The protracted Lagos rail project

Lagos State Governor, Akinwunmi Ambode

Lagos is often touted as a mega city. The African Property Investment (API), in 2017, revealed that research has shown that Lagos would be the largest mega city in Africa by 2035. The State is considered the most populous in Nigeria after Kano according to the controversial 2006 national census. It is the most viable state in Nigeria according to the Economic Confidential Annual States Viability Index (ASVI) with over N300 billion IGR in 2016. The governor, Akinwunmi Ambode in 2016 announced to the world that Lagos is the fifth largest economy in Africa. With a population in excess of 20million it is considered the commercial capital of West Africa. In the midst of all the positive attributes, the state is afflicted by a major challenge that is not unbeknownst to other mega cities across the world. The only difference is in how some cities have managed to address the challenge using a multi modal transport strategy. On the contrary transportation in Lagos has been a nightmare for the people.

Lagos was recently ranked one of the worst cities to live in due to many factors including poor infrastructure. Although such ranking is contestable, it did not come as a surprise considering that the state largely relies on road transportation for the movement of goods and people. Even the few good roads in the State, by our standard, may not pass the test for international standard. This reality presents a perception of an ill-planned state. But it was not meant to be. Lagos was envisioned to have a multi modal transport system that maximises water, road and rail. The State had benefited from the investment in rail by the colonialists, hence the visibility of some rail tracks now administered by the Federal Government. However, Lagos lacks intra city rail system for the transportation of its huge and ever growing population.

The attempt at constructing a viable intra-city rail system started in 1983. The N689 million metro line with 30 trains conceived by the administration of Governor Lateef Jakande was designed to start from Marina and terminate at Agege. It was the most ambitious rail project conceived in the entire west African region at the time. The project was scheduled for delivery by March 1987. Sadly, upon the overthrow of the government, the military administrators were not convinced of the importance of the project and therefore cancelled it at a cost of $78 million.

Upon return to democratic governance in 1999 and the establishment of the Lagos Metropolitan Area Transport Authority (LAMATA), a rail master plan was developed to reflect the growing status of Lagos – a mega city. The master plan was conceived with three major corridors –  North-South corridor to cover Ijoko-Alagbado and Iddo, East –West corridor to cover Ojo-Okokomaiko to Mile 2 axis; while the Eastern corridor would serve the Lekki-Epe axis, with a central ring between Victoria Island and Lagos Island connecting the three corridors. LAMATA later proposed seven lines in the network: Red, Blue, Green, Yellow, Purple, Brown and Orange. However, the government settled to begin with the Blue and Red line estimated to cost $1.4 billion. Whilst the Blue line which was to cost $1.2 billion would be funded by the Lagos State government, the Red line was designed to use the existing Nigeria Railway Corporation corridor and constructed through a concession arrangement. The two lines were designed to have 13 stations each and 23 in total because some stations would be shared by both lines. The plan also included a flyover rail built between Marina and Iddo stations to link the Red and Blue lines.

The government went on to appoint transaction advisers for the Red and Blue lines. Dar Al-Handasah was appointed as transaction adviser for the Red line and CPCS Transcom as adviser for Blue line. The adviser conducted feasibility studies and created conceptual designs for the respective lines. The construction of the 27 km Blue line from Okokomaiko to Marina was awarded to the Chinese CCECC and construction began in 2009. The initial completion date was 2011. The construction of the line was divided into two phases. The first phase includes the National Theatre to Mile 2 section and the second phase includes the Mile 2 to Okokomaiko. However, owing to funding challenges the earlier date for the completion of the Blue line was reviewed from 2011 to 2013, later to 2015, then December 2016, 2017, and now to 2022. The enthusiastic Governor Ambode, upon assumption of office in 2015, had declared that the project would be completed in July 2016. But since then the completion date has been postponed three times under this administration further dashing the hopes of expectant Lagosians who are daily subjected to frustrating traffic jam.

The continued postponement of the completion date for the project has continued to diminish expectations considering that the reasons for the constant date review have been the same. In 2015 when the government was reviewing the date 2017, it was attributed to funding challenges and efforts at selecting a credible concessionee who will run the system for a period of 30 years. The constant funding challenges call to question the existing strategy of the government to fund the project. Every investor and administrator is well aware of the funding challenges for a project of this nature. Rail projects world over are capital intensive and demand strategic planning, the absence of which will lead to goal shifting as we are currently experiencing. This fact was captured by the mayor of London, Alderman Alan Yarrow, when he visited the project site in 2015. He said “You have a good strategic plan and there is no two ways to it. There is obviously going to be bumps on the way. But the reality is that you need to start thinking progressively on how to fund it and you should start now, rather than later.” “It is all about the structure, protection of the investor, the rule of law and make sure that you have the right contracts in place. I have spent 43 years in the investment banking. I have very often seen stations like this but this is a long way from being finished.   “It is a very exciting story to have this in Lagos but it has to be funded because it will do Lagos a lot of good. If we and UK can help, giving the right financing package, we will do so.” This statement was made in 2015 but three years after, we are back to the same situation that the mayor warned against.

In a recent statement the government stated that it had engaged consultants to carry out a comprehensive technical review of the project. Subsequently, the government engaged the services of Alstom SA France –  an experienced international railway systems aggregator and rolling stocks manufacturer – to review the report submitted by the consultants. The final submission now is that the rail project could only become operational in 2022 based on proposed funding pattern. In addition to accepting the report of the consultants, the Managing Director of Lagos Metropolitan Area Transport Authority (LAMATA), Abiodun Dabiri, also revealed that “Based on the final report submitted, the consortium of Alstom Transport SA France has been engaged for the procurement, engineering, construction, installation of Operation & Maintenance (O&M) moveable infrastructure and commissioning of railway systems towards the commencement of passenger operations for LRMT Blue Line project from Marina to Mile 2.” And to make the completion process faster, the work plan has now been divided into two phases – the first phase is expected to be completed before the end of second quarter of 2019. The phase would allow the completion of all the preliminary work that would lead to the financing of the main work in phase two. Phase one will be fully financed by the Lagos State Government through Internally Generated Revenue. The second phase, which is expected to be completed in 39 months would involve the provision and installation of railway operations’ systems from Marina to Mile 2. The proper execution of the two phases will culminate in the delivery of the Blue Line by 2022.

The new completion date is more than ten years later the initial approved date. The attraction in the new review is that there is really nothing different from earlier reasons given for the postponement of completion date. The positive news is that much work has already been visibly done on the Blue line from Mile 2 to Marina. And the final leg of the construction should not prolong beyond the ordinary. The imperative of a functional intra city rail system in Lagos cannot be overemphasised. It is one of the proven options to ease the transportation woes of Lagosians. Connecting Lagos via rail should not be a prolonged dream considering the credit worthiness and financial strength of the State. If the government put in place the right structures and assurances, investors would gladly invest in the project. If we are not attracting investors to the project, it is perhaps due to existing structure.