Lagos electric bus plan lacks transparency — Funso Doherty

Given its proposed scale, public significance, potential cost, and the limited information about the state’s electric bus project, Funso Doherty, the governorship candidate of the African Democratic Congress (ADC) in Lagos state, is calling for more transparency.

Doherty, in an open letter to Ope George, special adviser, office of Public Private Partnerships (PPP), asked him to shed more light on the proposed PPP by Lagos Metropolitan Area Transport Authority (LAMATA) and Oando Clean Energy.

He said the disclosures made by the government are manifestly inadequate despite the state’s law requiring full disclosure.

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Last June, LAMATA signed a Memorandum of Understanding with Oando Clean Energy to roll out electric mass transit buses, charging infrastructure, and service centres (EV Infrastructure Ecosystem).

Over 12,000 buses are expected to be rolled out and transition the current combustion mass transit buses to electric.

The terms of the MOU entered into by the Lagos government with Oando have not been disclosed, including whether it is binding or non-binding, and what commitments are being made by, or required of, by either party under the MOU and/or any subsequent and related agreements, Doherty noted.

“Concession Agreements are subject to approval by the House of Assembly. Concession Agreements are defined in the PPP law as “any agreement between the Government and any person, firm, company or limited liability partnership for the construction, maintenance, operation or management of public infrastructure, assets and facilities over an agreed period,” he said.

Doherty also said that the PPP office and LAMATA fall within the designation of “procuring entities” under the LASG public procurement law, which generally provides open competitive processes for significant procurements of goods and services.

“It is not evident from the information so far disclosed in the public domain, that these laws and provisions relating to PPPs were either complied with or not applicable, before commencing this partnership,” he said.

“It is alarming that, according to the recent disclosures, the partnership is now considered to have moved forward into a pilot operational phase, by Oando having taken delivery of some buses and other operating infrastructure.”

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He added that there is substantial information about Oando and its affairs in the public domain. According to Doherty, the Group has yet to file audited accounts since the 2020 fiscal year. It is currently in default on its regulatory obligation to file audited accounts for both 2021 and 2022.

“In its most recently published (2020) audited accounts filed with the Stock Exchange, Oando reported substantial losses for 2020 and 2019 of N140 billion and N207 billion, respectively. Its current liabilities far exceeded its current assets by N578 billion and had negative Shareholders Funds (i.e. net liabilities) of N67 billion as of December 2020,” he said.

“In its report, Oando’s independent auditor expressed the opinion that there was Material Uncertainty regarding the Group’s ability to continue as a Going Concern.”

Doherty said in the letter that in 2021, Oando PLC reached a settlement with the Securities and Exchange Commission in which it committed to pay a monetary penalty and to improve its Corporate Governance and Internal Controls. This was under sanctions that had been imposed on it by the SEC following an investigation of petitions received against the Company

“In light of these matters, which are matters of public record, LASG’s choice of Oando as its partner for this initiative, is baffling,” he said.

According to Doherty, in PPPs, commitments are made and/or resources deployed on behalf of the public in arrangements intended to advance both public and private interests. Consequently, wherever they are employed, there is an increased need for transparency, due diligence, and demonstrable good faith. Disclosure and engagement are standard global practices that help foster public confidence and acceptance of PPPs.

“I hereby call on the PPP Office, the Public Procurement Agency, and LAMATA to stay further action on this proposed partnership, to shed more light on it and address these concerns before proceeding further,” he said.

“The public needs to understand the nature and scope of this initiative and the procedures undertaken by LASG to ensure due process, value for money, and accountability. In all such initiatives, it should be seen that the public interest is protected and served in accordance with applicable laws of the State.”