Controversy trails Blue line over cost of project
Lagos blue rail


A fresh controversy is trailing the construction of the flagship transport project of the Lagos State Government, the Blue Line Metro rail 

While many Nigerians have commended the state government for the successful completion of the first leg of the project, others are raising eyebrow over its huge cost.

The state governor, Babajide Sanwo-Olu, it would be recalled, had on Wednesday, December 21, 2022, formally stepped into the coach of the newly completed Lagos Blue Line and took the first ride alongside his deputy, Dr. Obafemi Hamzat, Speaker, Lagos State House of Assembly, Rt Hon Mudashiru Obasa, members of the state’s executive council, reporters and members of the public on the electric-powered rail infrastructure.

The ride which started from the National Theatre Station to the iconic station in Marina took approximately 10 minutes.

The first passenger trip marked the completion of work on the Lagos Rail Mass Transit (LRMT) being constructed by Lagos Metropolitan Area Transport Authority (LAMATA).

And on Tuesday, January 24, 2023, history was made when President Muhammadu Buhari officially commissioned the first phase of the Lagos Blue Line Rail project.

An elated Governor Sanwo-Olu, in his address, commended the president for honouring his administration with his presence in the state for the commissioning.

“The state has enjoyed great support since Buhari became president. President, we are very proud to be associated with your bold national vision for infrastructural transformation.

“This Blue Line we are opening is the product of his timeless vision for Lagos State, a vision that dates back almost 25 years, when he took over the reins of leadership in Lagos State”, the governor had enthused.

According to BH findings, the completed Blue Line is one of the six metro lines identified in the Lagos Rail Mass Transitmaster-plan as contained in the Lagos State Strategic Transport Master Plan.

The project, spanning 13 kilometres in the first phase, will be running from Marina on Lagos Island to Mile 2/Okokomaiko on the mainland, covering five stations.

However, there have been graveyard silence on the true and actual costs of the project which started in 2010 under the administration of Governor Babatunde Raji Fashola, with the Chinese contractor and government officials giving contrasting figures on the amount spent to the public, just as the demands for openness and accountability on the project from groups and individuals escalate.

Controversy over the real cost of the project first erupted in January 2019 when the contractor, China Civil Engineering Construction Company (CCECC), a subsidiary of China Railway Construction Corporation (CRCC), published on its website that it is building the Lagos Blue Line project at the cost of $182million.

The revelation raised huge dusts as state government officials had at different occasions put the cost of the same project at $1.2 billion.

One of the groups that demanded answer, BudgIT, while charging the state government to clarify the monorail budget controversy, demanded for the openness of state budget.

“Just as taxpayers, BudgIT is seriously concerned about the discrepancy between the figure contained in the 2010 report delivered by China Railway Construction Corporation to its shareholders (USD$182m), as published on the company’s website, and the officially acclaimed figure by the Lagos State government, which puts the project cost at USD$1.2billion.

“The value of the Group’s new overseas contracts during the reporting period was RMB9.5568 billion, which involved the following significant overseas projects: light rail project in Lagos, Nigeria (the value of the contracts for blue line and red line was RMB1.256 billion).

“While being conscious of possible underlying factors that could be responsible for this humongous difference, we say with certitude that ambiguities of this like would have ceased to occur had the state government yielded to our demand and that of the people to put an end to its budget secrecy.

“Lagosians deserve to know, steadily and accordingly, full details of how state resources are being used without any hesitation on the part of the government.

“To put to rest all doubts and concerns, BudgIT demands that the Lagos state government should break the silence and come out clean on this matter.

“What is the overall cost of the Monorail project? Why the discrepancy between the official figure and the contractor’s report? These are key questions that demand an immediate response from the state authority”, the body had demanded.

Rattled by the outrage, the Lagos State government quickly came out to clarify the actual cost of the rail project.

According to the Assistant Director, Corporate Communication, Lagos Metropolitan Area Transport Authority (LAMATA), Kolawole Ojelabi, the unnecessary controversy was caused by the outrageous claim by some critics who had relied on an alleged document issued by CRCC, the parent company of CCECC.

He further clarified that the $182 million figure been bandied around as the real cost of the rail project were for three (3) contracts, namely the survey and design of the Blue and Red Rail lines for implementation respectively in 2009 and Blue Line phase 2A for the construction of earthwork, ballast, sleepers and tracks for just one kilometre and Iganmu Station between Iganmu to Mile 2 at the cost of $182 million.

“The Blue Line Rail project was awarded through an international competitive bidding and won by China Civil Engineering Construction Company (CCECC), subsidiary of China Railway Construction Corporation (CRCC).

“However, the project has been through ups and down in its implementation. As a result, and of late, a lot of untruths had been peddled about the project. It is therefore germane to set the record straight.

“The Blue Rail line is said to have been awarded at the contract sum of $182 million as against $1.2 billion advertised by the state government as the cost of the project.

“Those who made the outrageous claim allegedly relied on a document attributed to CRCC, the parent company of CCECC.

“The report also alluded to the fact that the contract of RMB1.256 billion ($182 million) was for both blue and red-light rail projects.

“Instructively, the Lagos state government had awarded three contracts for the survey and design of the Blue and Red Rail lines for implementation respectively in 2009 and Blue Line phase 2A for the construction of earthwork, ballast, sleepers and tracks for one kilometre and Iganmu Station between Iganmu to Mile 2 at the cost of $182 million.

“This was captured in the CRCC’s report in 2010 and is now being falsely assumed as the cost of implementing the two rail lines.

“The Lagos State government had intended to implement the red line as the first rail line but due to the unavailability of the corridor as a result of the constraints contained in the railway Act for using the corridor, it decided to concentrate efforts on the blue line. The survey and design for the red line was therefore stepped down.

“The project’s global cost of about $1.17 billion as contained in the Lagos state government document on the rail project is the verified project cost of the blue line rail project as at the time it was approved in 2009.

“The project includes construction of the civil works particularly fixed infrastructure; rolling stocks, signalling and telecommunication, operational control centre (OCC), fare collection system, maintenance depot and equipment, power generation and supply, fencing and security of entire alignment which are currently on-going.

“The government has continued to implement the rail project within the global contract cost.

“On the comparison of the blue rail line with the Addis Ababa light rail project, it must be stated that rail construction worldwide is not compared on the basis of like-for-like because of difference in terrain (swamp, lagoon, removal of ship wreckages), design of project (elevated sections and stations), infrastructure, technology (UIC60 tracks manufactured to European standard), compensation as construction passes through already built up environment, third party issues and taxation among others. The project is an urban rail project and this means that a lot of issues ranging from acquisition, payment of compensation and resettlement of project affected persons would have to be taken care of to ensure a smooth sail.

“For instance, about a third of the 27-kilometre blue line rail project is elevated, crossing swampy terrain and the Lagos lagoon where a lot of relocation, reconstruction and resettlements were involved.

“Construction within the swampy terrain and the lagoon entails that some piers foundation would go down between 40 and 88 metres”, the LAMATA spokesperson had explained.

However, the state government has continued to ignore the calls for openness, rather preferring to dish out figures expended on selected phases of the project.

For instance, the state governor, Babajide Sanwo-Olu, had in January 2022, said during an interview that the Blue Rail Line had reached about 94% stage and that over N100 billion will be needed to finance the rolling stock.

Some financial and developmental experts, however, queried the untidiness in the way the state government had handled information on the project’s budget.

“Yes, they have come out to clarify that the project was awarded at the cost of $1.17 billion at inception, that is more than 10 years ago.

“But what they have failed to give us is the breakdown of how the funds were utilised.

“Another pertinent question the government is failing to answer is how much has gone into cost variations during the course of building the project.

“Are they going to tell us that the cost of building the project which was put at $1.17 billion more that 20 years ago is still the same, given the economic reality in the country now.

‘I can tell you that if the budget for the project was put at $1.17 billion in 2010, it would have doubled, if not tripled by now.

“So, if the cost has risen to around $3billion going by today’s realities, why are they not informing the taxpayers?

“Who prepares and approves the cost variations and why are the keeping silent on it?”, a developmental economist, Dr. Peju Ibiyemi demanded.

In his own comment, Architect Biodun Falegan, a builder and quantity surveyor, queried the $1.17 billion budgeted for the project in 2010, insisting that it is no longer realistic.

“The Lagos State government has not been forthcoming on whether it has reviewed the project cost upward or downwards.

“That leaves us with no other option than to adopt the officially given figure of $1.17 billion when doing our analysis.

“But we all know the truth. The arrived figure, based on the old estimate, will be far off from the actual figures.

“For instance, a 50kg bag of cement sold for between N1,300 and N1,400 in 2010. Today, it is between N4,700 and N5,000.

“So, the question is: ‘what is the actual cost of the rail project now since the $1.17 billion initial budget no longer suffice”, Falegan demanded.

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