Lagos to Partner Private Companies for Portable Water Management
The Lagos State Government has an ambitious programme to take treated water to the doorstep of every building in the state. The government hopes to achieve this through several concessions that will last between 20 to 30 years, reports Bennett Oghifo
The Lagos State Government has a master-plan for the production and distribution of treated water to every household and building in the state. The projected finance-base for these concessions and other works is put at $3.5 billion, said Holloway, who was accompanied by some principal officers of the Lagos Water Corporation (LWC), including Executive Director, Operations, Lagos Water Corporation, Deji Johnson and the Executive Director Finance and Administration, Mr. Diran Akingba.
The proposed concessions do not mean privatisation, according to Managing Director, Lagos Water Corporation, Shayo Holloway.
He said there were “deliberate misconceptions and rumours of secret plans to “Privatize” Lagos Water Corporation. Nothing can be farther from the truth!”
The Lagos State government, Holloway said has never at any time considered the sale or divestment of any of LWC water assets. “On the contrary, the Public Private Partnership (PPP) law of 2004 only seeks to “partner” with the private sector for accelerated development of water infrastructure to meet the current water demand in Lagos State, which presently stands at 540 million gallons per day (MGD) for a population of 20 million.
“This is not ‘privatisation’ where assets are sold off to the Private sector,” he said, adding Public Private Partnership is indeed a veritable strategy for accelerated infrastructure development, using private capital.
He said, “Our total available water assets, even if run at 100 per cent efficiency, stands at 210 MGD (million gallons per day), leaving a shortfall or deficit of 330 million gallons per day. Hence, only 9 million of the 20 million will get water, while 11 million will still be without. The current shortfall is characterised by proliferation of boreholes all over the state, with its attendant environmental and health hazards.”
He said it is projected that by year 2020, the population of Lagos State will be about 29 million, saying that by that time water demand would be 733 million gallons per day. “This will make Lagos the 3rd largest megacity after Beijing and Mumbai.”
Studies, he said have indicated that if the proliferation of boreholes is not promptly addressed, in about 10 years, Lagos runs the risk of saline water (salt water) from the Atlantic Ocean massively migrating inwards to pollute ground water.
“This will make all boreholes draw salt water. This phenomenon is already happening to boreholes along the coastal region of Lagos.”
He said majority of domestic boreholes draw water from shallow unconfined aquifers, which are prone to pollution with attendant health hazards. “Confined aquifers which are protected from pollution run as deep as 200 meters and more.”
He tendered statistics by WHO/UNESCO, which says 66 million Nigerians do not have access to potable water; Premature death from water related diseases cost the country $2.5 billion, while $191 million was spent on healthcare for diarrhea alone in 2012.
Holloway said to address the current water demand and meet the projection of the near future, LWC developed a Water Master plan to take the State from its current 210MGD to 745MGD by year 2020, through the development of additional large water schemes taking raw water from Rivers and the Lagoons for treatment into potable water.
He said, “The estimated cost of this is projected at $3.5 billion dollars. This is an investment which the State government cannot solely undertake as this will take the State government 2 ½ years to fund with every naira inflow going into the water sector only!
“As there are other equally demanding sectors (Health, Education, Security, Social services, etc), no State government can fund this size of investment. However, we have commenced the implementation of the Master Plan with the ongoing construction of Adiyan phase II being funded by the State.
This will give us additional 70 million gallons per day; and will be completed in 2016. It is pertinent to state that this is coming 23 years after Adiyan phase 1 due to the huge investment required. In addition to this, the Lagos State Government completed the Otta-Ikosi water works this year to serve 11 towns between Ikorodu and Epe.”
He said on account of the growing population, the government thus “seeks to partner with the private sector, to accelerate the development of water infrastructure with private capital to make water available to all before boreholes start going saline.
“Such investments typically are recovered over a negotiated concession period of several years in order to make water tariff affordable to the public. Concessions usually range from about 20 to 30 years depending on size of investment, and financial model.”
He said the concerns of affordability by the vulnerable segment of the society would be addressed by agencies like the Lagos State Public Procurement Agency (to ensure transaction transparency); Office of PPP (to ensure value for money); Lagos State Water Regulatory Agency (to ensure protection of investors and the public) and Lagos State Ministry of Justice (to ensure equity and fairplay).
Also, they would employ a commercial mechanism to safeguard the vulnerable segment of the society, calling this mechanism as “Cross-subsidisation’, whereby the more affluent segment of the society who will consume more water, and pay the full commercial rate; indirectly subsidizing the vulnerable segment. “A win-win situation whereby water of good quality and regularity is made available to all.
“We must all be accustomed to television commercials abroad, where vulnerable children are shown fetching water from a brackish pool. In some instances, we see animals drinking from same pool! At the end of the advertisement, generous donations are requested to support water schemes (boreholes) in Africa.”
He called on everybody to take part in the quest for sustainable water management, saying “We need to take our collective destiny in our hands by taking the bull by the horn to find more creative ways to bridge the financial chasm by partnering with the private sector to drive the necessary reform of the water sector! This is what Public Private Partnership (PPP) is all about.
“The Management of Lagos water corporation unequivocally reiterates that the State government is not divesting or selling off water assets. On the contrary, it is a strategy to grow our existing water assets to make water available to all; while LWC remains a Holding company, with LWC staff managing the various PPP contracts thereof.”