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Lekki Concession Company Case

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Lekki Concession Company

The Company

Lekki Concession Company ltd (LCC) is a special purpose vehicle (SPV) set up by ARM Group of companies specifically to execute the Lekki toll road concession project. Asset & Resource Management Company Ltd ("ARM") was established in 1994, and has evolved into one of the most respected financial services brands in Nigeria. It is a diversified and integrated, non-bank financial services institution with over 15 years of investment management expertise. Its business comprises non-pension asset management, pension fund administration, trust services, real estate management and development, infrastructure finance and development, investment banking and financial advisory services.

Through sponsorship of Lekki Concession Company Ltd (LCC), it pioneered the execution of infrastructure projects in Nigeria, based on the Public Private Partnership framework. It holds a 30-year concession for the rehabilitation and maintenance of the Lekki-Epe Expressway. This pioneering project reached a major milestone with the achievement of a historic "N46.8bn ($390M) financial close" in October 2008, amid a very turbulent global operating environment.

Headquartered in Lagos, Nigeria with offices across the country, ARM manages total assets of over N150 billion. The firm is regulated by the Nigerian Securities & Exchange Commission.

The management team of LCC is made up of a crop of seasoned and industry-recognized professionals with diverse but complementary skills in various backgrounds as well as depths of experiences (garnered from national and international institutions).

Over the years, these executives have brought their knowledge, experience and leadership to bear in the development and delivery of solutions (through products and services) to meet the needs of its customers, and in the process contributing to sustaining the performance of the group till date. The management includes: Mr. Opuiyo Oforiokuma, CEO/Managing Director, Mr. Danie Meyer,

Chief Financial Officer, Mr. Ivan Bekker, Chief Technical Officer and a host of others

The Lekki toll road concession project, is the first of its kind in Nigeria, and is mandated under a 30-year concession agreement with the Lagos State government for the upgrade, expansion and maintenance of approximately 50km of the Lekki-Epe express way (Phase1), and construction of approximately 20km of the Coastal Road (Phase 2). The project is designed to deliver essential road infrastructure and services along the Lekki Peninsular axis.

Lekki Toll road is a public private partnership (PPP) scheme, and uses the Build-Operate-Transfer (BOT) model of infrastructure delivery. The concession is for a period of 30 years, following which the assets will be transferred to Lagos State government.

LCC is strongly committed to satisfying the needs of its customers and other stakeholders, and therefore places a premium on providing sustainable solutions to the challenges brought about by the historic and continued heavy traffic congestion in the lekki peninsular axis.

An Overview:

The Lekki express road was initially constructed by previous governments before and during 1987. The axis was then opened up for rapid development. Since then and now, the Lekki-Epe axis has experienced rapid and unprecedented development. Several new communities and housing estates have emerged with the attendant high influx of both low and high income earners.

In April 2006, the Lekki Concession company Ltd (LCC) signed the concession agreement with the Lagos State government, this was later followed by a financial close agreement in 2008, the second agreement was to enable the LCC have access to long term funding. The entire project is expected to gulp N50B with a 30 year concession period.

The project requires that the existing four lanes Lekki-Epe dual carriage should be reconstructed into a six lane dual carriage way. Various service lanes are to be provided. The project also requires the construction of an alternate coastal road along the shores of the Atlantic Ocean towards Ibeju-Lekki local government.

The Scope of the Project

The Lekki Toll Road Concession Agreement, which underpins the "Lagos Infrastructure Project", will include upgrading and creating new Road Infrastructure along the first 49.4km of the Lekki-Epe Expressway (Phase I). Furthermore, additional private sector finance will be deployed towards developing the first 20km of the Coastal Road with an option to do the Southern Bypass as well (PhaseII).

In keeping with the already globally established BOT model of infrastructure delivery, the Concessionaire will be required to operate and maintain the road for the full 30-year term of the Concession, and then to hand over the assets to Lagos State in good condition at the end of the Concession term.

In this way, not only will Lagos State enjoy new World Class infrastructure as a direct consequence of this Agreement, users of the road will also positively experience the service-based approach that will be adopted by the Concessionaire to deliver the following key benefits at affordable prices.

1. Convenience - traffic decongestion, easier access to and from the Lekki-Epe corridor, breakdown and recovery assistance, ambulance service, Customer Call Centre, etc

2. Journey times - shorter journey times, reduced wear and tear on motor vehicles, reduced fuel consumption by road users, etc.

3. Security - law enforcement, better street lighting, reduced risk of "go slow robbery", etc

In addition to those listed above, other foreseeable key benefits for the area include creation of employment, support for continued and new business growth, and the underpinning of real estate values. All of these benefits should have important positive impacts on economic growth in the area and for Lagos State as a whole.

The Tolling




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