up the obligations under the Concession Agreement dealing with the Representations, Warranties and Conditions Proceedings.

The President Goodluck Jonathan during his recent media chat before the termination of the contract stated that government would intervene on the concession of Lagos-Ibadan and will not allow itself to be held to ransom by a contract that was not properly consummated. The President stated that the Federal Government was going to take a final decision on the expressway which traverses the commercial nerve centre of the country, Lagos and the largest city in the West African sub region, Ibadan because the company is not in position to do it and I don’t think as a responsible government we can allow Nigerians to continue to suffer.”

The consortium was granted access to the site in September 2009 and the company could not perform its obligations as contained in the Agreement with respect to the construction work in accordance with the programme of work established by the consortium and approved by the Federal Government.

Due to these breaches, the consortium failed to reach the expected milestones three years after the site was handed over to it which in effect amounted to abandonment of the rehabilitation and reconstruction of the road.

The attention of the Consortium was later drawn to the fact that it had failed to reach a financial close after over 1,208 days since the execution of the agreement. The Concession Agreement, provided for the attainment of financial close within a maximum period of 240 days from the date of execution of the agreement. Before this final onslaught, the Consortium was given the opportunity to remedy the various material breaches within 30 days which it still failed to do.