Lagos-Calabar highway: FG plans compensation in nine states, puts cost at N15tn

The Federal Government, on Thursday, confirmed that it would pay compensation to all property owners along the path the 700km Lagos-Calabar Coastal Highway would be passing through across nine states.

The Minister of Works, David Umahi, who said President Bola Tinubu had approved the payment of compensation to all affected property owners, also listed the necessary requirements and conditions affected residents must meet to qualify for the compensation.

While clarifying that the construction of the Lagos-Calabar coastal Highway would tentatively gulp N15.36tn or N4.39bn per kilometre, the minister said the government had extended the eviction notice for property owners affected in the multi-trillion naira project.

He also said the legacy project would be delivered in eight years.

The 700km Lagos-Calabar coastal highway project is designed to connect Lagos to Cross River, passing through the coastal states of Ogun, Ondo, Delta, Edo Bayelsa, Rivers, and Akwa Ibom, before culminating in Cross River.

Umahi, while speaking at a stakeholders meeting with affected residents in Lagos, said that the works ministry would only provide compensation to deserving individuals based on approved documents.

He said an environmental impact assessment valuation had been concluded on the affected buildings, noting that owners of shanties and illegal buildings would not be paid.

He said, “The Federal Ministry of Works will pay compensation and the President has directed me to pay compensation but we are not going to pay anything to those living in the shanties.

“When you put up a building on a land that is not your own then you are not entitled for compensation. If your property is not approved, you are not entitled for compensation, but the President is a man of good heart and so I think we would still pay compensation to some persons because of the hardship in the country.

“But I repeat, shanties or unapproved buildings won’t be paid but we would try to save solid properties as much as possible.”

He also noted that the President directed the implementation of a compensation plan in response to the prevailing hardship in the country.

“The number of houses is still unknown but the environmental and social impact assessment officer has concluded his report and has captured all the properties involved. I am going to be looking at it but I am going to remove all the shanties and illegal buildings.

“At the end of this meeting, I know very well that my director and I will decide to increase the number of days of notice, but it is not going to be too long because the rain is coming and we want to pass through this particular section before it starts.

“The first 47km will be completed in 36 months but with what they have done so far, I wont be surprise if they complete it in two years. Until we procure all the sections, we may not be able to say this is the exact time the project will be completed,” he added.

Project funding

Umahi said the legacy project, which would be delivered in eight years, was being constructed with the use of concrete pavement on the four-lane carriageway.

He explained that the contract was awarded on a counter-funding basis and not on a Public Private Partnership basis as widely claimed.

“And so in this particular project like Abuja to Makurdi, which is being handled by China Harbour, the government is paying 50 per cent counterpart funding. Then you have also from Makurdi to 9th Mile in Enugu State, where we are also paying 50 per cent counterpart funding.

“So, there’s a marked difference between PPP and EPC plus F (Engineering, Procurement and Construction plus Finance). And in this particular project, there will be a negotiated counterpart funding of between 15 and 30 per cent. We are still negotiating on these terms and will come to a resolution soon,” the minister stated.

The Federal Executive Council had approved the construction of phase one of the 700km Lagos–Calabar Coastal highway to Hitech Construction Company Limited. Phase one of the superhighway project stretches to 47.47km, starting from Lagos.

Earlier during an interview on Channels Television’s on Thursday, the former Ebonyi State governor had clarified the tentative total cost to be expended on the project, pointing out that the government was very prudent in costing the project at N15.36tn.

The figure was, however, contrary to the N4bn cost per kilometre earlier stated by the minister when he appeared on Television Continental News Hour programme on Wednesday.

This was as the Nigerian Society of Engineers backed the government on the project, encouraging Nigerians to focus on its potential investment value rather than dwell on the perceived high pricing.

But responding to a question on the project cost on Thursday, the minister said each kilometre of the coastal road would have cost more than N4.36bn but for the government’s prudence and cost effective measures.

“Can I give you the tentative project cost? Multiply N4.39bn by five, which are the lanes and then multiply by 700km which would give a total cost of N15.36tn. But this is a tentative figure.

“You know, there are other projects not awarded by me that are also going for about N4bn per kilometre.

“What is costing a lot of money is the sand filling and I am very proud of this figure and cost and I did a very good job on this project. So, I will pride myself, to the glory of God, that this project is the most prudent project that I’m starting. Other projects I made, we are reviewing, we are fighting, and we are trying to review, the cost.”

NSE arm reacts

Commenting on the cost, the President of the Nigerian Highway Infrastructure and Transport Engineers, Hassan Saidu, said the government should be applauded for taking the bold step to construct the road after many failures by previous administrations.

NHITE is the road and transport division of the Nigerian Society of EngineersSaidu, while speaking in an exclusive interview with one of correspondents on Thursday, said Nigerians should not solely focus on scrutinising the total cost of the project but should consider the potential revenue it would generate in terms of investments.

He said, “The coastal project started with the Niger Delta Commission in 2013 when they appointed consultants to look at roads that transverse about nine states. I believe as a nation we have to understand this.

“Remember that several administrations failed to kickstart that project just like what we faced on the second Niger Bridge.

“What we fail to understand is that when it comes to cost of building infrastructure, especially the road infrastructure which is the backbone of economic development and growth, we don’t have to look at just the total cost of the project but how much the project can bring back in terms of Investments.

“So if we start looking at the cost now and say it is expensive, when are we going to start building it? That means the project won’t see light of day and for the attempt to start construction, the institution commends the government by taking the bull by the horn to commence the project.”

According to him, the types of materials, soil texture and other engineering science are important criteria to consider before labeling the project as expensive.

“Also, before you talk about cost, you have to look at the type of infrastructure that would be installed on that road. Coastal roads are built in swampy areas and you have to look at some considerations like the materials to be used before we can say it is expensive or not.

“And like any project, it is costlier to build any road in the south than in the North. Because we have more hydrologic structures due to water challenges and the soil condition.

“These are the challenge that would come in terms of cost and the materials to be used will determine the cost. The engineering science and economy will determine the cost. The most important thing is that when the road is done. It is going to improve the economy of that particular area,” he added.

Procurement concerns

Responding to further enquiries on the project, Umahi refuted allegations that the project bypassed the proper procurement process, clarifying that the contract was awarded based on a counter-funding model rather than the widely rumored Public-Private Partnership arrangement.

According to the minister, the construction company, Hitech, did not do any competitive bidding for the project, as he dismissed claims that the project did not follow the due procurement process.

There has been serious contention on the funding and bidding process of 700km coastal highway after the presidential candidate of the Peoples Democratic Party in the 2023 general election, Atiku Abubakar, questioned President Bola Tinubu administration’s decision to allegedly award the contract to Gilbert Chagoury’s Hitech without competitive bidding, daring the President to disclose the full cost of the Lagos-Calabar highway project.

He also wondered why the Tinubu administration reportedly released N1.06tn for the pilot phase, or six per cent of the project, which begins at Eko Atlantic and is expected to terminate at the Lekki Deep Sea Port.

But responding in a statement on Tuesday, Umahi explained that despite the soaring costs of materials in the construction industry due to commodity price inflation and supply chain disruptions, the ministry was committed to financial discipline.

Regarding the procurement and bidding process, the minister clarified that the due process was indeed followed.

He added that contrary to the misconception that the road operates under a public-private partnership, the project falls under Engineering, Procurement, Construction plus Finance, necessitating counterpart funding from both the government and the contracting company.

Umahi said, “I can tell you that due process was followed, and for people who were concerned about whether it was appropriated for and I said yes, it was appropriated for in the 2024 budget even though there is a difference between appropriation and procurement.

“But the most important thing is that it was appropriated for and followed due process. The due process is that we did our in-house evaluation of what was submitted. Some people also said the project is under a public-private partnership but that is not true, it is under Engineering, procurement, construction plus finance, there is a commitment of funds from the Federal Government depending on the negotiation like on the Abuja-Markurdi road and on this project we are still negotiating between 15 per cent and 30 per cent.”

Toll gate

Meanwhile, the Federal Government has hinted that it would likely charge an average of N3,000 each as toll for vehicles using the Lagos-Calabar coastal road upon its completion.

While dismissing insinuations that the budgeted cost for the project was high, the minister said the money invested would be made back in 15 years.

“Let me leave out the infrastructure along the corridor. Let me just concentrate on the tolls and I put 50,000 vehicles as an average passage on these toll points per day,”

“I put N3,000 as an average cost. N3,000 because the cars could be like N1,500, and the big trucks could be like N5,000. So, we put an average of 15 years, you make back the money,” he said.

He said there would be security at the toll gates and also some facilities like filling stations.

“At every point of tolling, we also have toll station where we have a kind of relief activities: the restaurants, filling stations, parking lots, and so on and so forth,” Umahi said.

“So, people will now have confidence. In these sections, we intend to put CCTV all through.”

However, the 2023 presidential candidate of the PDP, Atiku, insisted that the award of the Lagos-Calabar Highway Project did not meet the minimum threshold of due process.

Atiku challenged the Federal Government to disclose the total cost of the Lagos-Calabar highway project.

The former Vice President in a statement by his media office, on Thursday, criticised Umahi for allegedly modifying the original project plan after Gilbert Chagoury’s Hitech was awarded the contract without undergoing competitive bidding.