Lagos State Governor, Babajide Sanwo-Olu, stated that the state raised the sum of N100 billion to fund the ongoing rail construction project.
He disclosed this on the Sunday Politics programme aired on Channels TV on Sunday.
The governor listed some of the hindrances his administration faced at the initial stage of the rail project construction, stating that the Peoples Democratic Party (PDP) did not give the state the “right of way for the Red Line now” because the state was not “with the Federal Government at that time”.
He said that the state had taken advantage of the window of opportunity to establish the Red Line, as the goal of the FG was to link states, which would stall Lagos’ goal of an intracity rail network.
Sanwo-Olu Said, “Federal Government went on to want to do Lagos to Ibadan then to Kano. If we miss the opportunity now, and we don’t quickly do the Red Line; what will happen is that once they start full operation, you will not be able to have an intracity rail network.”
On the cost of the project, the governor said that the rail project’s major hiccup was funding, as “cost is critical […] it was a major problem”.
“Unfortunately, I don’t criticise my predecessor, but indeed for whatever reason, he never funded it. So, when we came back in the last two years, the contractor has since significantly moved from 55 percent, now we are about 93-94 percent in terms of physical construction of phase one.
“We’ve also raised finance for the rolling stock.”
When asked how much finance was raised to advance the project, Sawno-Olu said, “It’s a lot of money, it’s well over N100 billion […] it’s largely government funding.”
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Return on Investment
When asked about the return on investment from the rail project, the governor said, that there “is always that little element of subsidy that might come in there.
“Subsidy in the area of ensuring that you have price regulation because we’re going to have concessionaires who are going to put the rolling stock on it. All we’re developing is the infrastructure.
“With our concessionaires, it’s to say to them, we must have some stringent passenger road. You can’t just wake up and say you want to increase the fare to a certain amount.
“You must have the breather to know that you’ll recoup your investment over a longer period of time so that it because accessible and affordable to the citizens.”
