Senior Advocate of Nigeria, Abiodun Olatunji, has expressed concerns over the federal government's recent pronouncements and actions regarding the Benin-Asaba Expressway and the ongoing intervention activities on the highway. He advised the government to tread cautiously in considering any revocation of the subsisting concession agreement governing the expressway. Olatunji was invited to provide his legal opinion on the issues surrounding the concession, including the dispute between the Federal Ministry of Works and the Benin-Asaba Expressway Concession Company Limited.
According to Olatunji, the absence of evidence of abandonment, repudiation, or unreasonable delay in the execution of repair works may not constitute sufficient grounds for the unilateral revocation of the 25-year concession. His review of the Concession Agreement assessed the relevant contractual and legal implications, considering the extent of the Federal Government's powers to intervene in the project, the circumstances under which the concession may be terminated, and the distinction between emergency intervention measures and termination of the concession itself.
The legal opinion comes amid an escalating dispute between the Federal Ministry of Works and the Benin-Asaba Expressway Concession Company Limited over the condition and reconstruction of the 125-kilometre highway. The Ministry has alleged breaches of certain provisions of the concession agreement by the concessionaire and has reportedly proposed a mutual termination of the arrangement. Olatunji's opinion was subject to the provisions of the full Concession Agreement, including clauses relating to default, cure periods, step-in rights, termination, compensation, lender protections, and other contractual safeguards.
The Federal Ministry of Works has expressed concerns over the deteriorating road conditions, which have contributed to severe gridlock and hardship for motorists travelling between Benin and Asaba. Minister of Works, David Umahi, had previously expressed dissatisfaction with the state of the project following an inspection of the road alongside Edo State Governor Monday Okpebholo. Umahi subsequently outlined possible options for resolving the dispute.
However, Olatunji's review raises questions about the extent to which the concession agreement can be altered or terminated without strict adherence to the procedures stipulated in the contract. He stated that the Minister of Works does not possess a general or personal power to revoke the concession at will, noting that the contracting party is the Federal Government acting through the Ministry.
Olatunji emphasized that the Minister has no general or personal authority to revoke the concession at will. He further argued that any revocation of the concession must be done in accordance with the procedures stipulated in the contract. The senior lawyer's opinion highlights the need for the federal government to carefully consider the contractual and legal implications of its actions regarding the Benin-Asaba Expressway concession.
The dispute over the Benin-Asaba Expressway concession has significant implications for the development of infrastructure in Nigeria. The 25-year concession agreement was entered into to facilitate the reconstruction and maintenance of the highway. The federal government's actions will be closely watched by stakeholders, including investors, motorists, and residents of the affected areas.
Key points
- The federal government must tread cautiously in considering any revocation of the Benin-Asaba Expressway concession.
- The Minister of Works does not possess a general or personal power to revoke the concession at will.
- The concession agreement must be altered or terminated in accordance with the procedures stipulated in the contract.
