Lagos Assembly approves take over of LCC by state Government


By Mukwuzi Joseph

The Lagos House of Assembly has approved Governor Babajide Sanwo-Olu’s request for the state to assume full ownership of Lekki Concession Company Ltd, a privately owned company.

The House made the resolution sequel to the presentation of the Committee on Finance’s report during its plenary yesterday.

The House had received the request from the Executive on June 21 and was committed to the committee to further look into it and report its findings to the House.

Chairman of the committee, Rotimi Olowo, said upon the buy-out of all shares of the LCC by the government, Lagos State would become the subsisting shareholder of the LCC with 75 per cent shareholding and the Office of Public Private Partnerships (PPP) with 25 per cent shareholding.

He added the original $53.9 million loan obligation from the African Development Bank (AfDB) had been resolved after series of engagement between AfDB, LCC and the state government to convert the loan to a public sector facility with the benefit of a considerable reduction in interest charges of 1.02 per cent of $1.12 million bi-yearly as against the 4.12 per cent of $2.746 million, thus giving a savings of $1.16 million bi-yearly or $3.24 million yearly.

The Assembly, therefore, granted the executive the approval to convert the AfDB loan to a public sector loan backed by sovereign Federal Government guarantee on behalf of the state government.

It also authorised the state government to issue a counter-guarantee in favour of the Federal Government along with an Irrevocable Standing Payment Order (ISPO) to deduct from Lagos State government statutory allocations.

According to the report, the servicing of the loan obligations would be in maturity till August 2034.

While debating on the report before the initial approval, Gbolahan Yishawu, representing Eti-Osa II, supported the recommendation, saying: “It was a smart move as the interest rate would not injure the state’s spending on capital expenditure.

He added it would also reduce the interest risk as well as the rate by moving the loan from private to public sector.

Also, Femi Saheed, representing Kosofe II, reasoned that restructuring the loan showed transparency in the state financing, saying it gave add-on flexibility for the additional years granted for the loan repayment.

The Speaker, Mudashiru Obasa, thereafter, directed the Acting Clerk of the House, Mr. Olalekan Onafeko, to send a clean copy of the resolution of the House to the governor.

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