Recently, the approval granted the Lagos State Government on the Lekki Concession Company (LCC) Loan by the State’s House of Assembly was misrepresented by the media. However, the Chairman House Committee On Finance and Lawmaker representing Somolu Constituency 1, Hon. Rotimi Olowo, in an interview with Assembly Correspondents, explained in details what the House approved for the state government. Olowo, also, fielded questions on the amended Pension Law regarding the reduction in pension of ex-governors and their deputies. OKUNADE ADEKUNLE was there.
There is misconception on what the House actually approved for the Executive arm of Lagos State Government. Can you shed more light on this?
Let me put the record straight, the request of Mr Governor basically has to do with the restructuring of the loan. You have seen the fact that Lagos state government took over LCC as far back as 2014 because there was the need for the state to extend the infrastructure to Epe. There are a lot of investors especially Dangote coming up along that corridor. It is going to be mutually beneficial because it will generate employments and they (investors) will pay taxes to the state government. The restructuring Mr Governor sought for was the conversion of the loan from private to public sector with sovereign quarantee by the federal government. This connotes two different things, we have bought over LCC since 2014, LCC is wholly owned by the State Goverment.
Lagos state goverment has 75 percent of the shareholding while office of PPP has 25 percent and when you look at it, it is a matter of semantics, Lagos state also owns PPP, it is the state government that is owning LCC at 100 percent. Looking at the condition of loan from Africa Development Bank (AFDB), it comes at a private sector driven loan which comes at a higher interest loan with 4 percent and is going to add pressure on the loan obligation of the State. So the state government through the Commissioner for Finance is smart enough, with the move that if LCC is owned by the state while not go for public sector loan which is just about 0.8 percent and with a better gestation period of about additional 15 years. The private sector loan would have lapsed in 2023 which is about two years away, we now reasoned with the state goverment.
There was an agreement since 2019 but because nobody had approached us for a concurrence, we didn’t know but when they came to us, we looked at the benefits therein, that is going to extend additional 15 years, which is going to extend to 2034 and with a lower interest rate of about 0.8 percent when you add London Interbank Offer Rate (LIBOR) to that it’s going to be about one percent. This was what they came for and that was with we approved. The need for the clarification is that AFDB and other agencies might think we are playing pranks, we are not playing pranks, the ownership was not part of approval process. So the state goverment can take the approval to FEC, so that we can start paying the loan. Even there is a local aspect of the loan, when the Commissioner came for approval and they downwardly reviewed the interest rate, the Governor had been so proactive and is going to reduce the pressure on the State Goverment in terms of obligation.
But the executive arm had earlier debunked the ownership report in the media.
Exactly, the reason why I called for this conference is that if the executive came for approval and there was misconception, if they clarified, we need to also do the clarification for concurrence so that nobody would assume probably the executive was playing pranks.
What measures are in place for the repayment of the loan, because currently the collection of tolls at Lekki is suspended?
The toll gate is under construction and we cannot allow the loan to be mounting before we begin to pay. We cannot allow the loan to be mounting, whether LCC is operating or not, the fact reamins that we will still pay the loan, there is irrevocable standing rule to repay with the federal government.
That means we have to be paying bi-annually. Secondly, we don’t want the loan to mount to a point that our children will continue to pay for the loan, in the sense that we got the loan and they (children) inherit it, we better structure the loan in such a manner that in the next eight or nine years, we should have paid it all both the local and the international aspect of it. So to ensure repayment, we will always see that it is included in the annual budget. You will appreciate the fact one of the two toll gates is undergoing reconstruction, before the year runs out, we will complete that and obviously we will see what they are doing. I am the chairman House committee on Finance, on quarterly basis we will see their books. For the past eight years, they have been paying the banks conscientiously for the local aspect of the loan. What the state is asking for is downward review, so that the state will not be too overwhelming.
who are the core investors in the LCC?
The executive didn’t tell us who are the investors in the LCC. What we have said is that we are not just buying it, it has been bought over since 2014 and that has been made to rest. Lagos state goverment owns Lekki Concession Company Limited 100 percent.
Few weeks ago, the House reviewed downwardly the pensions of ex-Governors and their deputies despite being on recess, what made you cut short your break, since the issue at stake was not so urgent?
We came from recess because of this approval (LCC loan). The approval was expected before the end of August and our resumption is in September and it was consumated since 2019. Having lost two years, is it possible for us to cut short our recess and be alive to our responsibility and inasmuch as a lot of us are still in Lagos, because there is restrictions as a result of issue bordering on covid, that was why many of us didn’t travel.
So the primary reason why we called off the recess is because the issue at hand and that has to do with the loan which is time bound. So there are other issues pending and that of pension was one of them and what we have done is in the interest of the state. We don’t need anybody before we do the needful, it is within our legislative competence to moderate what we give public office holders and what we have done basically is to look at how much is due to them.
The essence of keeping pensions for public office holders is for them to be motivated and Governors who have worked either for four or eight years. If you have worked conscientiously, how much is the salary we are talking about? The salary of Lagos State Governor is not up to 1 million naira and 50 percent of that for the ex-Governors. To me, I think we are not even fair to them. I proposed 100 percent but majority of the members said 50 percent is okay and that is about 500,000 naira. I told them on the floor of the House that the day I went to Baba Jakande’s house, he was using lantern, because his generator had packed up and you would appreciate the fact that this man worked assiduously for the state to the detriment of his family. He was all over, building Lagos and at the end of the day, when he needed Lagos, nobody remembered him.
It was the State House of Assembly that first assisted him by giving him Avalon car, so if somebody had worked for Lagos state, he needs to be rewarded. And we don’t have the same socio-economic status with other states, other states are wallowing in poverty because they are not as proactive and they don’t have great governors as ours and we have governors who had worked and others are coming, how do we appreciate them? So what is 50 percent? When you look at the law we amended, there are other aspects like providing houses for the ex-governors and their deputies and if it has to be a choice place in Lagos state and in Abuja, obviously it is going to be in Banana Island. Do you know how much a plot of land is sold in Banana? Somebody who is not governing again, why will he have a house in Abuja? What’s our business in Abuja? We removed it completely.
That is why a lot of people suppose to appreciate the House. This is what we have done, despite belonging o the same party, APC. And I am very sure the party will be happy with us with what we have done. To me, what we have done is to satisfy our conscience and spoken for the majority of Lagosians. so many people have called me and said what we have done is the best, especially as regard owning houses in Lagos and Abuja. When I was in Baba Jakande’s house, I wept because I least expected that the man would be treated in such manner. It was thereafter that some highly Lagosians started providing generator and others and today the man is dead.
Do we also have in the pension law, area that touches on past Speakers and their deputies?
Yes, there are three arms of government, one of them is professional and that is the judiciary. They earn their pensions when they leave office, head of judiciary is the chief judge of the State, he is in service and he is getting all his remuneration, by the time he leaves office as a chief judge or judges, they are on pensions. When you look at the executive arm, they also have it, but the speaker and deputy, they don’t earn and whoever is the speaker today is the symbol of the House.
If you look at the former speakers, they are being assisted with the help of their fellows. We are not saying other lawmakers should be pensionable but the speaker and the deputy who are the head of our own institution, should be given. So what is good for the goose is also good for the gander. I am saying it without mincing words, that what is applicable to the judiciary and the executive must be applicable to the legislature as well. Nobody can punctuate what we have done.