4. About Lagos
ADDRESSING THE LAGOS STATE TRAFFIC SITUATION LEVERAGING PUBLIC PRIVATE PARTNERSHIPS
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โข Lagos is the most populous city in Nigeria, the second fastest-growing city in Africa and the
seventh in the world
โข The population of Lagos urban area, according to the Lagos State Government is 17.5 million,
a number disputed by the Nigerian Government and judged unreliable by the National
Population Commission of Nigeria
โข Lagos was reported in 2014 to have a metropolitan population of 21 million, making Lagos
the largest metropolitan area in Africa
โข Lagos is a port which originated on islands separated by creeks, such as Lagos Island, fringing
the southwest mouth of Lagos Lagoon while protected from the Atlantic Ocean by barrier
islands and long sand spits such as Bar Beach, which stretch up to 100 kilometres (62 miles)
east and west of the mouth
โข From the beginning, Lagos has expanded on the mainland west of the lagoon and the
conurbation, including Ikeja (which is the capital of Lagos State) and Agege, now reaches
more than 40 kilometres (25 miles) north-west of Lagos Island
โข Some suburbs include Ikorodu, Epe and Badagry, and more local councils have recently been
created, bringing the total number of local governments in Lagos to 57 (This includes Local
Community Development Areas or LCDAs)
โข Lagos is traditionally and locally referred to as Eko and it has a popular slogan thus "Eko o ni
baaje" meaning "Lagos will never collapse"
Source: Wikipedia;
https://en.wikipedia.org/wiki/Lagos
5. About Lagos
Lagos is in a dire traffic Situation
ADDRESSING THE LAGOS STATE TRAFFIC SITUATION LEVERAGING PUBLIC PRIVATE PARTNERSHIPS
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6. Lagos State Government Interventions
Lagos State Transportation Masterplan
ADDRESSING THE LAGOS STATE TRAFFIC SITUATION LEVERAGING PUBLIC PRIVATE PARTNERSHIPS
6Source: Wikipedia;
https://en.wikipedia.org/wiki/Lagos
โข The Lagos State Government trough its agency โLagos Metropolitan Area Transport Authority
(โLAMATAโ) has designed a long term plan to solving the transportation challenges within the
state
โข The plan recommended an integrated approach, incorporating Road, Water, Rail as well as
Cable Car transport systems
โข Interestingly, the Government of Lagos identified that it could not singlehandedly finance the
infrastructure deficit in the State
โข This is as a result of the stateโs dire infrastructure needs and funding available to the
government
โข The State unlike many other states in Nigeria have a bulk of their funding from Internally
Generated Revenue (โIGRโ) rather that Monthly Federal Allocation
7. Lagos State Government Interventions
Lagos State Transportation Masterplan
ADDRESSING THE LAGOS STATE TRAFFIC SITUATION LEVERAGING PUBLIC PRIVATE PARTNERSHIPS
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Lagos State Rail Master plan
Lagos State Bus Rapid System Master plan
Lagos Cable Car Project Master plan
Lagos Water Transport Master plan
9. Lagos State Financing Situation
Federal Allocation Across States in Nigeria
ADDRESSING THE LAGOS STATE TRAFFIC SITUATION LEVERAGING PUBLIC PRIVATE PARTNERSHIPS
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1,600
136 100 96 82 55 43 36 35 34 34 33 31 31 30 30 30 30 29 29 29 28 28 28 27 27 27 27 27 27 26 26 24 23 23 21 21 20
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800 October 2014 FAAC Breakdown
โข Total FAAC Revenue Allocation โ N593.33bn
๏ Statutory Revenue โ N484.32bn
๏ Subsidy Reinvestment & Empowerment
Programme (SURE-P) โ N35.55bn
๏ NNPC Refund โ N6.33bn
๏ VAT โ N67.14bn
๏ง Revenue Sharing Breakdown
๏ Federal โ N224.25bn
๏ State โ N113.75bn
๏ Local โ N87.69bn
Key Highlights
โข Net FAAC allocation is the residual allocation payable to State Governments after all deductions at source have been
made. Such deductions include: Irrevocable Standing Payment Orders (โISPOโ) set up for payments of municipal bond
repayment obligations and bank loans
โข Given deductions are made before net allocations are distributed to states, states with huge external debt and bond
repayment obligations will have reduced net allocations
โข Lagos ranks 5th in the allocation distribution to states from the Federation Account
10. Lagos State Financing Situation
Internally Generated Revenues Across 10 States
ADDRESSING THE LAGOS STATE TRAFFIC SITUATION LEVERAGING PUBLIC PRIVATE PARTNERSHIPS
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โข Lagos also generate the
highest revenue
internally from its
effective tax system as
well as the huge
economic activities
within the State
โข However the Stateโs
infrastructure is
constantly under
pressure as the state
population continues to
grow due to high influx
of people into the State
annually
11. Lagos State Financing Situation
2015 Budget Analysis
ADDRESSING THE LAGOS STATE TRAFFIC SITUATION LEVERAGING PUBLIC PRIVATE PARTNERSHIPS
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โข The Lagos State budget is also the largest across states in Nigeria, with over $2bn
budgetary provision for 2015
โข The budget includes a 51% and 49% capital and recurrent expenditure distribution
respectively
โข The strain on the Stateโs budget makes it quite impossible for it to finance the construction
of the rail line via the regular public procurement process, hence the need for a PPP
Arrangement
Amount (N'Bn) Amount ($'Bn) % Contribution
Capital Expenditure 249.74 1.25 51%
Recurrent Expenditure 239.95 1.20 49%
Total Budget 490 2.45 100%
12. Project Case Study and Design
Rail Transportation โ Orange Line (Redeem to Marina)
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13. Project Case Study
Rail Transportation โ Orange Line (Redeem to Marina)
ADDRESSING THE LAGOS STATE TRAFFIC SITUATION LEVERAGING PUBLIC PRIVATE PARTNERSHIPS
โข Lagos state like many other densely populated
cities has the need to immediately address its
transportation challenges.
โข Because of the structure of the city, most
residents work on Lagos Island end of the city
and live on the Lagos mainland
โข As it stands today, there are 3 links from the
mainland to the island โ Eko Bridge, Carter
Bridge and the longest being the 3rd Mainland
Bridge.
โข These bridges and their route are very
congested during peak times
โข The other alternative to these 3 bridges has
been the ferry service which is not popular
because of the risks associated with water
travels
โข For the purpose of this course, I will recommend the construction of the Orange Line rail network, linking
extreme Lagos suburbs and outskirts to the business centres of the Lagos Island
โข The Orange line will open up the Lagos-Ibadan Express Way axis in Ogun State, while making travel time from
those extremes shorter
โข In context, on a Monday morning, depending on the time you leave your house, from the Ojodu end of the
stretch of the axis, it could take an average of 2.5 โ 3 hours to travel from these axes to the island. This
journey will take less than 45 minutes on a Sunday morning
14. Project Case Study
Rail Transportation โ Orange Line (Redeem to Marina)
ADDRESSING THE LAGOS STATE TRAFFIC SITUATION LEVERAGING PUBLIC PRIVATE PARTNERSHIPS
โข Lagos state like many other densely
populated cities has the need to immediately
address its transportation challenges.
โข This axis of Lagos accommodate a wide class
of people from the lower to the upper class
โข Over this stretch, there is no other
alternative to getting to the island save this
route, thus making transportation along this
axis very difficult
โข I suggest that a railway line linking this axis
directly to the island will sufficiently solve
the congestion problem in the axis
โข It currently takes about N500 ($2.5) to move
from Ojodu to Victoria Island. Leveraging the
volume of traffic, the rail line management
could afford to charge a premium to this in
exchange for 3 hours of agony in traffic
โข The line could potentially be extended to
Ibadan the capital of Oyo State via Ogun
State
16. Proposed Structure
Leveraging Public Private Partnership
ADDRESSING THE LAGOS STATE TRAFFIC SITUATION LEVERAGING PUBLIC PRIVATE PARTNERSHIPS
โข Having understood the capital constraints within the state, it would be extremely difficult for the state to
finance this rail project using the regular public procurement process. This is also corroborated by its lack of
expertise and experience in managing a project of this nature
โข The Public Private Partnership model will not only save the state a huge construction cost, but also allow the
state access to a well built and managed rail transport system
โข I will propose a โBuild, Finance, Operate, Train and Transferโ model (โBFOTTโ). Because the state is trying to
manage its funding sources, the state will not want to finance the project. The structure will also ensure that
the private partner or concessionaire not only operate the rail system, it also trains professional from the
Lagos State Ministry of Transport
โข The private sector will be interested in this project not only because it reduces the huge road traffic
congestion, it is also a major source of revenue and daily cashflow
โข The Lagos State Government has also implemented quite a number of successful PPPs, so we expect the
private sector to be willing to participate in the partnership
โข The Lagos traffic situation is well discussed topic, with a huge interest and keen anticipation of Government
policy direction at tackling the challenge, so we do not expect that the private sector will not want to
participate
โข We however recognize that the Government will have to solve issues regarding the right of way and
settlements for the project
17. Risk Allocation
ADDRESSING THE LAGOS STATE TRAFFIC SITUATION LEVERAGING PUBLIC PRIVATE PARTNERSHIPS
Land and
Compensation
Construction
Risk
Financing Risk
Currency Risk
Revenue
Guarantee
The Government will have to take responsibility for the right of way
for the trains as well as compensation to displaced residents
Since it is a BFOTT structure, the concessionaire will take full
responsibility for every construction risks except those caused by civil
unrest or other external factors
The Private sector is expected to finance the project, hence they have
to determine the optimum funding mix for the project
In case of an anticipated devaluation of the Naira, the government
will have to support in loan repayment to the extent of the
devaluation. The currency risk could also be hedged
The concessionaire will have to embark on its traffic study to ensure
that the project will be accepted, used and paid for by commuters