FINAL ASSESSMENT REPORT

Private Sector Participation in an

Integrated Transport System in Lagos,
Nigeria – The Mega Terminals
(Interstate Bus Terminals) Project
Prepared for:

World Bank
Prepared by:

CPCS
In association with:
Benchmac & Ince
Osot Associates

CPCS 17447
December 28, 2018
Quality Assurance

Private Sector Participation in an Integrated Transport System in Lagos, Nigeria

CPCS Ref: 17447

Draft Assessment Report

Version Date Responsible Approval

1.0 November 16, 2018 Vidhi Mohan Philip Asante
2.0 December 28, 2018 Vidhi Mohan Jean‐Francois Arsenault
 CPCS Transcom Limited
72 Chamberlain Avenue
Ottawa, Ontario
Canada K1S 1V9
[email protected]
www.cpcs.ca

December 28, 2018 CPCS Ref: 17447

To:
The World Bank Group
1818 H Street, NW
Washington, DC 20433 USA

Dear Sir/Madam,

Re: Private Sector Participation in an Integrated Transport System in Lagos, Nigeria

Mega Terminals Project ‐ Submission of Assessment Report

We are pleased to submit the final assessment report for the above‐referenced Project
following comments from the World Bank Group.

We would be pleased to address any remaining comments or questions the World Bank may
have following the Bank’s Decision Meeting in February 2019.

Yours very truly,

CPCS Transcom Limited

Vidhi Mohan
Project Manager
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Acknowledgements

CPCS would like to acknowledge the kind assistance

granted to them by the World Bank Group, the Lagos
State Government, including its agencies LAMATA,
LASWA, and the Nigerian Ports Authority. We also wish
to thank all other stakeholders consulted during the
project mission. Any errors of fact or interpretation are
ours.

CPCS Transcom Limited

979 Bank Street
Ottawa, Ontario
Canada K1S 5K5
www.cpcs.ca
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Table of Contents
Acronyms/Abbreviations ....................................................................................................... ii
Key Take-Away ....................................................................................................................... iv
Executive Summary ................................................................................................................. v
Introduction ........................................................................................................................ 1
The Project Context ........................................................................................................ 1
Authority of the Assignment........................................................................................... 3
Scope of this Report ........................................................................................................ 3
Task Organization ........................................................................................................... 5
Major activities ............................................................................................................... 5
Structure of this Report .................................................................................................. 9
Limitations ...................................................................................................................... 9
Diagnostic Review ............................................................................................................. 10
Overview ....................................................................................................................... 12
Review of Existing Facilities and Market Structure ...................................................... 12
Market Structure .......................................................................................................... 16
Analysis of Competing and Complementary modes of PT ........................................... 21
Case Studies .................................................................................................................. 28
Conclusions ................................................................................................................... 35
Traffic Analysis .................................................................................................................. 36
Approach to Traffic Analysis ......................................................................................... 37
Macroeconomic and Historical Demand Analysis ........................................................ 39
Data Collection and Surveys ......................................................................................... 41
Traffic projections ......................................................................................................... 44
Facility Configuration and Service Design .......................................................................... 52
Background ................................................................................................................... 54
Size and Location of Terminals ..................................................................................... 57
Service Requirements and Passenger Amenities ......................................................... 60
Conceptual Design and Layout .......................................................................................... 64
Concept Drawings ......................................................................................................... 64
Capital Cost Estimates .................................................................................................. 68
Operating Cost Estimates ............................................................................................. 71
Terminal Access Charges .............................................................................................. 73
Financial and PPP Analysis ................................................................................................. 76
Introduction .................................................................................................................. 76
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Financial Model Assumptions and Structure ................................................................ 77

Model Assumptions ...................................................................................................... 78
Economic Analysis ......................................................................................................... 83
Financial Analysis .......................................................................................................... 88
Introducing Private Sector Participation in Mega Terminal ......................................... 98
Next Steps ................................................................................................................... 101
Risk Analysis ................................................................................................................ 103
Appendix A: List of Stakeholders consulted ........................................................................ 115
Appendix B: List of Secondary Data/reports reviewed ....................................................... 117
Appendix C: Questionnaire Template used for the survey .................................................. 119
Appendix D: Key State/Federal approvals required for the project .................................... 120
Appendix E: Market Sounding audience ............................................................................. 121
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Acronyms/Abbreviations
ALBON Association of Luxury Bus Owners of Nigeria
BOT Build Operate Transfer
BPP Bureau of Public Procurement
BRT Bus Rapid Transit
CA Concession Agreement
CMS Christian Missionary Society
CPCS CPCS Transcom Limited
DTIDCL Delhi Transport Infrastructure Development Corporation Limited
FAAN Federal Airports Authority of Nigeria
EBITDA Earnings before Interest, Taxes, Depreciation and Amortization
EBIT Earnings before Interest and Taxes
FGN Federal Government of Nigeria
FMEnv Federal Ministry of Environment
FMOT Federal Ministry of Transport
FMPWH Federal Ministry of Power, Works and Housing
GIF Global Investment Facility
GIS Geographic Information System
Ha/hA Hectares
HSV Hourly Service Volume
IA Implementing Agencies
ICD Inland Container Depot
ICRC Infrastructure Concession Regulatory Commission
IR Inception Report
ISBT Interstate Bus Terminals Project (Mega Terminals Project)
IoT Internet of Things
KL1 Kirikiri Lighter Terminal Phase I
KL2 Kirikiri Lighter Terminal Phase 2
Km Kilometer
LAGBUS LAGBUS Assets Management Company Limited
LAMATA Lagos Metropolitan Area Transport Authority
LASTMA Lagos State Traffic Management Authority
LASWA Lagos State Waterways Authority
LASG Lagos State Government
LBSL Lagos Bus Services Ltd
LMA Lagos Metropolitan Area
LOS Level of Service
LSPPA Lagos State Public Procurement Agency
LSPPP Lagos State Public Private Partnership
LSSC Lagos State Safety Commission
LSWTP Lagos State Water Transport Program
MU Management Unit of Global Investment Facility
N4P National Policy on Public Private Partnerships
NPA Nigerian Ports Authority

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NRC Nigerian Railway Corporation

NSC Nigerian Shippers Council
O&M Operation and Maintenance
OD Origin Destination
Pphpd Persons per hour per direction
PPIAF Public Private Infrastructure Advisory Facility
PPP Public Private Partnership
PSP Private Sector Participation
PT Public Transport
RfP Request for Proposals
RoW Right of Way
Sqm Square meters
STMP Strategic Transport Master Plan
TEU Twenty Foot Equivalent Unit
TPPAF Truck Parking and Port Access Facility
WP Working Paper
WB World Bank

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Key Take-Away
The purpose of this report is to identify and evaluate the feasibility of establishing mega
terminals (interstate bus terminals) bordering the State of Lagos in order to rationalize public
transport in the Lagos Metropolitan Area (LMA) ‐ an important element of LAMATA’s overall
vision to address road congestion in the LMA. LAMATA’s vision is for mega terminals to be
developed with PSP. Specifically, LAMATA envisages providing land for the terminals while
potential private sector partners would develop and operate the terminals on a Build‐Operate‐
Transfer basis1. To make such a PSP structure viable, pairing the mega terminals with
commercial developments is essential.
There is a great deal of complexity regarding the optimal PSP structure to develop mega
terminals in Nigeria, especially as it relates to regulations and enforcement. Regulations
accompanied with strong enforcement will be required to ensure patronage at the terminals
(and thus, the terminal operator’s ability to collect access charge revenues). In the absence of
regulation with enforcement, it would be difficult to engage PSP in any meaningful way (i.e.,
through significant risk transfer). However, the Federal Government’s commitment to enforce
regulations regarding the use of the on‐site parking facility at the Murtala Muhammed Airport,
where there is a 500 Naira access charge, should be considered as a strong precedent.
Five mega terminal locations were identified for this mandate. This report provides an in‐depth
analysis of the potential traffic that can be expected at each of the proposed terminals which,
in turn, informs the ideal configuration of each terminal. This is followed by an assessment of
terminal development costs, operating costs and potential access charges.
Based on a conservative estimate of access charges (varying between 1,500 and 6,000 Naira
depending on the type of passenger vehicle), each of the five terminals is operationally
profitable. Furthermore, all but the Epe terminal have scope for PSP with significant risk
transfer, including revenue risk. As such, we recommend that the Epe terminal be excluded until
traffic prospects improve while the others can be developed as Design‐Build‐Operate‐Maintain‐
Transfer (DBOMT) with the private sector financing the development. Though, in some cases,
there may be scope for the private sector to also finance land acquisition, we recommend that
this remain with Government as envisaged by LAMATA. The next steps are:
1. As an immediate priority, Government should start consulting with private bus operators
and their unions, explaining to them the mega bus terminals initiative, and how this will be
of benefit to them. This will assist in quelling anticipated resistance and showcase to
potential domestic and international investors the seriousness of Government in developing
the terminals with PSP.
2. Commence detailed and targeted market sounding once the above is sufficiently underway.
The aim of this task is to receive valuable feedback on (1) relative attractiveness of terminals,
(2) terminal configuration, (3) access charges and regulations, and (4) commercial potential
at each of the terminals
3. Secure public funding for land acquisition (as necessary).
4. For those terminals where there is strong interest, prepare tender documents towards a
DBOMT type of PPP with revenue risk transferred to the private sector.

1
Concept Note – Establishing Gateway Interstate Mega Bus Terminals

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Executive Summary
This assignment “Private Sector Participation (PSP) in an Integrated Transport System in Lagos”
is intended to assist the Lagos State Government (LASG) for three identified transport sector
initiatives with potential for private sector participation: the Interstate Bus Terminals Project
(Mega Terminals/ISBT Project), the Lagos State Water Transport Program (LSWTP), and the
Truck Parking and Port Access Facility (TPPAF) using information and communication
technologies. The overall objective of three projects is to reduce road congestion in the Lagos
Metropolitan Area (LMA).

The Mega Terminals project is an important element of LAMATA’s overall vision to address the
road congestion in LMA, driven by the Strategic Transport Master Plan (STMP). With average
travel speeds during peak morning and peak evening being less than 19 miles per hour in most
parts of LMA, this project assesses initiatives to reduce road congestion through the pursuit of
integrated transport projects. The focus of this workstream is to create connectivity hubs (Mega
Terminals) at gateway locations where most interstate bus traffic enters LMA. The purpose of
the Mega Terminals is to permit the transfer of passenger between interstate buses to Lagos
State (or city) buses, and restrict movement of interstate buses within LMA and thus reduce
road congestion. LAMATA identified the following 5 potential locations where such terminals
may be located:
Figure ES ‐ 1: Potential locations for Mega Terminals

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Existing Bus Parks catering to inter‐state buses

Inter‐state buses coming into and departing from Lagos city use a network of parking sites and
garages most of which are privately owned to drop off and pick up passengers. These sites are
located all over the city, contributing to traffic congestion and gridlock, as well as being a safety
hazard. Some of these buses park illegally on the side of the road, adding to the problem.

There exists no official baseline for inter‐state buses. An internal survey conducted by LAMATA
identified over 80 interstate operators currently utilizing privately owned bus parks across 20
locations within Lagos. Another survey conducted by a private company Planet Projects (2017)
identified over 145 private bus parks clustered across 39 locations, and the number of operators
to be over 150. In most cases, there are no definite boundaries or fencing at these bus parks.

There are over 5,600 bus trips per day to and from these parks, with close to 65,000 passengers
using these services daily. Furthermore, the number of bus trips varies significantly by area.
While Oshodi and Ojota account for over 700 bus trips per day, others like Ishaga, PPL and Alaba
account for less than 10 trip a day. Similarly daily passenger numbers also show great variation
with Oshodi, Ojota, and Ikorodu having over 5,000 inter‐state bus trips and some areas having
less than 100 trips.
In terms of origin and destinations of the interstate bus passengers, a sub‐component of all
passengers, the highest number travel to and from the neighbouring states of Ogun and Oyo,
with over 13,000 passengers per day each. These two states account for 45% of the total
passenger demand. Other popular destinations are FCT and Edo state, but they only average
around 4,000 passengers daily.

Key Issues
 As inter‐state bus network is informal and unorganized and in private hands,
enforcement and incentives to use Mega Terminals will be key.
 Last mile connectivity to ensure a positive transit experience for passenger will be
fundamental;
 The Bus reform agenda envisages a transformative approach to Intra‐city bus
operations; integration with Mega Terminals will be key; and
 Identification of heavy traffic corridors and estimates of inter‐state bus trips are pre‐
requisites to identify the best locations and terminal capacity for the Mega Terminals.
Stakeholder Concerns
Some of the bus parks/garages are owned/operated by larger owners of bus fleets and used to
park their own buses with some of the spare capacity being rented out to smaller bus operators.
With the advent of Mega Terminals, the movement of the inter‐state buses will be restricted to
the outskirts of LMA which may have the following impact on the bus owners and bus park
operators:

 All Bus Operators ‐ Bus revenue may decrease as the passenger trip will now
terminate earlier (and therefore serve a shorter distance) for the passenger and
therefore the fares may also decrease (from the mega‐terminal, passengers will be
expected to transfer to intra‐city buses or other rail/water based transport or private
taxis)

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 Bus park owners who are also bus fleet owners –will now have land or a facility which
they will no longer be able to use for the purpose it was intended for and will now
have to find an alternative use for that land. Moreover, as our financial analysis will
show, they would need to pay the Mega Terminal operator some form of user fees
for parking their buses.
 Bus park owners who rent space to other smaller or solo bus owners ‐ they would
now have to forgo the parking fees which they charge for buses to park on their land.
They will have to find an alternative use.
 Small bus operators who currently rent space at private bus parks – they will likely
have access to better facilities, but will also likely face a small decrease in revenue.
 Passengers – The passengers would now have to transfer to another public or private
mode of transport for commuting from the Mega Terminal to (from) their eventual
destination (origin) within Lagos, which could lead to higher cost and journey time.
To this extent, we can expect resistance to the project from various quarters including
passengers, bus operators and bus park owners. There needs to be a large scale awareness
creation and sensitization programme to build consensus among stakeholders.

Traffic Modeling and Forecast

Macroeconomic Factors
The key macroeconomic factor driving the demand for inter‐state bus services in Lagos will be
growth in GDP (for Nigeria as a country as a whole and the state of Lagos in particular),
population and the rate of urbanisation.

Apart from a review of secondary data (LAMATA survey and Planet Projects’ data), the team
also undertook primary survey.

Primary Survey data

To validate and enhance the existing data, the project team undertook surveys of interstate bus
service providers and passengers at various locations. In total, surveys were conducted at 25
locations which have a high concentration of inter‐state bus parks in Lagos. Some key
observations are summarised below:

 Majority of buses are 14‐18 seater capacity, with most running at full capacity. These
are combined with many smaller vehicles and some larger luxury buses;
 Many of the bus parks are just open spaces at the side of the road with no or little
facilities available for passengers and drivers (sometimes not even public
conveniences);
 Bus parking fees is unregulated and varies across parks and type (and capacity of bus);
it ranges from Naira 200‐1,000 per trip or per day for a 7‐ 18 seater bus to Naira 2,800
for a bus plying on an international route. Some luxury buses are charged as much as
Naira 15,000 per trip at some parks;
 Security at the parks was very lax; and
 Last mile connectivity is poor.

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Traffic Modelling Methodology

The combination of the CPCS survey data, which also correlates with the Planet Projects data,
indicates that there are approximately 6,200 interstate bus services to and from Lagos every
day, carrying approximately 71,000 passengers.

We mapped the existing bus parks to determine what the most common origins/destinations
are of the buses using the motor parks. Each of these motor parks were then allocated to one
or more of the 5 mega terminal locations, based on their location on the key highways in and
out of Lagos. The five gateway corridors connects Lagos to other parts of the country and other
West African countries. Based on anecdotal evidence, the Lagos‐Ibadan (E1) expressway
accounts for the largest share of traffic in and out of Lagos and it followed by the Lagos‐
Abeokuta (A5) expressway. While there are no recent bus traffic data across these five gateway
corridors, a 2016 study of freight traffic in Lagos provides an indication of the distribution of
travel demand across the corridors and confirms that the Lagos‐Ibadan (E1) expressway is the
main gateway corridor in the city.

Given historic demand, macroeconomic factors, future development plans and the location of
the individual mega terminals, Table ES‐1 outlines our assumed growth rates of passengers for
each individual mega terminal in the base case scenario:
Table ES ‐ 1: Interstate Bus Traffic Annual Growth by Mega Terminal
2018‐28 2029‐37
Agbara 6% 4%
Sango 7% 5%
Berger 7% 5%
Odogunyan 5% 3%
Epe 6% 4%
Source: CPCS Analysis

With respect to the terminal location at Epe, given the plans for new city development along
the Lekki/Epe corridor, as well as new Dangote oil refinery, there will potentially be additional
passengers using the Epe mega terminal from 2020 onwards. To reflect these additional
passengers, the forecasts for Epe have been increased by 5% in 2020 and 5% in 2021.

Traffic Projections
The traffic projections are provided in Table ES ‐ 2 and a Map is presented in Figure ES ‐ 2.

The traffic forecasts indicate that there is a significant variance in the number of buses to be
handled daily between individual parks. In 2018, Epe will handle around 330 inter‐state buses
per day, Agbara will have to handle nearly 3 times that volume at around 981 buses a day, while
Berger, which is expected to be the largest Mega Terminal, will handle over 3,000 interstate
buses and over 40,000 passengers per day.

While the figure for number of buses to be handled appears high, it must be noted that the
majority of these buses have a capacity of less than 20 passengers. Moreover, as the number of
passenger grows, the number of buses is expected to remain within a narrow range as the
average vehicle capacity will increase as the composition of the bus fleet is adjusted.

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Global Comparisons
Based on the number of buses handled per day, the proposed terminals are not significantly
larger than similar terminals in other developing countries. For example:

 Swami Vivekanand Inter State Bus Terminus (New Delhi, India) handles between
1,800 to 2,000 interstate buses a day, and a similar number of intra‐city buses, with
an average capacity of over 70 passengers per bus aggregating to 280,000 passengers
daily.
 Mien Dong and Mien Tay Bus Terminals (Ho Chi Minh City, Vietnam) currently handle
around 750 buses a day, though they are being expanded to each handle around
1,800 buses on a daily basis, with average capacity of over 60 passengers per bus.
 Mo Chit Bus Terminal (Bangkok, Thailand) currently serves 90,000 to 100,000
passengers per day. It is being expanded to handle 150,000 passengers per day.

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Table ES ‐ 2: Traffic Forecasts

2019 2023 2028 2033 2037

Vehicle Trips Passengers Vehicle Trips Passengers Vehicle Trips Passengers Vehicle Trips Passengers Vehicle Trips Passengers
Agbara
Base 767 8,158 822 10,299 928 13,783 866 16,769 589 19,617
High 789 8,389 945 11,841 1,227 18,219 1,259 24,382 923 30,781
Low 745 7,927 712 8,922 697 10,343 590 11,419 371 12,361
Berger
Base 4,102 43,630 4,564 57,190 5,402 80,212 5,287 102,373 3,733 124,435
High 4,217 44,853 5,241 65,670 7,122 105,761 7,661 148,336 5,833 194,438
Low 3,987 42,407 3,959 49,610 4,065 60,358 3,614 69,971 2,363 78,753
Epe
Base 368 3,917 395 4,945 446 6,617 416 8,051 283 9,418
High 379 4,028 454 5,685 589 8,747 605 11,706 443 14,779
Low 358 3,806 342 4,284 334 4,966 283 5,483 178 5,935
Odogunyan
Base 867 9,223 895 11,211 964 14,309 857 16,588 560 18,670
High 892 9,487 1,030 12,907 1,277 18,965 1,250 24,204 883 29,420
Low 842 8,960 774 9,699 721 10,708 581 11,254 351 11,711
Sango
Base 1,017 10,819 1,132 14,181 1,339 19,890 1,311 25,385 926 30,856
High 1,046 11,122 1,300 16,284 1,766 26,226 1,900 36,783 1,446 48,215
Low 989 10,516 982 12,302 1,008 14,967 896 17,351 586 19,528
Total
Base 7,121 75,747 7,808 97,826 9,079 134,811 8,737 169,166 6,091 202,996
High 7,323 77,879 8,970 112,387 11,981 177,918 12,675 245,411 9,528 317,633
Low 6,921 73,616 6,769 84,817 6,825 101,342 5,964 115,478 3,849 128,288

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Figure ES ‐ 2: Daily Passenger Demand for Mega Terminal Sites

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Facility Configuration and Service Design

Determinants of Terminal Capacity and Design

The following factors were considered in determining the size, capacity and infrastructure to be
provided at each Mega Terminal site:

 Bus Types and Capacities: Average capacity of Inter‐state buses is anticipated to rise
from the current 19 passengers to 60 passengers in 2037 as the sector becomes more
organized and consolidation of operators occurs. Two bus types (60 and 76 seat
capacities) are expected for Lagos state buses, with a gradual transition to more
higher‐capacity buses over time.
 Flow Patterns of inter‐state bus passengers: Based on the survey conducted, flow of
inbound passengers peaks between 6am to 11am while that for outbound passengers
peaks between 4pm to 9pm.
 Dwell Times: We used ½ hour on average per passenger between arriving and
departing the terminal.
 Peak Bus Frequency: Each of the facilities is designed to accommodate the number of
buses in the terminal during the time period with the highest number. This occurs
between 8am and 9am for Lagos State buses and between 6pm and 7pm for
interstate buses.
Based on the above, we projected the maximum hourly bus frequency for each Terminal for
Base, High and Medium scenarios.

Terminal Design Criteria and Capacity

We recommend that terminals be designed to accommodate the number of buses in revenue
service based on the 2037 base case traffic scenario. The Lagos State buses will be a mix of 76
and 60 seater buses and will require parking space of 100 m2 and 90 m2 per bus. The interstate
buses will be 60 seater buses and will require parking space of 90 m2 per bus.
Table ES ‐ 3: Design Capacity and requirements

Design Capacity (buses)

Terminal Lagos State Buses Interstate Buses
Agbara 14 19
Berger 88 121
Epe 7 9
Odogunyan 13 18
Sango 22 30

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Table ES ‐ 4: Requirements for Parking for Buses Not in Revenue Service

Terminal Cycle Time Non‐revenue

(hours) Bus Parking
Spots required

Agbara 6 64
Berger 6 404
Epe 10 41
Odogunyan 8 69
Sango 8 115

We provide estimates for land requirements based on the above requirements, assuming
additional land requirements of 50% (of parking requirements) for drive lanes and passenger
walkways.
Table ES ‐ 5: Land requirement (Operational Use)

Terminal Site Land Requirements (hA) Available Land (hA)

Agbara 1.7 6
Berger 10.6 8
Epe 1.0 40
Odogunyan 1.7 155
Sango 2.9 1

While the above land requirements are for operational purposes, based on the attractiveness
of the particular sites, land maybe developed on a commercial basis for expanding revenue
base. Based on our analysis, land requirements in 2037 (under base case scenario) will exceed
land availability. This is best dealt with in future years when required by moving Lagos State bus
non‐revenue parking (or stabling) off‐site.

Core Infrastructure Facilities

Key principles on which we have based our site design include:

 Segregation of passenger and vehicle traffic by physical barriers where possible and
with painted crossing marks otherwise;
 Separate parking areas as well as entrances and exits for Lagos State and Interstate
buses;
 One way bus flow (except in exceptional cases) with saw tooth parking;
 Terminal buildings at the centre of the parking areas for Lagos State and Interstate
buses;
 Site perimeter secured by chain link fence; and separation of non‐revenue from
revenue areas by chain link fence;
 Controlled access into the terminal at all entry/exit points; and

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 Disabled friendly.
Services and Revenue Sources
 Parking spots for Lagos State buses and interstate buses to collect and discharge
passengers (Gate‐to‐gate time of 45 minutes for collecting and 15 minutes for
discharging) for an access fees
 Parking for Lagos State buses when not in revenue service (sufficient number of
spaces for all Lagos State buses serving the terminal) for a lease fee.
 Stabling, cleaning and light maintenance facilities for Lagos State buses when not in
revenue service for lease fees.
 Terminal Building with space at a lease rental for:
o ticket sales (by operators or third parties)
o passenger amenities
o retail and dining
 Park‐and‐ride and Kiss‐and‐ride facilities (some terminals).
Transit Oriented Development
Terminals are largely designed as connection hubs for interstate travellers to connect between
interstate and Lagos State buses. Larger terminals will include park‐and‐ride facilities. All ISBT
will permit entry by pedestrians. We analyze the possibility of developing ISBT into
transportation hubs by using the sites for stations for LRT lines and BRT.

Commercial Development
Based on permissible land use and building regulations, the following are the potential avenues
for commercial development that could accompany the proposed terminals in order to take
advantage of increased traffic:

 Concession stands;
 Leasing of retail/commercial space; and
 Advertising.

Conceptual Design of Interstate Bus Terminals

Based on the above, we present conceptual layouts for the terminals. The summary of the major
design components is presented in Table ES ‐ 6.
Table ES ‐ 6: Terminal Design Components

Berger Sango Agbara Epe Odogunyan

Passengers per Day (2037 base 124,435 30,856 19,617 9,418 18,670
case)

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Berger Sango Agbara Epe Odogunyan

Total Parking Areas (spaces) 613 166 96 57 100

Terminal Area Requirements 10.58 2.87 1.67 0.98 1.74

(hA)

Paved Area (SM) 75,560 20,506 11,912 6,992 12,407

Landscaped Area (SM) 26,220 6,666 3,229 1,261 3,427

Terminal Builiding (SM) 1,800 500 500 500 500

Maintenance Depot (SM) 2,000 900 900 900 900

Guard Houses (No.) 6 4 4 4 4

Vehicle Access Points (No.) 6 4 4 4 4

Passenger Access Points (No.) 2 1 1 1 1

Fencing (LM) 1,500 407 236 139 246

Economic and Financial Analysis

Economic Analysis
One of the main justifications for this project is to reduce the traffic congestion caused by having
numerous bus parks in the centre of the LMA, which are served by cars, Danfos and city buses.
Moving these bus parks out of the centre of Lagos will significantly improve travel times for
other road users. The primary benefit of this project is therefore the journey time savings
accruing to road users. The result of our economic analysis is presented in Table ES ‐ 7.
Table ES ‐ 7: Economic Valuation

Mega Terminal ENPV (USD 000) EIRR

Agbara ‐5,915 ‐1.9%
Berger 48,636 24.9%
Epe 1,549 15.9%
Odogunyan 25,976 52.7%
Sango ‐11,044 ‐8.1%
All Terminals 16,641 14.8%

Tariffs
We modelled the planned land acquisition, construction and operations by terminal using the
costs estimates determined during the study. The main activity of the terminal is to act as a
gateway for interstate buses to Lagos where passengers will link to and from the state buses

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network covering the city. Buses will be required to pay fees to the terminal operator for access
to the terminal and facilities.

The base tariffs in Naira used for vehicle access to the terminal are presented in Table ES ‐ 8.
These tariffs would be charged to each vehicle entering the terminals.
Table ES ‐ 8: Vehicle Terminal Charges per Entry (US$)

Vehicle Type Terminal Access Charge Terminal Access Charge

(2.0% of Passenger Trip (1.0% of Passenger Trip
Costs) – Base Case Costs) – Sensitivity Case
Interstate Minibus 1,500 750
Interstate Luxury Bus 6,000 3,000
Marco Polo High Capacity 4,363 2,181
Bus
Marco Polo High Capacity 3,444 1,722
Bus

It must be stressed that regulation and strict enforcement will be required in order to ensure
patronage (and related access revenues) at each of the terminals. Without this, the economics
of the project would suffer, making it very difficult to attract private sector participation in
the project. Thus, our financial analysis assumes that regulations and enforcement will be put
in place so that passenger vehicles are directed to the terminals. Noting the difficulty in
regulating the flow of cars that carry passengers into the proposed terminals, we have not
included terminal access charges from cars in our analysis2.

Other revenue streams that were modelled include:

1. Lease of areas for transit ticket sales;

2. Lease of facilities for stabling, cleaning and maintaining Lagos State buses and;

3. Revenues from overnight parking.

Operating Ratio

To inform the level of financial participation from both the public and the private sectors to
make the mega terminals project viable, an important first step is to analyze the operating ratio
of each terminal. The operating ratio is defined as a company’s operating expenses as a
percentage of revenue. It determines how much of terminal revenues cover operating costs
(staff, cleaning and security, terminal maintenance, etc.). The lower the operating ratio (usually
expressed as a percentage), the better the financial performance.

2
In our view, though cars that carry passengers should technically be subject to the same regulations as minibuses,
luxury buses, etc. Practically, our view is that it would be difficult to law enforcement to different car operators
carrying passengers from personal vehicle usage. Additionally, we expect the mega terminals to bring some degree
of scale in bus operations and assume that over time, smaller capacity vehicles will be replaced with higher capacity
vehicles. This is reflected in our traffic forecasts.

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Figure ES ‐ 3: Operating Ratio Summary Per Mega Terminal

Epe, 15.88%

Sango, 9.48% Agbara, 9.85%

Operating Ratio

Epe, 7.17%

Odogunyan, 7.65%

Sango, 3.58%
Berger, 6.39% Agbara, 4.31%

Odogunyan, 4.00%

Berger, 2.39%

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037

Unlevered Financial Analysis

With the understanding that operations can be sustained by terminal revenues, the unlevered
financial analysis seeks to understand the level of upfront financial participation between the
public and private sectors for each of the proposed bus terminals.

Table ES ‐ 9: Unlevered Valuation Summary per Terminal

Net Present Value Net Present Value

Terminal
with (USD 000) with (Naira 000)

Agbara 2,846 1,024,560

Berger 14,750 5,310,000

Epe ‐777 ‐279,720

Odogunyan 4,607 1,658,520

Sango 4,755 1,711,800

Source: CPCS Analysis

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Except for the proposed mega terminal at Epe, all other terminals generate sufficient terminal
access and leasing revenues to cover capital (including land acquisition) and operating costs.

Introduction of PSP

Based on the results of the unlevered analysis, we recommend that the private sector be
engaged in a Design‐Build‐Operate‐Maintain‐Transfer (DBOMT) PPP scheme towards
developing 4 of the proposed mega terminals – Agbara, Berger, Odogunyan and Sango.
Furthermore, based on the results in the preceding section, we are also of the view that the
private sector can take up revenue risk.

On the issue of land acquisition, we are of the view that for all 4 mega terminals, land should be
financed and provided by Government. Not only would this confirm the seriousness of
Government’s desire to develop these proposed mega terminals, but would also alleviate
pressures on the local capital markets’ ability to privately finance a fairly significant Naira‐based
acquisition (estimated at over N9.3 billion).

Next Steps

Following on from our recommendation that the LASG take forward the development of the
terminals on a PSP basis (accept for the proposed terminal at EPE which should be developed
at this stage given the economics of the project), the following are next steps that need to be
pursued.

1. As an immediate priority, Government should start consulting with private bus

operators and their unions, explaining to them the mega bus terminals initiative, and
how this will be of benefit to them.

2. The initiative should be well publicized, through newspaper, radio and television
advertisements. The main purpose of this will be to convey to the domestic and
international investor community the seriousness of Government in developing the
terminals with PSP.

3. Commence detailed and targeted market sounding once (1) and (2) are sufficiently
underway to confirm interest in a DBOMT model. Targeted market sounding should be
formalized and structured towards gaining valuable and focused feedback from the
private sector. Government should be prepared to present information in the following
areas during the event:

a. General guidelines of the access charge regime;

b. The strong desire to marry terminal development with commercial
development;
c. Government will provide the land (as necessary).

At the market sounding event(s), Government should seek information in the following
areas:

a. Ranking of terminals in terms of commercial attractiveness;

b. Anticipated terminal configurations;

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c. How the private sector would exploit the anticipated commercial potential at
each terminal; and
d. Any other viability or bankability issues.

4. Secure public funding for land acquisition (as necessary).

5. For those terminals where there is strong interest, prepare tender documents towards
a DBOMT type of PPP with revenue risk transferred to the private sector.

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Introduction
Key Messages
With average travel speeds during peak morning and peak evening being less than 19 miles per hour
in most parts of LMA, this project assesses initiatives to reduce road congestion through the pursuit of
integrated transport projects. The focus of this workstream is to create connectivity hubs (Mega
Terminals) at gateway locations where most interstate bus traffic enters LMA. The purpose of the Mega
Terminals is to permit the transfer of passenger between interstate buses to Lagos State (or city) buses,
and restrict movement of interstate buses within LMA.
The tasks and major activities followed for the execution of the assignment and preparation of the
Draft Assessment Report are enumerated in this chapter.
This includes field missions, conduct of primary surveys, review of secondary data, extensive
stakeholder consultations and field reconnaissance, and finally market sounding to provide feedback
on project structure.
As part of the assignment, we adopted an approach of submitting Working Papers (WPs) on key tasks
of the assignment with objective to continuously seek feedback on our analysis and outputs, address
comments and receive suggestions which have been fed into this Assessment Report.

The Project Context

1.1.1 Background
Over the years, Lagos, the commercial capital of Nigeria, has witnessed a rapid increase in
population amid tremendous urbanization and expansion. The transport system has not grown
adequately to meet this demand. The city is congested with transport services dominated by
informal service providers and privately owned cars. Over a century of growth in Lagos State
has resulted in an urban sprawl along the main north to south transport corridor, and more
recently along the western corridor.
Figure 1‐1: Time Series of Urban Growth in Lagos (1900 ‐ 2000)

Source: Ministry of Physical Planning/Environment (1900, 1963) LAMATA (2000). Data from the Global Human Footprint Dataset’s Human Influence Index – HII
(2005).

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This sprawl has resulted in growing traffic congestion in Lagos with peak morning and peak
evening speeds at 0 – 19 miles in most sections3. The congestion along the primary north to
south transport corridor is so acute that, on the Lagos to Jibiya (the border town in Northern
Nigeria) trade route, the short segment from the Apapa or Tin Can Island Port to a warehouses
outside the port footprint in Lagos (2% of the total distance) costs shippers $434, representing
22% of the total land transport price4. Extra costs5 related to transport from the Ports to Lagos
warehouses represent 94% of the total cost, driven mostly by congestion and poor road
conditions.

1.1.2 Mega Terminals Project

The Mega Terminals project is an important element of LAMATA’s overall vision to address the
road congestion in Lagos Metropolitan Area (LMA), driven by the Strategic Transport Master
Plan (STMP). The objective is to create connectivity hubs (Mega Terminals) at gateway locations
where most interstate bus traffic enters LMA. The inter‐state buses would terminate (for
incoming traffic)/originate (for outgoing traffic) at the Mega Terminals and passengers would
transfer to/from Lagos State buses, other public transport modes or private vehicles as the case
may be.

Currently inter‐state buses coming into and Figure 1‐2: Oshodi Bus Park
departing from Lagos city use a network of
parking sites and garages, most of which are
privately owned, to drop off and pick up
passengers. These sites are located all over
the city, contributing to traffic congestion
and gridlock, as well as being a safety hazard.
Some of these buses park illegally on the side
of the road, adding to the problem. As per
LAMATA’s internal estimate, there are over
80 interstate operators within Lagos, with
buses coming in from most other states of
Nigeria including the federal capital Abuja.

The purpose of the Mega Terminals is to permit the transfer of passengers between interstate
buses to Lagos State (or city) buses, and restrict movement of interstate buses within LMA and
thus congestion. Lagos State buses will be high capacity, regularly scheduled buses, operated
under licence and regulated by LAMATA. We expect that interstate buses will continue to be
less organized with services provided on an informal basis with a mix of vehicles providing
services (at least in the early years). Terminals will require capacity to permit the parking of both
city buses and interstate buses for short periods to enable passengers to embark/disembark. In

3
Frederic Oladeinde. Presentation on the Lagos Strategic Transport Master Plan. Lagos Metropolitan Area Transport Authority (LAMATA).
2017
4
As per the Nigeria Expanded Trade and Transport Program (NEXTT) Lagos‐Kano‐Jibiya (Lakaji) Corridor
Performance: Baseline Assessment Report On The Time And Cost To Transport Goods, 2015
5
Ibid. Extra costs include all informal charges and all indirect financial costs of delay, and any other observed
costs deemed unnecessary, unjustified, or too expensive, in comparison to international benchmarks; quantified
over and above transport costs

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addition, terminals will be used for stabling Lagos State buses overnight and for undertaking
light maintenance and cleaning of the buses.

Authority of the Assignment

As part of the Lagos State Government (LASG) commitment to the continued improvement of
transport connectivity in the Lagos metropolitan area, it has identified three transport sector
initiatives with potential for private sector participation (PSP): the Interstate Bus Terminals
Project (Mega Terminals Project), the Lagos State Water Transport Program (LSWTP), and the
Truck Parking and Port Access Facility (TPPAF) using information and communication
technologies. The TPPAF is being implemented by the Nigerian Ports Authority, an agency of
the Federal Government, but in close collaboration with Lagos State.

The World Bank, alongside the Management Unit of GIF (MU) and PPIAF (the three are
collectively termed as the ‘Client’), have engaged with the Lagos Metropolitan Area Transport
Authority (LAMATA), the Lagos State Waterways Authority (LASWA), and the Nigerian Ports
Authority (NPA) to assess the options available for attracting private sector investment and
participation into the three transport initiatives.

The objectives of the assignment are to:

 identify the legal, regulatory and institutional opportunities and bottlenecks and
formulate recommendations to solve these within the framework of each of the three
projects;

 assess feasibility of the three projects; and

 build consensus regarding the options presented and identify necessary next steps.

This Draft Assessment Report has been prepared under the authority of the contract signed
between the World Bank Group (WB) and CPCS Transcom Limited (CPCS) on December 21, 2017,
for the Project, “Private Sector Participation in an Integrated Transport System in Lagos”
(Selection No. 1248779).

Scope of this Report

This Report consolidates all of our analysis, findings and recommendations, addressing the
entire scope and the work undertaken for the Mega Terminals project. The major tasks as
defined in the Terms of Reference (ToR) include:

Workstream A: Cross‐cutting institutional, legal and regulatory framework diagnostic

 Task A1: Review of cross‐cutting institutional, legal and regulatory framework (PPIAF).
Workstream B: Lagos Gateway Bus Terminals

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 Task B1: Review existing long‐distance bus stations/intermodal facilities [PPIAF]. Review
LAMATA data/reports to identify existing key facilities where long‐distance (inter‐urban)
services currently interact with city services.
 Task B2: Assessment/estimation of existing and future passenger demand for intermodal
facilities (GIF). Review of any existing passenger demand data on long‐distance bus travel
held by LAMATA (including historical/time‐series data).
 Task B3. Produce conceptual engineering designs considering the traffic flow around and
into the bus terminal for the alternative project options and associated capital cost
estimates. The total capital expenditure (CAPEX) must be broken down into major cost
items with supporting details on quantities of materials and technical specifications.
 Task B4: Capital Investment Plan (GIF) – based on Tasks 1 ‐ 3, Consultant will assess the
likely capital investment required to develop the mega terminals. This will essentially be
an outline specification and costing of the different terminals.
 Task B5: High‐Level Project Structuring Options Appraisal (GIF) – based on Task 1‐3, the
Consultant will assess potential project structuring options to deliver the proposed
facilities.
 Task B6: Financial and commercial analysis of Preferred Structuring Option (GIF) –
financial modeling of preferred option to assess likely private sector investment in
project.

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Task Organization

1.4.1 Task Organization

Figure 1‐3 enumerates the task organization followed for the execution for the assignment.
Figure 1‐3: Task Organization

Major activities

1.5.1 Inception Mission

We undertook a joint field mission with the World Bank team to Lagos, Nigeria, over the course
of five days from January 15 ‐ 19, 2018, followed by meetings in Abuja, Nigeria, on January 22
and 23, 2018.

During the mission, we undertook:

 Discussions with the key Implementing Agencies (IAs) viz. LAMATA, LASWA and NPA;
 Site visits6 to potential project sites for the Mega Terminals7; and
 Consultations with other stakeholder including:

6
During the Inception Mission, the team visited three of the total five potential sites. The three sites visited
include Ojodu Berger, Lagos – Ibadan Expressway; Sango, Lagos ‐ Abeokuta Expressway; and Agbara, Lagos –
Badagry Expressway. The remaining sites were surveyed during the field visits held on April 17‐18, 2018.
7
In July 2018, the Lagos Ministry of Transport provided us with a list of 8 additional sites for potential mega
terminals. Given that these were received towards the very end of this assignment, they have not been
considered as part of the analysis.

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o Lagos Global8;
o Planet Projects9
o Association of Maritime Truck Owners (AMTO);
o Association of Corporate Fleet Owners (ACFO);
o Tarzan Marine Enterprise Ltd.;
o Seacoach Ferry Service; and
o Key ministries at the Federal level.
The findings of the Inception Mission were documented in our Inception Report submitted on
February 3, 2018. A revised Inception Report, after addressing comments received from the
World Bank team, was submitted on February 23, 2018.
Figure 1‐4: Timeline for major activities

1.5.2 Stakeholder consultation and second field mission

A consultative process was the cornerstone for the execution of the assignment. We conducted
a second field mission during the during the week of February 12‐16, 2018, with the purpose of

8
Office of Overseas Affairs and Investment, known as Lagos Global, Lagos Global is a creation of the present
administration to make Lagos an investment destination of choice, by creating a favourable environment for local
and Foreign Direct Investment (FDI) to thrive.
9
Planet Project is one of the prominent Nigerian companies operating in construction, operation and consulting
for transportation infrastructure in the country. The intra‐city Ikeja Bus Terminal facility was constructed by
Planet Project under World Bank financing. The CPCS team consulted with Planet Projects to gauge their interest
as a potential private sector partner and also to seek their views on the sector as a whole. They shared data with
the CPCS team as a matter of courtesy, and have been given due credit in the report.

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holding further consultations with stakeholders, addressing information gaps and collecting
further data.

A complete list of stakeholders consulted as part of this study is presented in Appendix A.

1.5.3 Document/ data review

The three agencies and other stakeholders have been generous with sharing of information and
past studies/data, which has aided our analysis. Key among these with respect to the Mega
Terminals project reviewed by the team were:

 Consultancy Services for the Extension of the Strategic Transport Master Plan (STMP)
and Strategic Travel Demand Model (STDM) to Cover the Mega City Region, ALG and
euro praxis, December 2014;
 Development of Bus Route Network for Lagos State ‐ Final Report, integrated transport
planning, Ibis Transport Consultants & AEC, April, 2015;
 Value of Time and Transport Elasticity Study for the Mega City Region ‐ Final Report,
Leigh Fischer, May 2015;
 An in‐house survey conducted by LAMATA which identified over 20 major locations with
over 80 operators across Lagos with high concentration of inter‐state bus operators; and
 Survey conducted by Planet Projects – a survey of inter‐state buses as part of a previous
Mega Terminals study undertaken in December 201710. The data identified 145 bus or
motor parks across Lagos which are being used by inter‐state operators. These bus parks
were classified into 39 areas of the city.
A comprehensive list of secondary data/documents reviewed for this project is presented in
Appendix B.

1.5.4 Survey
Although there was overall data to provide context to the problem of traffic congestion in the
Lagos Metropolitan Area (LMA), there was no official baseline specifically of inter‐state buses
including, their numbers, routes and capacity of such buses. As part of this project, we
undertook a survey of inter‐state bus services/operators at around 40 locations11 in Lagos.
These locations are currently being used as bus parks for inter‐state services. The objective of
the survey was be to obtain the following information required for the traffic modelling as well
as designing the terminal layouts:

 Number of inter‐state buses and passengers;

10
The CPCS team consulted with Planet Projects to gauge their interest as a potential private sector partner and
also to seek their views on the sector as a whole. They shared data with the CPCS team as a matter of courtesy,
and have been given due credit in the report.
11
Even though the survey was conducted at 40 individual parks, clusters of parks in close proximity to one
another with the boundaries often being seamless have been treated as 1 park. Therefore, this data has been
grouped under 25 locations.

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 Origin‐ destination of these services;

 Types and capacity of buses; and
 Charges paid at existing bus parks.
The survey which involved observations and questions to the bus operators, was undertaken on
weekdays in March 2018.12 The questionnaire template used for the purpose of the survey is
presented in Appendix C.

1.5.5 Submission of Interim Deliverables

Working Papers
As part of the assignment, we adopted an approach of submitting Working Papers (WPs) on key
tasks of the assignment with objective to continuously seek feedback on our analysis and
outputs, address comments and receive suggestions which have been fed into this Assessment
Report. We submitted the following working papers:
Table 1‐1: List of WPs submitted

S.No. Working Paper Submission date Date of receipt of Revision date

Comments
1 WP1: Legal and Institutional March 14, 2018 April 5, 2018 April 17, 2018
Review
2 WP2: Diagnostic Review March 13, 2018 April 5, 2018 April 13, 2018
3 WP3: Traffic Modelling and April 24, 2018 May 23, 2018 June 6, 2018
Forecasts
4 WP4: Facility Configuration and May 16, 2018 June 11, 2018 Responses
Service Design submitted on June
15, 2018

Engagement with Implementing Agencies

A presentation on WPs 1 and 2 was held via videoconferencing on April 5, 2018, with a view to
seek feedback from the respective IAs.

Progress Reports
These were submitted every two weeks, after the submission of the Inception Report, for the
information of the World Bank team, with an update on the activities conducted and progress
of the assignment. The reports also flagged delays and challenges encountered during the
execution of the assignment.

1.5.6 Reconnaisance Visits for site verification and ESA review

Our team of Engineers and the Environment and Social Expert conducted site reconnaissance
of the proposed sites (5) during the month of April, 2018, with the objective of preparing

12
After commencement on February 27, 2018, our teams faced resistance at several of the bus parks which they
visited, with bus park operators and fleet owners refusing to cooperate with the surveyors in the absence of an
introduction letter from National Union of Road Transport Workers (NURTW) addressed to bus park operators
and fleet owners. The survey was temporarily suspended. It resumed after intervention from LAMATA and
discussions with NURTW, the survey was completed on March 13, 2018.

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designs and layout for the propose sites, and flagging any issues with respect to environment
and social assessment.

1.5.7 Market Sounding Exercise

We commenced the market sounding exercise in the week of June 4, 2018, soliciting
feedback from a variety of stakeholders including:

 industry associations;
 boat operators (present, past and potential),
 terminal operators; and
 banks and FIs.
The feedback received is presented in Section 7‐7 of this report.

Structure of this Report

The remainder of this report is structured as follows:

 Chapter 2: Diagnostic Review – this presents the findings from our as‐is review of existing
transport facilities as they pertain specifically to inter‐state bus services;

 Chapter 3: Traffic Analysis – the chapter presents long term traffic forecasts which have
been used to determine the size and specifications of each of the facilities to be built or
transport services to be provided;

 Chapter 4: Facility Configuration and Service Design – this presents an implementation

blueprint for the Mega Terminals including configurations for the various infrastructure
facilities, based on the traffic forecasts and potential for optimization of revenue for the
project;

 Chapter 5: Conceptual Design and Layouts – this summarises assumptions for design and
layout development for each of the Mega Terminals;

 Chapter 6: Commercial, Financial and PPP Analysis – presents findings from our
economic analysis, commercial analysis and financial modelling of various project/PPP
structures;

 Chapter 7: Recommendation on Way Forward – summarises our key recommendations

and documents immediate next steps.

Limitations
This report is intended to inform the way forward on the assignments. It is not a detailed
feasibility study for the projects, but identifies (at a high level) potential options which may be
pursued. If they are approved to be procured using PSP, it is assumed that a consultant would
be hired for Transaction Advisory who would validate the feasibility of the projects in detail.

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Diagnostic Review
Key Messages
Existing Bus Parks catering to inter‐state buses
Inter‐state buses coming into and departing from Lagos city use a network of parking sites and garages
most of which are privately owned to drop off and pick up passengers. These sites are located all over
the city, contributing to traffic congestion and gridlock, as well as being a safety hazard. Some of these
buses park illegally on the side of the road, adding to the problem.
There exists no official baseline for inter‐state buses. An internal survey conducted by LAMATA
identified over 80 interstate operators currently utilizing privately owned bus parks across 20 locations
within Lagos. Another survey conducted by a private company Planet Projects (2017) identified over
145 private bus parks clustered across 39 locations, and the number of operators to be over 150. In
most cases, there are no definite boundaries or fencing at these bus parks.
Trip and Passenger Volume
There are over 5,600 bus trips per day to and from these parks, with close to 65,000 passengers using
these services daily. The number of bus trips varies significantly by area. While Oshodi and Ojota
account for over 700 bus trips per day, others like Ishaga, PPL and Alaba account for less than 10 trips
a day. Similarly daily passenger numbers also show great variation with Oshodi, Ojota, and Ikorodu
having over 5,000 inter‐state bus trips and some areas having less than 100 trips. The data indicate
that for most areas there is a strong correlation between the number of bus trips to and from the
motor parks and the number of passengers arriving and departing.
In terms of origin and destinations of the interstate bus passengers, the highest number travel to and
from the neighbouring states of Ogun and Oyo, with over 13,000 passengers per day each. These two
states account for 45% of the total passenger demand. Other popular destinations are FCT and Edo
state, but they only average around 4,000 passengers daily.
There seems to be a reasonable correlation between the number of bus trips and revenue generated
in individual areas. The area where the motor parks generate the highest revenue is Mile 2, with a daily
revenue of over N21 million, as they serve international destinations like Benin and Ghana.
Competitive and Complimentary projects
Rail Transport
Current inter‐city rail service operations by NRC are characterized by frequent service disruptions and
long delays which are largely a result of poor operational capabilities of the NRC and lack of adequate
rolling stock and resources. Notwithstanding its relatively low fares, the current inter‐city rail service
operated by the NRC does not present a significant threat to the competitiveness of the bus transport.
However two key factors could significantly affect the competitiveness of inter‐city rail services in
Nigeria. The first being the concession of the Narrow Gauge Lines of the NRC. Secondly, The FGN is
proposing to construct a new standard gauge line from Lagos to Kano with a sovereign loan from the
Chinese government. The commencement of the gauge line concession programme and completion of
the standard gauge line would significantly increase the competitiveness of inter‐city rail transport and
potentially drive a modal shift from current road transportation as long distance passengers in Nigeria
are often price sensitive and would easily switch to cheaper and potentially more reliable mode of
transportation.

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Key Messages (contd.)

Air Transport
The demand for local air transport is considered low compared to inter‐state bus transport in Nigeria
based on the significant high fares in comparison to inter‐city bus transport. For instance, recent data
from the National Bureau of Statistics show that that the average price for domestic flights from Lagos
is NGN 40,500.0 compared to NGN 2,535 for an average bus fare for inter‐city trip from Lagos. Thus,
the domestic air transport sector does not present a competitive threat to inter‐city bus transport and
by extension the viability of the proposed mega‐terminals.
Other STMP projects
The STMP envisions a network of bus, rail and water based rapid transport systems serving strategic
activity centers across the state. A review of the proposed locations for the inter‐state mega terminals
show that the Agbara, Ojodu Berger and Sango locations are within existing public transport network
while the Odoguyan and Epe locations are within the planned bus network.
Key Issues
 Inter‐state bus network is Informal and unorganized with existing bus parks serving this demand
being in private hands, enforcement and incentives to use Mega Terminals will be key.
 Last mile connectivity to ensure a positive transit experience for passenger will be fundamental;
 Bus reform agenda envisages a transformation approach to Intra‐city bus operations; integration
with Mega Terminals will be key;
 Identification of heavy traffic corridors and estimates of inter‐state bus trips are pre‐requisites to
identify the best locations and terminal capacity for the Mega Terminals
Stakeholder Concerns
Some of the bus parks/garages are owned/operated by larger owners of bus fleets and used to park
their own buses with some of the spare capacity being rented out to smaller bus operators. With the
advent of Mega Terminals, the movement of the inter‐state buses will be restricted to the outskirts of
LMA which may have the following impact on the bus owners and bus park operators:
 All Bus Operators ‐ Bus revenue may decrease as the passenger trip will now terminate earlier
(and therefore serve a shorter distance) for the passenger and therefore the fares may also
decrease (after mega‐terminal, the passengers will be expected to transfer to the intra‐city buses
or other rail/water based transport or private taxis)
 Bus park owners who are also bus fleet owners –will now have land or a facility which they will
no longer be able to use for the purpose it was intended for and will now have to find an
alternative use for that land. Moreover, they may need to pay the Mega Terminal operator some
form of user fees for access for parking of their buses.
 Bus park owners who rent space to other smaller or solo bus owners ‐ they would now have to
forgo the parking fees which they charge for buses to park on their land. They will have to find an
alternative use.
 Small bus operators who currently rent space at private bus parks – they will likely have access to
better facilities but will also likely face a decrease in revenue for reasons stated in point a.
 Passengers – The passengers would now have to transfer to another public or private mode of
transport for commuting from the Mega Terminal to (from) their eventual destination (origin)
within Lagos, which would apply higher cost and journey time.
To this extent, we can expect resistance to the project from various quarters Including passengers, bus
operators and bus park owners. There need to be a large scale awareness creation and sensitization
programme to build consensus among stakeholders.

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Overview
This section reviews the existing interstate bus parking facilities, most of which are informally
organised by private bus operators. It outlines the existing facilities and the services provided,
estimates of number of buses and passengers using these facilities, and the operational and
commercial revenue accruing to LAMATA and the operators.

Data for the existing inter‐state bus parking facilities was received from the following sources:

 Planet Projects13; and

 In‐house survey carried out by LAMATA.

Review of Existing Facilities and Market Structure

Inter‐state buses coming into and departing from Lagos city use a network of parking sites and
garages most of which are privately owned to drop off and pick up passengers. These sites are
located all over the city, contributing to traffic congestion and gridlock, as well as being a safety
hazard. Some of these buses park illegally on the side of the road, adding to the problem. There
are over 80 interstate operators within Lagos, with buses coming in from most other states of
Nigeria including the federal capital Abuja. Prominent amongst the states are Ogun, Oyo, Ondo,
and Ekiti.

2.2.1 Bus motor parks and services

As per data received from Planet Projects, there are 39 areas in Lagos from where inter‐state
buses arrive and depart. Each of these areas has numerous bus motor parks, most of which are
owned and served by individual operators. There are also some publicly owned areas which are
used as motor parks. A total of 145 bus parks have been identified in these areas, though there
could be more parks which have not been identified.

Table 2‐1 outlines all the areas and the number of motor parks in each.
Table 2‐1: Number of Motor Parks per Area
No. Area in Lagos City No. of Motor Parks
1 Oshodi 13
2 Ojota 6
3 Mile 2 8
4 Ketu 1
5 Badagry 1
6 Ikorodu 12
7 Iyana Ipaja 6
8 Jibowu 8
9 7Up 1

13
Planet Project is one of the prominent Nigerian companies operating in construction, operation and consulting
for transportation infrastructure in the country. The intra‐city Ikeja Bus Terminal facility was constructed by
Planet Project under World Bank financing.
The CPCS team consulted with Planet Projects to gauge their interest as a potential private sector partner and
also to seek their views on the sector as a whole. They shared data with the CPCS team as a matter of courtesy,
and have been given due credit in the report.

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No. Area in Lagos City No. of Motor Parks

10 Ajah 12
11 Ebute Ero 1
12 Yaba 3
13 Ajegunle 7
14 Cele/Okota Road 13
15 Berger 1
16 Ijora 3
17 Oyingbo 4
18 Ikotun 8
19 Coker 1
20 Ojuelegba 6
21 Maza‐Maza 3
22 Palmgrove 1
23 Volks 3
24 Epe 1
25 Agege 1
26 Pen Cinema 1
27 Iyana Iba 1
28 Abule Egba 1
29 Obalende 1
30 Amuwo Kuje 3
31 Adeniji Adele 1
32 Idumota 1
33 Iyana Ejigbo 4
34 Iyana School 4
35 Mowo 1
36 Ishaga 1
37 Oluwole 1
38 PPL 1
39 Alaba 1
TOTAL 145
Source: Planet Projects

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The number of motor parks14 vary by area, with some areas including Oshodi, Ikorodu, Ajah,
and Cele/Okoto Road having 13‐14 motor parks each. A majority of areas though have only 1‐3
motor parks. Several of the motor parks which are currently operated by private sector have no
defined boundaries and in most cases multiple entry/exits, with buses often spilling over to the
roads. They usually exist in clusters and the areas referred to have a high concentration of motor
parks.

Figure 2‐1 Oshodi Bus Park

It is uncertain whether this is the definitive list of all motor parks, but we believe that this list is
adequate enough for us to scope out the mega terminals.

The LAMATA survey data identified over 20 major locations with over 80 operators across Lagos
with high concentration of interstate operators. Details of the types of vehicles15 each location
and the number of operators at is given in Table 2‐2.
Table 2‐2: Details of Vehicles at Locations and Operators
No. Location Minibuses Cars Luxury Buses No. of
Operators
1 Abule Egba 40 10 0 1
2 Agege 50 15 0 1
3 Fadeyi/Jibowu 345 97 37 21
4 Iju Ishaga 30 10 0 1
5 Ikotun 65 10 0 3
6 Iyana Iba 60 0 31 4
7 Iyana Ipaja 242 0 0 6
8 Ketu 340 110 0 1
9 Mazamaza 242 0 0 3
10 Mile 12 9 5 14 2
11 Mile 2 80 0 0 2

14
The terms bus park/motor park/garage are used interchangeably and refer to any piece of land or area used to
park buses (inter and/or intra city buses) before/after completion of the trip. This has been clarified as a
footnote. This is different from a Bus stop which refers to an earmarked station where passenger board/de‐board
the bus.
15
The capacity of the vehicles deployed in and around Lagos ranges from 7 to 60 seater’s buses (with variations
of 15, 25, 30, 42 and 56 seats). In this case, mini‐bus refers to a bus with a capacity of 15 seats and a luxury bus
having 60 seats.

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No. Location Minibuses Cars Luxury Buses No. of

Operators
12 Ojota New 377 11 0 3
Garage
13 Ojota 668 136 0 6
14 Ojuelegba 105 8 0 8
15 Oshodi 396 46 72 6
16 Oyingbo 70 5 47 6
17 Toll gate 60 0 0 2
18 Yaba 1,552 1 24 4
19 Ajah
20 Ikorodu
21 Berger 250 0 0 1
TOTAL 4,986 464 215 81
Source: LAMATA

Some of the bus parks/garages are owned/operated by larger owners of bus fleets and used to
park their own buses with some of the spare capacity being rented out to smaller bus operators.
With the advent of Mega Terminals, the movement of the inter‐state buses will be restricted to
the outskirts of LMA which may have the following impact on the bus owners and bus park
operators:

a. All Bus Operators ‐ Bus revenue may decrease as the passenger trip will now terminate
earlier (and therefore serve a shorter distance) and therefore the fares charged may also
decrease (from the mega‐terminal, the passengers will be expected to transfer to the
intra‐city buses or other rail/water based transport or private taxis where the relevant
connections exist)
b. Bus park owners who are also bus fleet owners –will now have land or a facility which
they will no longer be able to use for the purpose it was intended for and will now have
to find an alternative use for that land Moreover, they may need to pay the Mega
Terminal operator some form of user fees for access for parking of their buses.
c. Bus park owners who rent space to other smaller or solo bus owners ‐ they would now
have to forgo the parking fees which they charge for buses to park on their land. They
will have to find an alternative use.
d. Small bus operators who currently rent space at private bus parks – they will likely have
access to better facilities but will also likely face a decrease in revenue for reasons stated
in point a.
e. Passengers – The passengers would now have to transfer to another public or private
mode of transport for commuting from the Mega Terminal to (from) their eventual
destination (origin) within Lagos, which would apply higher cost and journey time.
To this extent, we can expect resistance to the project from various quarters Including
passengers, bus operators and bus park owners.

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Market Structure

2.3.1 Number of Operators

While an exhaustive estimate of the exact number of interstate bus operators in Lagos is not
available, the current number of operators is estimated to be around 80, as per the survey
conducted by LAMATA. The data shared by Planet Projects however estimates that there are
around 150 such operators. What seems apparent is that there appears to be a diverse market
with a few large operators with large fleets of buses and several small operators having
anywhere between 1‐50 buses.

2.3.2 Trip and Passenger Volumes for Inter‐state Bus Operations

The data from Planet Projects also outlined the ‘Average Daily Trip Volumes’ and the ‘Average
Daily Passenger Volume’ per Motor Park. It has been assumed that these refer to the number
of bus trips and passengers arriving/departing respectively. This data for each of the areas has
been consolidated and presented in Figure 2‐2.
Figure 2‐2: Average Daily Bus Trips and Passenger Volumes per Area

Source: Planet Projects

The number of bus trips varies significantly by area. While Oshodi and Ojota account for over
700 bus trips per day, others like Ishaga, PPL and Alaba account for less than 10 trip a day.
Similarly daily passenger numbers also show great variation with Oshodi, Ojota, and Ikorodu
having over 5,000 inter‐state bus trips and some areas having less than 100 trips.

The data indicate that for most areas there is a strong correlation between the number of bus
trips to and from the motor parks and the number of passengers arriving and departing. Those
areas that have a high number of bus trips also see high numbers of bus passengers. However,

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there are a few exceptions like Ojota, Mile 2, Badagry and Ikorodu, which have a high number
of bus trips but relatively lower passenger numbers. This would indicate that buses to these
areas are not operating at full capacity, or that there are far too many operators serving these
areas. The more buses that serve an area only increases local traffic congestion, further
justifying the need to build the mega terminals.

In terms of origin and destinations of the interstate bus passengers, the highest number travel
to and from the neighbouring states of Ogun and Oyo, with over 13,000 passengers per day
each. These two states account for 45% of the total passenger demand. Other popular
destinations are FCT and Edo state, but they only average around 4,000 passengers daily. Details
of the daily passenger flow to all states is shown in Figure 2‐3.

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Figure 2‐3: Daily Bus Passenger Flows to and from Lagos

Source: Planet Projects data

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System in Lagos

2.3.3 Operational and commercial revenue

The Planet Project data did provide estimates of ‘Average Daily Revenue’ by motor park. These
have been consolidated by area and are given in Figure 2‐4.
Figure 2‐4: Average Daily Revenue by Area

Source: Planet Projects

There seems to be a reasonable correlation between the number of bus trips and revenue
generated in individual areas. The area where the motor parks generate the highest revenue is
Mile 2, with a daily revenue of over N21 million. This is primarily due to the fact that motor
parks in this area serve international destinations like Benin and Ghana, where bus fares are
higher. Other areas with high daily revenue include Oshodi, Ojota, Jibowu and Aja.

No data is available on the payments made by bus operators to LAMATA or the bus terminal
operators16. Data on these payments was obtained as part of our data collection exercise.

Though opportunities exist for the commercial exploitation of the motor parks, including
informal trading, commercial leasing, on‐street and off‐street parking within and in the vicinity
of the facility, advertising, concessions, etc., no data on this is currently available. Data on other
commercial revenue sources was obtained as part of our data collection exercise.

16
Some large bus operators (i.e. owners of large fleets) also happen to own/operate bus terminals. At the same
time, there are bus terminal operators who happen to have access to pieces of land (e.g. Defunct or out of use
facilities) on which they allow buses to park for a fees.

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System in Lagos

2.3.4 Scenario envisaged under Bus Reform program17

Following comments from the World Bank, the Consultant requested additional information on
the bus reform initiative, but this has not been received. The team carried out some desk
research to complement our understanding of the proposals of the bus reform program. The
Bus Reform Initiative (BRI) was introduced by the Lagos State Government in 2017 as a strategy
to formalize the transport sector. Fundamentally, the program aims to:

 Renew the public road based moveable infrastructure

 Formalize operations in the sector by brining informal workers into the formal economy

 Introduce modern intelligent transport system into Lagos State

The anchor for the bus reform program will be the development of 13 new bus terminals across
the LMA. These new terminals will replace existing commercial car parks that use ad hoc
locations, including side roads, undercarriage ways, etc. as drop‐off and pick‐up locations for
passengers. Lagos State has planned for all existing commercial buses to relocate to these new
terminals once construction is complete and services operational.

These terminals will feature intelligent transport systems that allow commuters to know of the
arrival and departure of buses. Complementing the 13 bus terminals will be a network of 300
modern bus stops across the metropolitan area. These bus stops will provide the vital last mile
service connecting the 13 anchor terminals.

It is the Consultant’s understanding that the new bus terminals will complement the Mega
Terminals. The Mega‐Terminals will mostly serve as inter‐change points for travelers coming
from outside Lagos State, whereas the 13 bus terminals will be serving intra‐state traffic.

It is our understanding that funding for the ambitious program has been challenging, and this
challenge could delay some of the project components.

Lagos State Government has appointed specialist consultants to develop and implement the
reform. The following are the key elements to the program:

 Replacing 75,000 existing Danfos (mini buses) with high capacity buses;
 Developing route and service plans based on demand and ensuring operators stick to
defined routes;
 Licensing operators for assigned routes. The plan is to have 5 major bus operators in
Lagos;
 Development of an automated fare collection system;
 Deployment of intelligent transport systems;
 Infrastructure provision including bus depots, park and ride, and bus stops;
 Fares will be collected by the Government and distributed amongst the operators. The
Government will take the revenue risk;

17
Information on bus reform programme based on the Lagos State Transport Bill

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System in Lagos

 Government is initially buying 820 buses (300 medium capacity and 520 high capacity),
the first 20 buses arrived in Lagos in June 2018;
 These buses are Marco Polo buses from Brazil, and will be maintained by the
manufacturer under a maintenance contract. The operators will lease the buses from the
Government, and after 5 years they will transfer to the operators; and
 In the long‐term they are looking at buying 5,000 new buses.
This program will be implemented by the newly created Lagos Bus Services Limited (LBSL), which
in collaboration with the government will regulate and enforce the program.

The implications of the bus reforms program on the mega terminals project can only be positive.
A demand driven bus timetable and schedule will ensure that these terminals are properly
served by public transport, ensuring connectivity and interchange for passengers using
interstate bus services.

Analysis of Competing and Complementary modes of PT

The mega terminals are expected to significantly improve the travel experience of inter‐state
travelers in Lagos. The terminals would provide better access to the city’s public transport
system as well as improved on‐site facilities. These improvements at the mega terminals would
likely further increase the share of passengers using inter‐state bus transport in Lagos.

This section of the report explores the other modes of inter‐state public transport available to
passenger and their relative competitiveness in comparison to an improved bus transport
system in the State.

2.4.1 Rail transport

The main rail network in Nigeria consisting of about 3,500km of narrow gauge lines is largely
dilapidated. The network is operated by the Federal Government vertically integrated railway
agency, Nigerian Railway Corporation (NRC). Current inter‐city rail service operations by NRC
are characterized by frequent service disruptions and long delays. The suboptimal rail transport
operations of the NRC are largely a result of poor operational capabilities of the NRC and lack
of adequate rolling stock and resources.

In Lagos, the NRC operates an intra‐city rail system and two main inter‐city routes. The 26km
intra‐city rail service from Iddo to Agbado with 10 station stops as listed in Table 2‐3:
Table 2‐3: List of NRC Rail Stations within Lagos

S/N NRC Rail Stations within Lagos Distance Cumulative distance

1 Iddo ‐ Ebute‐Metta 2km 2km
2 Ebute‐Metta ‐ Ebute‐Metta 1km 3km
Junction (EBJ
3 EBJ ‐ Yaba 2km 5km
4 Yaba ‐ Mushin 3km 8km
5 Mushin ‐ Oshodi 2km 10km
6 Oshodi ‐ Shogunle 3km 13km
7 Shogunle ‐ Ikeja 1km 14km

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System in Lagos

S/N NRC Rail Stations within Lagos Distance Cumulative distance

8 Ikeja ‐ AGEGE 4km 18km
9 Agege ‐ Iju Junction 5km 23km
10 Iju Junction ‐ Agbado 3km 26km
Source: Transport Statistics, 2016. Lagos Bureau of Statistics

As of 2016 (the latest year with available information) the intra‐city service runs about 16 times
per day during peak hours (from 0540 hours to 1020 hours and 1300 hours to 1940 hours) with
an average passenger volume of 16,000 per day. Although the trains are supposed to operate
per schedule, they are often delayed. Current passenger tariff is NGN 750 for premium service
(new coaches) and NGN 230 for standard coaches.

The NRC operates two inter‐city rail service from the Lagos main terminal in Iddo. These are
routes are highlighted in the Table 2‐4:
Table 2‐4: List of NRC Inter‐City Routes

S/N Track route Distance Trips per Week Average passengers per week
1 Lagos – Kano 1,125 km 2 2500
2 Lagos – Ilorin 338 km 2 4000
Source: Nigerian Railway Corporation Statistics

The tariff rates for the inter‐city rail service operated by NRC are regulated and subsidized by
the government. The NRC sets the prices but requires the approval of its supervising ministry,
the Federal Ministry of Transportation (FMOT) to amend the tariffs. Current rates were last
adjusted and approved in 2013 and are in the presented in Table 2‐5:
Table 2‐5: NRC Approved Passenger Fare Rates

Service Type Rate (NGN per passenger –km) Fare for Lagos to Kano
S.No. Trip (NGN)
1 Standard Class Service 2.55 2870
2 First Class Service 4.00 4500
3 First Class Sleeper (ordinary) Service 5.10 5750
4 First Class Sleeper (A/ C) Service 6.12 6890
Source: Nigerian Railway Corporation Statistics

Notwithstanding its relatively low fares, the current inter‐city rail service operated by the NRC
does not present a significant threat to the competitiveness of the bus transport (and hence the
viability of the proposed private sector‐operated mega terminals) within the country given the
NRC’s poor service, limited routes and frequent delays.

However two key factors could significantly affect the competitiveness of inter‐city rail service
in Nigeria:

Concession of the Narrow Gauge Lines of the NRC

Nigeria’s main rail network comprises of 3,505 route km of narrow gauge (1,067mm) track
which can be divided into two corridors. The Western Line from Lagos to Nguru in Yobe State,
measuring 1,805 km of narrow gauge track and 348 km of secondary track (including passing
loops and yard tracks) extends into one of the most important port complexes in Nigeria, the
Lagos Port Complex, and provides rail access to several bulk, break bulk and liquid bulk
terminals, as well as the Apapa Container Terminal. The line however, stops short of the other

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System in Lagos

major port terminal in Lagos, the Tin Can Island Port Complex. The Western Line is along a major
trade corridor connecting Lagos to major trade hubs including; Ibadan, Ilorin Kaduna, and Kano.

A parallel line in the eastern part of the country, the Eastern Line, runs from Port Harcourt to
Maiduguri. The Eastern Line is also linked to the major sea port at Port Harcourt, the Rivers Port
Complex. A 19km narrow gauge extension is proposed to connect Rivers Port to the second port
in Port Harcourt, the Onne Deep Sea Port, though this has yet to be built. The Eastern Line
measures 1,700km of narrow gauge track.

The Federal Government of Nigeria (FGN) is currently exploring options around concessioning
the narrow gauge network of the NRC to a private sector consortium led by General Electric
(GE)18. The government and the consortium are presently negotiating the terms and conditions
of the concession programme that is expected to include an investment of about USD4.6 billion
in the rail network over the 30‐year term of the concession.

Although the negotiations have been prolonged and the concession programme delayed, the
handover of the rail network to the GE‐led consortium and the expected investment in the
sector is expected to significantly increase the quality of inter‐city passenger rail service in the
country. The FGN has recently approved19 an interim phase for the concession program
whereby the GE‐led consortium will invest up to $45 million to rehabilitate the critical areas of
the track infrastructure, acquire some rolling stock and commence operations. It is uncertain
when an agreement for the interim phase period will be finalized to enable the concessionaire
commence operations.

Construction of the Lagos to Kano Standard Gauge line

The FGN is proposing to construct a new standard gauge line from Lagos to Kano with a
sovereign loan from the Chinese government. The construction works for the first phase (Lagos
to Ibadan) of the new rail has started and expected to be completed by January 201920. The
funding for the next phase (Ibadan to Kaduna) of the new line has also been recently approved
by the government. This new rail line is part of FGN’s rail modernization program and include
the construction of new standard gauge lines to connect every State capital in the country.

When completed, the new rail line will significantly increase effectiveness of rail service in the
country in comparison to inter‐city bus transit.

The commencement of the narrow gauge line concession programme and completion of the
standard gauge line would significantly increase the competitiveness of inter‐city rail transport
and potentially drive a modal shift from current road transportation as long distance passengers
in Nigeria are often price sensitive and would easily switch to cheaper and potentially more
reliable mode of transportation.

18
https://www.thisdaylive.com/index.php/2017/05/25/fg‐concessions‐rail‐lines‐to‐ge‐multinational‐to‐invest‐
over‐2‐2bn/ accessed February 25, 2018.
19
https://www.vanguardngr.com/2017/11/ge‐2‐7bn‐proposed‐rail‐concession‐senate‐cttee‐quizzes‐minister‐
transport/ accessed April 8, 2018
20
Source: http://www.tribuneonlineng.com/fg‐complete‐lagos‐ibadan‐standard‐gauge‐rail‐line‐jan‐2019‐
amaechi/ accessed February 26, 2018

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2.4.2 Air Transport

The local aviation industry in Nigeria is poorly developed in comparison to other similar sized
economies. The aviation industry is facing multiple challenges including: (i) high cost of
operations, including multiple taxation and levies; (ii) safety and security issues; (iii) inadequate
financing; and (iv) poor airport infrastructure. These issues have resulted in the Federal
Government’s recent acquisition of two leading domestic airlines in the country, Arik Air and
Aero Contractors, due to the airlines’ inability to repay loans from local banks.

The demand for local air transport is considered low compared to inter‐state bus transport in
Nigeria. As presented in the chart below, Lagos airport (MMA21) accounted for about 36% of all
passenger demand for air transport and about 34% of aircraft movements in 2016.
Figure 2‐5: Number of Domestic Air Transport Passengers and Aircraft Movements in 2016

4,000 70
Thousands

60
3,000
50

40
2,000
30

20
1,000
10

0 0

Total Number of Passengers Total Number of Aircraft Movements

Source: Air Transportation Data. Q2 2017. National Bureau of Statistics. September 2017. Other airports

The relatively low demand for air transportation is based on the significant high fares charged
in comparison to inter‐city bus transport. For instance, recent data from the National Bureau of
Statistics show that that the average price for domestic flights from Lagos is NGN 40,500.0
compared to NGN 2,535 for an average bus fare for inter‐city trip from Lagos22. Our desktop
research for some of the more popular origin and destinations from Lagos suggest fares
between NGN 4,000 – NGN 8,000 per trip. Thus, the domestic air transport sector does not
present a competitive threat to inter‐city bus transport and by extension the viability of the
proposed mega‐terminals.

2.4.3 Lagos Mega City Strategic Transport Master Plan

As stated earlier, the mega terminals project is an important element of Lagos State’s overall
vision to address the road congestion in Lagos Metropolitan Area. The State’s overall vision and
long‐term plans for public transport have been articulated clearly in the Strategic Transport
Master Plan (STMP). Currently, LAMATA is actively implementing the STMP, with various

21
All local terminals of the domestic airport
22
Transport Fare Watch. National Bureau of Statistics. January 2018.

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System in Lagos

schemes at differing states of development. The STMP envisions a network of bus, rail and water
based rapid transport systems serving strategic activity centers across the state. The STMP
recommends the development of the following new public transport corridors:

 14 new BRT routes in Lagos with staggered implementation through 2032;

 6 new LRT lines – of these 2 lines (Blue and Red Lines) are currently being developed;
 1 new Monorail line serve the well‐built urban centre of Victoria Island; and
 5 new Cable Car projects mainly on Lagos island.
The proposed mega terminals will fully integrate with these proposed new transport corridors,
and will form a key part of the STMP strategy. For example, the proposed mega terminal at
Odogunyan will provide an interchange with the LRT Orange Line, the mega terminal at Sango
will provide an interchange with the LRT Red Line, and Agbara with the Purple Line. There is also
potential for integration between the mega terminals and the proposed BRT routes.
Connectivity with the proposed public transport network will greatly enhance the use of the
mega terminals.

LAMATA has further conducted a detailed study and delineated the future bus network in the
State23. The bus network study identifies the main bus corridors as follows:

 Mass Transit Bus Routes –bus corridors with a demand greater than 6,000 pphpd
 Standard Bus Routes – bus corridors with a demand generally between 6,000 and
2,000 pphpd
 Feeder Bus Routes – bus corridors with a demand between 2,000 and 1,000 pphpd (or
500 pphpd for minibuses)
These bus corridors are served by a number of bus transit hubs and nodes including four
strategic bus interchanges “super‐hubs” locations which collectively accounts for 25% of the
public transport capacity in the state. These locations are: CMS, Ikeja, Mile 2, and Oshodi. The
LASG has commenced the re‐construction of intra‐city mega bus terminals at Ikeja and Oshodi.

A review of the proposed locations for the inter‐state mega terminals show that the Agbara,
Ojodu Berger and Sango locations are within the existing public transport network while the
Odoguyan and Epe locations are within the planned bus network.

The map of proposed STMP and the planned bus network are provided in Figure 2‐6 and Figure
2‐7.

23
Development of Bus Route Network for Lagos State – Final Report. Integrated Transport Planning, IBIS
Transport Consultants & AEC. April 2015

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Figure 2‐6: Lagos STMP Land Transport Projects (2032 Horizon)

Source: STMP (Strategic Transport Master Plan (STMP) and Strategic Travel Demand Model (STDM) to Cover the Mega City Region, ALG and europraxis, December 2014)

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Figure 2‐7: Future Lagos Bus Network Showing Locations for Super Hubs and Other Transit Hubs

Source: STMP (same as above)

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Case Studies
The following case studies have been chosen to illustrate examples of cities/agencies facing
similar problems as Lagos and the possible solutions. While it is not intended to replicate these
exactly, they have been highlighted to drive home key points or weak links which need attention
during planning of the projects.

2.5.1 Swami Vivekanand Inter State Bus Terminus (New Delhi, India) – Multi‐
Modal Transit Center to facilitate passenger transfers

Background
This is one of the 3 ISBTs in New Delhi, India. Developed in 1993, it is located over an area of 25
acres in East Delhi serving inter‐state bus traffic between the National Capital Territory of Delhi
and two of the neighboring states of Uttar Pradesh and Uttarakhand (this state does not share
a border with Delhi). It is under the jurisdiction of Delhi Transport Infrastructure Development
Corporation Limited (DTIDCL), a state government public sector entity.
Table 2‐6: Swami Vivekanand ISBT Facts
Parameter Specification
Built‐up Area 99,500 square meters
Inter‐state bus traffic 1,400 – 1,500 per day
Intra‐state bus traffic 1,800 – 2,000 per day (includes buses operated by Delhi Transport Corporation, a
wholly owned state government bus corporation, and cluster buses operated
under a PPP arrangement by Delhi Integrated Multi‐Modal Transit System
(DIMTS) Ltd., an equal equity joint venture of Govt. of NCT of Delhi and IDFC
Foundation.

Inter‐Modal Connections
The ISBT is located adjacent to the Anand Vihar Terminal railway station (one of Delhi’s major
railway stations catering to short distance and long distance rail traffic) and Anand Vihar metro
station, and is flanked by National Highway 56 (a major arterial multi‐state highway in Northern
India). Detailed map is shown in Figure 2‐8.

Issues
Despite the locational advantages of the site, the ISBT is plagued by a plethora of problems
which has prevented it from providing smooth and hassle‐free connectivity to passengers. The
narrow exits and entries to the ISBT are common for buses, private vehicles and pedestrians,
which cause severe congestion. While bus passengers can access the neighbouring Metro
station, commuters cannot directly access the Anand Vihar railway station without first exiting
the ISBT after which they need to climb to a pedestrian skywalk. Similarly, entry to the ISBT
remains a challenge as the main road is usually clogged by rickshaws, commercial vehicles, and
hawkers.

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Figure 2‐8: Swami Vivekanand ISBT at Anand Vihar, Delhi, India

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Redevelopment Plan24
Recognising these issues, DTIDCL has prepared an innovative plan to renovate the ISBT which
includes redeveloping it as a transit orientation location with the following features:

 Parking In Basement: 64 buses, 88 taxis, 100 two‐wheelers and 1400 cars;

 Parking at Surface: 236 buses, 44 taxis, 100 two‐wheelers, 80 cars & 171 Auto‐Rickshaw;

 Separate entrances and exits for the buses, autos and taxis are planned in order to avoid
clash between the different modes of transport;
 Network of foot‐over bridges, escalators and elevators will allow easy and safe movement
of pedestrians between the terminal, metro and railway station;
 Design is differently‐abled friendly;

 Green building using energy, water and other resources to protect the health of the
public, reduce wastage, increase productivity and of course protect the environment;
and
 Landscaping of the open space to beautify the entire area and provision of suitable heat,
ventilation and air conditioning system.
This is an example where similar Mega Inter‐State Bus Terminal was planned with inadequate
focus on passenger commute experience for last mile connectivity and traffic circulation within
and integration with outside traffic. Despite locational advantages, the bus traffic and passengers
suffered for years due to poor emphasis on inter‐modal transit. The terminal is now being
redesigned with emphasis on inter‐modal access and passenger transfers.
Key takeaway – Emphasis on passenger transfers for last mile connectivity, inter‐modal
integration with other Public and Private Transport and Traffic Management plan are critical for
Mega Terminals.

2.5.2 Mien Dong and Mien Tay Bus Terminals (Ho Chi Minh City, Vietnam)

Background
Ho Chi Minh City is served by two long distance inter‐regional bus terminals – Mein Dong in the
east of the city and Mein Tay in the west. While Mien Dong bus Terminal serves passengers
traveling to provinces in the southeast region, the central highlands and northern Vietnam,
Mien Tay bus terminal serves passengers traveling to the Mekong Delta provinces from Tien
Giang, Ben Tre, to Ca Mau.

24
http://www.delhi.gov.in/wps/wcm/connect/doit_dtidc/DTIDC/Home/Redevelopment+Plan/

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Figure 2‐9: Mein Dong Bus Terminal

Inter‐Modal Connections
The Mein Dong terminal is located around 7km from the city center and is one of the busiest
bus terminals in the city. It is linked to the local city bus network with around 11 bus routes
terminating there. However, the terminal is not linked to any other form of public transport,
apart from taxis.

The Mien Tay bus terminal is much smaller than Mein Dong. Every day around 750 buses arrive
and depart at this terminal, serving around 13,000 passengers. This terminal is also connected
to the local city bus network, with around 7 bus routes serving it. It is also not linked to any
other form of public transport apart from taxis.

Issues
Both the Mein Dong and Mien Tay terminals are located in the crowded Binh Thanh district of
the city, and have been blamed for causing significant traffic congestion in the area. To alleviate
this problem the Saigon Municipal Transport Corporation (SAMCO) has decided to construct a
new Mein Dong bus terminal in the outlying District 9 of the city.

Redevelopment Plan
The new Mein Dong terminal will be nearly three times as big as the current one, covering a
total of 16 hectares. The bus terminal will serve about 21,000 passengers per day, with 1,200
buses arriving and departing. On peak days, this will increase to 52,000 passengers and over
1,800 buses.

The terminal will include convenient services including high‐rise car park, repair areas, refueling
stations, transit and cargo trade, and commercial and service areas. The terminal was designed
and developed as a Transit‐Oriented Development (TOD), and is due to open in 2018.

The city authorities are also looking to move the Mien Tay terminal to a new larger site further
away from the center of the city, to ease traffic congestion.

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This is an example where similar Mega Inter‐State Bus Terminal planned for decongesting the city
became a cause for congestion due to inadequate capacity and lack of inter‐modal integration.
Key takeaway – Size of Mega Terminal should be for a long‐term planning horizon and have
potential for expansion overtime. Passenger transit should be a central focus.

2.5.3 Mo Chit Bus Terminal (Bangkok, Thailand)

Background
The Mo Chit bus terminal is the largest bus station in Bangkok connecting the Northern, Central,
Eastern and North‐Eastern provinces of Thailand to the city, as well as linking the city to
neighbouring countries including Cambodia and Laos. Also knows as the Northern bus terminal
or Chatuchak, the Mo Chit bus terminal is primarily operated by the Government Transport
Company. The terminal currently serves 90,000 to 100,000 passengers per day.

Inter‐Modal Connections
The Mo Chit bus terminal is well connected to the local bus network, with 15 bus routes
terminating there. The terminal is also connected to the Mo Chit BTS Sky Train station, one of
the busiest stations on the network, and the MRT Chatuchak station. There is a park and ride
facility nearby, while private taxis also serve the bus terminal. These interchange facilities make
the Mo Chit bus terminal an excellent transport hub in Bangkok.

Issues and Redevelopment Plans

The terminal is located in the Chatuchak area of Bangkok. There were proposals to relocate the
terminal to Rangsit in Bangkok's northern outskirts. However this proposal has been dropped in
favour of expanding on the current site to accommodate 150,000 passengers a day from 90,000‐
100,000 currently being served.

This is an example of a Mega Bus Terminal serving as a transport hub with limited capacity. After
evaluation of options to shift the terminal to the outskirts of the city, the decision was made in
favour of expanding the terminal at the current location (in a high cost real estate market) in light
of passenger convenience.
Key takeaway – Size of Mega Terminal should be for a long‐term planning horizon and have
potential for expansion overtime. Passenger transit should be a central focus.

2.5.4 Bus Terminal and Park Station Precinct (Joburg Park Station), Johannesburg,
South Africa
Joburg Park Station is a major public transport interchange where passengers from all over
Africa, South Africa and Joburg transfer from trains to buses, buses to minibus taxis and more.
Park Station, situated in Braamfontein, bordered by Rissik, Wolmarans, Wanderers and Noord
Streets is the largest station in Africa. Even though it is not strictly an inter‐state bus terminal,
it is a good example of multi‐modal passenger transit, developed by Joburg Development
Authority (JDA) based on transit‐oriented development approach.

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Figure 2‐10: Integrated Transport Options at Joburg Park Station

Source: http://www.jda.org.za/index.php/whatwedo/programmes/inner‐city/parks‐station‐precinct

Public Transport Options

The station connects the following major public transport modes:

 Shosholoza Meyl ‐ a long distance train;

 Gautrain – a rapid rail system;

 Metrobus – various bus routes within Joburg;

 Inter‐Provincial / Cross Border Buses: Various private operators such has Greyhound
provide long distance trips; and

 Minibus taxis and Commuter Minibus Taxis

Inner City Commuter Links project

The purpose of the Inner City Commuter Links project was to create a pedestrian friendly and
walkable urban environment through setting up a network of public spaces, and improved
circulation around and access to formal taxi, bus and rail facilities. The intention was to build an
inner city that is functional and liveable, create a safer and more walkable inner city, and
improve continuity and connectivity for pedestrians towards and between places of work,
public transport and other facilities in a legible and effective way. It also sought to optimise the
use of existing facilities; improve the quality of the public realm, contributing to enhanced safety
and perceptions of safety; and complement urban management initiatives to clean up and
maintain the inner city. The project was implemented in four phases with separate areas being
take up for development and redesign.

Real estate development

The Park Station Inn offers budget accommodation located just 50m from the
Greyhound/Translux Bus Terminal in Johannesburg’s CBD. It offers flexible check‐in times to
facilitate in‐transit passengers.

This is a good example of transit oriented development and leveraging of existing public spaces for
enhancing not just passengers’ but also quality of citizen life.

Key takeaway – Transit hub development coupled with creation of public spaces to provide
enhanced experience for passengers and city’s citizens.

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2.5.5 San Borja Bus Terminal (Santiago, Chile)

Background
San Borja Bus Terminal, located in Santiago de Chile Central Station, is the largest and most
modern bus station in Chile. Locally referred to as North Terminal, historically, this station
housed buses with principal destinations mainly at cities in the north and the Valparaíso Region,
and at Countries such as Argentina and Peru. However, in recent times companies have started
offering buses services that terminate at the southern regions (Chillán, Concepción, Los Ángeles,
Temuco, Valdivia, Osorno, Puerto Montt).

Intermodal Connection
San Borja Bus Terminal is situated a walking distance from: two intercity bus stations, the
Estacion Alameda; the cities train station, and the Metro Station; the intercity underground
railway system. These interchange facilities make Santiago de Chile Central Station a convenient
transport hub for commuters in Santiago.

Issues and Redevelopment Plan

The Central Station area is very busy, due to the significant human traffic from commuters,
although there are security guards, the area can be dangerous, especially if wait periods for
buses are long. A solution was to expand the terminal and improve infrastructure to make the
system more efficient and thus to reduce commuter waiting time and irregularities of
departures. In 2007, with an investment of $8 million made by the Yaconi‐Santa Cruz group in
an effort to expand the Paseo Estación Mall and to promote economic activity in the city, the
terminal was completely remodeled. It was expanded to house;

 80 platforms, with two levels of parking

 Underground (1,000 vehicles), access ramps and
 The terminal, located in a completely roofed second floor of the complex
The redeveloped terminal also includes a modern Information technology (IT) system that
allows the automatic identification of each bus through a barcode that is read by a specially
designed mechanism. This mechanism serves to keep track of data with respect to the departure
and arrival times of the buses, as well as regulating the bus supply at certain times during the
day and periods of the year. This mechanism replaced a manual system, in which papers were
physically delivered at the entrances of the complex. This innovation optimized the times of exit
and has improved the efficiency of the bus service, making it safer and more convenient for
passengers.

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Conclusions

2.6.1 Key Findings

There are currently around 150 interstate bus companies operating services to and from Lagos.
However, they all operate to and from an informal network of parking sites located all over the
city, rather than designated mega bus terminals. These are privately owned sites, where access,
egress and public transport connectivity is all done on an ad‐hoc unregulated basis. All this adds
to the traffic congestion in and around these parks, and to the city as a whole.

There are over 5,600 bus trips per day to and from these parks, with close to
65,000 passengers using these services daily. This volume of traffic coming in
and out of the city on an unregulated basis is one of the factors behind the
traffic congestion in Lagos.

The analysis of interstate bus traffic volumes clearly indicates the need for mega interstate bus
terminals at strategic locations on the outskirts of Lagos city, to ensure that buses do not add
to the city’s traffic congestion. To be effective, however, these locations need to be connected
to public transport services including city buses and taxis, as well as any future planned BRT and
LRT routes.

2.6.2 Data Gaps and Survey

The data received from LAMATA and Planet Projects has given an overall picture about
interstate bus services to and from Lagos, along with passenger numbers and revenue earned.
However, there are still data gaps including the total number of bus operators, fares charged,
facilities at bus parks, and charges paid by operators to park owners, etc. In an attempt to gather
this data, as well as validate existing data, surveys were conducted by the CPCS teams during
February and March. The results of this data collection are presented in Chapter 4.

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Traffic Analysis
Key Messages
Drivers of Growth
Over the last 5 years, bus and other public transport ridership in Lagos has grown by over 10% annually,
and are expected to do so over the coming years. While national GDP is expected to grow around 2%
per annum over the next 10 years, the Lagos State economy is expected to grow significantly faster at
around 8% per annum. Population in Lagos and Nigeria as a whole is expected to grow at 3% per
annum, according to official estimates. Finally Nigeria is experiencing a rapid rate of urbanization,
especially in Lagos State where new urban development schemes are being planned.
Apart from a review of secondary data (LAMATA survey and Planet Projects’ data), the observations
from which have been presented in Chapter 2, the team also undertook primary survey.
Primary Survey data
To validate and enhance the existing data, the project team undertook surveys of interstate bus service
providers and passengers at various locations. In total, surveys were conducted at 25 locations which
have a high concentration of inter‐state bus parks in Lagos. Some key observations are summarised
below:
 Majority of buses are 14‐18 seater capacity, with close to 95% running to full capacity;
 Many of the bus parks are just open spaces at the side of the road with no facilities available for
passengers;
 Security at the parks was very lax; and
 Last mile connectivity is poor
Traffic Modelling Methodology
The combination of the CPCS survey data, which also correlates with the Planet Projects data, indicates
that there are approximately 6,200 interstate bus services to and from Lagos every day, carrying
approximately 71,000 passengers.
We mapped the existing bus parks to determine what the most common origins/destinations are of
the buses using the motor parks. Each of these motor parks were then allocated to one or more of the
5 mega terminal locations, based on their location on the key highways in and out of Lagos. The five
gateway corridors connects Lagos to other parts of the country and other West African countries.
Based on anecdotal evidence, the Lagos‐Ibadan (E1) expressway accounts for the largest share of traffic
in and out of Lagos and it followed by the Lagos‐Abeokuta (A5) expressway. While there are no recent
bus traffic data across these five gateway corridors, a 2016 study of freight traffic in Lagos (as shown
in the map below) provides an indication of the distribution of travel demand across the corridors and
confirms that the Lagos‐Ibadan (E1) expressway is the main gateway corridor in the city.
We developed 3 scenarios with the following annual growth rates in traffic:
 Base case: 2018‐28: 5% ; 2029‐37: 3%
 High growth: 2018‐28: 8% ; 2029‐37: 5%
 Low growth: 2018‐28: 2% ; 2029‐37: 1%
With respect to the terminal location at Epe, given the plans for new city development along the
Lekki/Epe corridor, as well as new Dangote oil refinery near Epe, there will potentially be additional
passengers using the Epe mega terminal from 2020 onwards. To reflect these additional passengers,
the forecasts for Epe only have been in increased by 5% in 2020 and 5% in 2021 (10% overall).

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Key Messages (contd.)

Traffic Projections
For the bus parks the traffic forecasts indicate that there is a significant variance between the number
of buses to be handled daily between individual parks. In 2018, Epe will handle around 330 inter‐state
buses per day, Agbara will have to handle nearly 3 times that volume at around 981 buses a day, while
Berger which is expected to be the largest Mega Terminal will handle over 3,000 interstate buses and
over 40,000 passengers per day.
While the figure for number of buses to be handled appears high, it must be noted that the majority
of these buses have a capacity of less than 20 passengers.
Global Comparisons
Based on the number of buses handled per day, the proposed terminals are not significantly larger
than similar terminals in other developing countries. For example:
 Swami Vivekanand Inter State Bus Terminus (New Delhi, India) handles between 1,800 to 2,000
interstate buses a day, and a similar number of intra‐city buses, with an average capacity of over
70 passengers per bus aggregating to 280,000 passengers daily.
 Mien Dong and Mien Tay Bus Terminals (Ho Chi Minh City, Vietnam) currently handle around 750
buses a day, though they are being expanded to each handle around 1,800 buses on a daily basis,
with average capacity of over 60 passengers per bus.
 Mo Chit Bus Terminal (Bangkok, Thailand) currently serves 90,000 to 100,000 passengers per day.
It is being expanded to handle 150,000 passengers per day.

Approach to Traffic Analysis

This section outlines the methodology and results of the traffic forecasting exercise undertaken
to help determine the size and configuration of the mega terminals required to handle future
traffic flows.

LAMATA identified 5 potential locations where interstate bus terminals could be located. These
are as follows:

 Ojodu Berger – estimated 8 hectares located off the Lagos‐Ibadan expressway

 Sango – estimated 1 hectare located on the Lagos‐Abeokuta expressway

 Agbara – estimated 6 hectares located on the Lagos‐Badagry expressway

 Odogunyan – estimated 155 hectares located on A1 expressway

 Epe – estimated 40 hectares located on Lekki‐Epe expressway

The potential sites are presented in Figure 3‐1.

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Figure 3‐1: Potential project sites for Mega Terminals

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The forecasts have been developed using the following key steps:

 Macroeconomic and historical demand analysis: A review was undertaken of published

socio‐economic profiles as well as the demographic characteristics of Nigeria and the
Lagos metropolitan area. We analysed the relevant economic trends, including
employment, Gross Domestic Product (GDP) and population growth, and urbanization,
to determine how these would drive future transport demand.

 Published data: Since there exists no official baseline for inter‐state buses other that
LAMATA’s internal study which identified bus operators (80) operating from 20 locations
within LMA, we used material obtained from a private company ‐ Planet Projects –based
on a study conducted in 2017, wherein they mapped major bus parks and passenger
flows for inter‐state buses.

 Data collection and surveys: CPCS conducted survey at 25 major locations (40 bus parks
which service inter‐state buses) – with the objective of estimating traffic pertaining to
Inter‐state buses, their Origin/Destination, bus capacities, etc., the details of which are
outlined in Section 4.3.2.

 Traffic modelling and projections: These were developed for three scenarios:
o Base case;
o High growth scenario; and
o Low growth scenario.
It should be noted that these are high‐level forecasts designed to enable us to undertake the
facility design and service configuration for the infrastructure proposed to be built or services
that need to be operated. The high growth scenario reflects unconstrained demand, while the
base case and low growth scenarios normally reflect some kind of constrained demand. It
should be noted that these forecasts are not meant to be investment grade forecasts.

Macroeconomic and Historical Demand Analysis

3.2.1 Macroeconomic factors

The key macroeconomic factor driving the demand for inter‐state bus services in Lagos will be
growth in GDP (for Nigeria as a country as a whole and the State of Lagos in particular),
population and the rate of urbanisation. The following are the key macroeconomic factors that
have been considered:

 As per IMF forecasts25 GDP in Nigeria is expected to grow between 1.5%‐2% per annum up
to 2023;
 As per the Lagos State Development Plan26, the Lagos Sate GDP has grown at 8% annually
between 2010 and 2017, and is expected to grow at 9% per annum to 2015;

25
http://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD/NGA
26
Lagos State Development Plan 2012‐2025, Ministry of Economic Planning and Budget, Lagos State Government

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 According to an Investor’s Guide published by Lagos Global based on research undertaken

by PwC27, the GDP of the formal economy of Lagos State was estimated to be $136.6 billion
in 2015, rising to $355 billion by 2025 – an estimated annual growth rate of 10%;
 According to World Bank projections28, Nigeria’s population is expected to grow by around
3%‐3.5% annually to 2050;
 According to the Lagos State Government’s Bureau of Statistics29, the state’s population
was 17.6 million in 2006, which increased to 23.3 million in 2015, representing an annual
growth of 3.5%; and
 According to the CIA World Factbook30, the urban population of Nigeria was 49.4% of the
total in 2017, and is expected to grow by 4.3% per annum to 2020.
The growth in national GDP, growth in local and national population, and the rate of
urbanization, will be the principal factors that contribute to the growth in inter‐state bus traffic.

3.2.2 Historical demand

While historical data of inter‐State bus passenger numbers to and from Lagos is not available,
data was available for other public transport modes as well total number of vehicles. These are
summarized below:

 Number of passengers using intra‐city bus services in Lagos (LAGBUS) grew at an average
of 11% per annum between 2011 and 201531;
 Number of passengers using rail services in Lagos grew by an average of 15% per annum
between 2011 and 201432, though there was a significant fall in numbers in 2015; and
 As per data provided by LAMATA, the number of vehicles in Lagos grew by an average of
4.3% per annum between 2007 and 2016. This can be taken as a proxy for the growth in
traffic in Lagos.

3.2.3 Urban developments

While the rate of urbanization is Lagos and the surrounding States is expected to increase
significantly in the future, there are also certain specific housing and industrial
developments which are expected to impact on the inter‐city bus passenger ridership.
These include:

 Lagos Sate Government plans to develop new Model Cities in Ikeja, Ikorodu, Lepe, and
Oshodi‐Isolo;
 There are plans to build a new airport for Lagos at Lekki; and

27
Lagos: City of Opportunities, An Investor's Guide, PwC, September 2015 (https://lagosglobal.org/wp‐
content/uploads/2016/05/Lagos‐Investors‐Guide.pdf)
28
https://data.worldbank.org/indicator/SP.POP.TOTL?locations=NG
29
Digest of Statistics 2016, Lagos State Government, Lagos Bureau of Statistics, Ministry of Economic Planning
and Budget
30
https://www.cia.gov/library/publications/the‐world‐factbook/fields/2212.html
31
Transport Statistics 2016, Lagos Bureau of Statistics, Lagos State Government
32
ibid

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 Dangote is building a new oil refinery near Epe that is expected to be operational by 2019.

Data Collection and Surveys

3.3.1 Published data

There exists no official baseline for inter‐state buses. Therefore, we relied on two main sources
of data for secondary review including:

 LAMATA’s internal study identified bus operators (80) operating from 20 locations
within LMA
 Surveys undertaken by Planet Projects33 in 2017, as part of a previous Mega Terminals
study undertaken. The data identified 145 bus or motor parks across Lagos which are
being used by inter‐state operators. These bus parks were classified into 39 areas of the
city. The number of motor parks vary by area, with some areas including Oshodi,
Ikorodu, Ajah, and Cele/Okoto Road having a cluster of 13‐14 motor parks each. A
majority of areas though have only 1‐3 motor parks.
The Planet Projects and LAMATA data have been analysed in greater detail under section 2.2.1.
The number of bus trip and bus passengers per location from the Planet projects data is
summarised in Table 3‐1.
Table 3‐1: Summary of Planet Projects Data (Daily Values)
S.No. Name of Location Number of Bus Trips Number of passengers
1 Abule Egba 25 329
2 Agege 34 481
3 Alaba 3 37
4 Berger 119 1,158
5 Jibowu 184 3,001
6 Obalende 24 329
7 Mile 2 533 4,910
8 Ikotun 65 841
9 Iyana Iba 32 384
10 Iyana Ipaja 264 3,577
11 Ketu 365 4,361
12 Mazamaza 49 688
13 Ojota 757 8,251
14 Oju Elegba 54 734
15 Oshodi 709 10,217

33
Planet Project is one of the most prominent Nigerian companies operating in construction, operation and
consulting for transportation infrastructure in the country. The intra‐city Ikeja Bus Terminal facility was
constructed by Planet Project under World Bank financed LUTP‐2 project.
The CPCS team consulted with Planet Projects to gauge their interest as a potential private sector partner and
also to seek their views on the sector as a whole. They shared data with the CPCS team as a matter of courtesy,
and have been given due credit in the report.

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S.No. Name of Location Number of Bus Trips Number of passengers

16 Oyingbo 58 1,044
17 Yaba 126 1,572
18 Badagry 599 3,591
19 Ikorodu 527 5,415
20 7Up 167 1,927
21 Ajah 169 1,758
22 Ebute Ero 166 1,724
23 Ajegunle 117 1,482
24 Cele/Okota Road 97 1,234
25 Ijora 82 1,087
26 Coker 38 788
27 Palmgrove 56 663
28 Volks 49 645
29 Epe 70 634
30 Pen Cinema 37 373
31 Amuwo Kuje 19 307
32 Adeniji Adele 21 217
33 Idumota 20 205
34 Iyana Ejigbo 13 187
35 Iyana School 13 179
36 Mowo 17 97
37 Ishaga 6 79
38 Oluwole 11 76
39 PPL 4 61
Total 5,697 64,641
Source: Planet Projects

3.3.2 Survey data

To validate and enhance the existing data, the project team undertook surveys of interstate bus
service providers and passengers at various locations. In total, surveys were conducted at 25
locations. Counts were undertaken of the buses arriving at and departing from these locations
and the following data was collected:

 Origin/destination of the service;

 Intermediate stops;
 Time of arrival/departure;
 Journey time;
 Fare paid;
 Number of passengers boarding/alighting;
 Type and capacity of the bus; and

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 Parking fees paid.

The surveys were conducted during weekdays, and it was observed that buses tended to depart
Lagos from early morning till around 11 am. After this there was a lull in traffic, which picked up
again after 4.30 pm when buses begun to arrive34. This indicates that operators prefer to
operate services during the day rather than overnight, most likely driven by security concerns
on the highways at night. Further due to security concerns, our survey team was advised not to
be at the parks after 6 pm.

A summary of our survey results is given in Table 3‐2.

Table 3‐2: Summary of CPCS Survey Results (Daily Values)

S.No.35 Name of Location Number of Bus Trips Number of passengers
1 Abule Egba 93 1,110
2 Agege 21 239
3 Alaba 15 183
4 Berger 175 2,081
5 Fadeyijibowu 89 1,304
6 Iddo 50 742
7 Jibowu 34 494
8 Obalende 50 587
9 Mile 2 237 2,799
10 Ijushaga 13 387
11 Ikotun 39 485
12 Iseri Olofin 5 68
13 Iyana Iba 84 1,248
14 Iyana Ipaja 190 2,728
15 Ketu 57 608
16 Mazamaza 59 788
17 Mile 12 4 60
18 Oja Oba 10 100
19 Ojota 109 1,244
20 Oju Elegba 68 880
21 Oshodi 215 2,933
22 Otto 16 164
23 Oyingbo 68 1,145

34
During the presentation on WP#1 and WP#2 made on April 5, 2018, Engr. Abiodun Dabiri (M.D., LAMATA)
commented on this observation stating that in case of neighbouring states of Ogun and Oyo where the journey
time is estimated to be 1‐2 hours, arrivals into bus parks would be expected throughout the day, especially pre
noon. We have taken cognizance of this.
35
Even though the survey was conducted at 40 individual parks, clusters of parks in close proximity to one another
with the boundaries often being seamless have been treated as 1 park. Therefore, this data has been grouped
under 25 locations.

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System in Lagos

S.No.35 Name of Location Number of Bus Trips Number of passengers

24 Toll Gate 21 277
25 Yaba 70 803
Total 1,792 22,347
Source: CPCS Survey

Other observations from the survey:

 Majority of buses are 14‐18 seater capacity, with close to 95% running to full
capacity;
 Many of the bus parks are just open spaces at the side of the road with little
facilities available for passengers and drivers (sometimes not even public
conveniences);
 Bus Parking fees is unregulated and varies across parks and type (and capacity of
bus); ranges from Naira 200‐1,000 per trip or per day for a 7‐ 18 seater bus to
Naira 2,800 for a bus plying on an international route. Some luxury buses are
charged as much as Naira 15,000 per trip at some parks;
 Security at the parks was very lax; and
 The main public transport to and from the parks were danfos (mini buses) or
private taxis. No designated car parking facilities were available.

Traffic projections

3.4.1 Modelling methodology

To get an overall estimate of the number of inter‐state bus services going to and from Lagos as
well as the total number of passengers, a combination of the Planet Projects data and the CPCS
survey data was used. This gave a total of 47 bus/motor park locations. At each of these
locations, the data reviewed to determine what the most common origins/destinations are of
the buses using the motor parks. Each of these motor parks were then allocated to one or more
of the 5 mega terminals, based on their location on the key highways in and out of Lagos. This
was done based on our knowledge of interstate bus traffic and passenger movements in and
out of Lagos. Most of the buses from an existing bus park were allocated to a single mega
terminal, though some were allocated to two terminals.

For each of the 5 proposed mega terminals, Table 3‐3 describes how many passengers and bus
trips they are expected to serve along with the list of major bus parks which currently cater to
this demand. The daily bus trips and passenger numbers were based on a combination of the
Planet Projects data and the CPCS survey data.
Table 3‐3: Expected Demand Assignment for each of the Mega Terminals (current bus trips and passengers)
S.No. Daily Bus Trips Daily Passengers Mega Terminal Current Motor Parks serving this demand
1 981 7,696 Agbara Badagry
Iyana Iba
Mowo
Amuwo Kuje (20%)

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System in Lagos

S.No. Daily Bus Trips Daily Passengers Mega Terminal Current Motor Parks serving this demand
Cele/Okota Road (32%)
Ebute Ero (20%)
Mile 2 (40%)
2 3,310 40,776 Berger 7Up
Adeniji Adele
Ajegunle
Berger
Coker
Idumota
Ijora
Ishaga
Iyana Ejigbo
Jibowu
Mazamaza
Obalende
Ojota
Oju Elegba
Oluwole
Oyingbo
Palmgrove
PPL
Yaba
Amuwo Kuje (80%)
Cele/Okota Road (68%)
Ebute Ero (80%)
Ketu (60%)
Mile 2 (60%)
Oshodi (70%)
Volks (80%)
3 328 3,695 Epe Ajah
Epe
Fadeyijibowu
4 796 8,784 Odogunyan Alaba
Iddo
Ikorodu
Iseri Olofin
Iyana School
Mile 12
Oja Oba
Otto
Ketu (40%)
Volks (20%)
5. 740 10,111 Sango Abule Egba
Agege
Ijushaga
Ikotun
Iyana Ipaja
Pen Cinema
Toll Gate
Oshodi (30%)
6,154 71,062 Total

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System in Lagos

The combination of the CPCS survey data and the Planet Projects data, indicates that there are
approximately 6,200 interstate bus services to and from Lagos every day, carrying
approximately 71,000 passengers. Over half the bus trips and passengers will use the mega
terminal at Berger, and hence this will have to be the largest of the five facilities. These are
taken to be the current year bus and passenger numbers, and have been taken as the base for
our traffic forecasts.

3.4.2 Traffic projections

The proposed locations are strategically located at the outskirts of the Lagos city, adjacent to
the five main gateway corridors out of Lagos. The establishment of the mega terminals at the
outskirts of the city will assist in reducing the congestion on Lagos roads by stopping inter‐city
bus operators from extending their services into the city. Thus, passengers travelling from other
States will disembark at the mega stations and utilise the Lagos intra‐city transport services
(local buses, rail and inland water transport services, where available) to final destinations
within the city.

The five gateway corridors connect Lagos to other parts of the country and other West African
countries36. Based on anecdotal evidence, the Lagos‐Ibadan (E1) expressway accounts for the
largest share of traffic in and out of Lagos and it followed by the Lagos‐Abeokuta (A5)
expressway. While there are no recent bus traffic data across these five gateway corridors, a
2016 study of freight traffic in Lagos provides an indication of the distribution of travel demand
across the corridors and confirms that the Lagos‐Ibadan (E1) expressway is the main gateway
corridor in the city.

To develop the forecast growth in interstate bus traffic, the following broad factors have been
considered, as outlined on Section 3.2.

 Macroeconomic factors;
 Historic transport demand;
 Urbanisation and urban development plans and;
 The destinations/routes served by individual mega terminals.
Over the last 5 years, bus and other public transport ridership in Lagos has grown by over 10%
annually, and are expected to do so over the coming years. While national GDP is expected to
grow around 2% per annum over the next 10 years, the Lagos State economy is expected to
grow significantly faster at around 8% per annum. Population in Lagos and Nigeria as a whole is
expected to grow at 3% per annum, according to official estimates. Nigeria is experiencing a
rapid rate of urbanization, especially in Lagos State where new urban development schemes are
being planned.

Based on their locations in Lagos, the individual mega terminals will serve a slightly different
combination of regions, states and cities in Nigeria, with services operating along different
routes. This will lead to differences in passenger growth rates for each of the mega terminals,
as the macroeconomic factors influencing traffic will vary based on the regions served. Broadly
we have assumed the individual mega terminals will serve the following regions:

36
The Lagos – Badagry Expressway is expected to be a component of the Lagos – Abidjan Highway corridor and
expected to be a part of the proposed Trans‐West African Coastal Highway from Lagos to Dakar, Senegal.

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System in Lagos

 Agbara: Will serve regions and cities to the West of Lagos as well as international
destinations;
 Sango: Is located on the main Lagos‐Abeokuta (A5) expressway, and will serve regions
and cities to the north of Lagos. This expressway is expected to see a significant
increase in traffic in the future;
 Berger: Is located on the Lagos‐Ibadan (E1) expressway, which accounts for the largest
share of traffic in and out of Lagos, is expected to see a significant increase in traffic
in the future. The mega terminal will serve passengers travelling to most other major
regions and cities in Nigeria;
 Odogunyan: Is expected to serve some of the traffic going to northern cities in Nigeria
including Kano and Sokoto; and
 Epe: Is expected to serve regions and cities to the east of Lagos.
Given the historic demand, macroeconomic factors, future development plans and the location
of the individual mega terminals, Table 3‐4 outlines our assumed growth rates of passengers for
each individual mega terminal in the base case scenario:
Table 3‐4: Interstate Bus Traffic Annual Growth by Mega Terminal

2018‐28 2029‐37
Agbara 6% 4%
Sango 7% 5%
Berger 7% 5%
Odogunyan 5% 3%
Epe 6% 4%
Source: CPCS Analysis

The derivation of these growth rates are described in Figure 3‐2.

Figure 3‐2: Derivation of Traffic Growth Rates

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System in Lagos

In the high growth scenario, it has been assumed that improved service levels, the impact of the
proposed Lagos bus reform program, and better passenger facilities at the mega terminals, will
all lead to additional induced demand for interstate bus services. The traffic growth assumptions
under the 3 scenarios are given in Table 3‐5.
Table 3‐5: Interstate Bus Traffic Annual Growth (3 Scenarios)

2018‐28 2029‐37 2018‐28 2029‐37 2018‐28 2029‐37

Base Case High Growth Low Growth
Agbara 6% 4% 9% 6% 3% 2%
Sango 7% 5% 10% 7% 4% 3%
Berger 7% 5% 10% 7% 4% 3%
Odogunyan 5% 3% 8% 5% 2% 1%
Epe 6% 4% 9% 6% 3% 2%
Source: CPCS Analysis

There are plans for a whole new Model City developments along the Lekki/Epe corridor, as well
as new Dangote oil refinery near Epe which is expected to be operational by 2019. These
developments mean that there will potentially be additional passenger using the Epe mega
terminal from 2020 onwards. To reflect these additional passengers, the forecasts for Epe only
have been in increased by 5% in 2020 and 5% in 2021 (10% overall).

It should be noted that the number of buses operating (i.e. daily bus trips) for the base year are
based on medium size buses with a capacity of 14‐18 passengers each. This bus size reflects our
survey observations and should not be confused with bus capacities used in chapter 4
(specifically table 4‐1) to estimate terminal infrastructure requirements. The number of vehicle‐
trips for future years do take into account the changing composition of buses over time reflected
in the assumption detailed in Chapter 4.

The 20‐year traffic forecasts (both in terms of number of buses operating and passenger
numbers) for each of the mega terminals under each of the scenarios is given in Table 3‐6.

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DRAFT ASSESSMENT REPORT | Mega Terminals Project ‐ PSP in an Integrated Transport System in Lagos CPCS Ref: 17447

Table 3‐6: Forecast of Daily Bus Trips and Passengers at the Proposed Terminals
2019 2023 2028 2033 2037
Vehicle Trips Passengers Vehicle Trips Passengers Vehicle Trips Passengers Vehicle Trips Passengers Vehicle Trips Passengers
Agbara
Base 767 8,158 822 10,299 928 13,783 866 16,769 589 19,617
High 789 8,389 945 11,841 1,227 18,219 1,259 24,382 923 30,781
Low 745 7,927 712 8,922 697 10,343 590 11,419 371 12,361
Berger
Base 4,102 43,630 4,564 57,190 5,402 80,212 5,287 102,373 3,733 124,435
High 4,217 44,853 5,241 65,670 7,122 105,761 7,661 148,336 5,833 194,438
Low 3,987 42,407 3,959 49,610 4,065 60,358 3,614 69,971 2,363 78,753
Epe
Base 368 3,917 395 4,945 446 6,617 416 8,051 283 9,418
High 379 4,028 454 5,685 589 8,747 605 11,706 443 14,779
Low 358 3,806 342 4,284 334 4,966 283 5,483 178 5,935
Odogunyan
Base 867 9,223 895 11,211 964 14,309 857 16,588 560 18,670
High 892 9,487 1,030 12,907 1,277 18,965 1,250 24,204 883 29,420
Low 842 8,960 774 9,699 721 10,708 581 11,254 351 11,711
Sango
Base 1,017 10,819 1,132 14,181 1,339 19,890 1,311 25,385 926 30,856
High 1,046 11,122 1,300 16,284 1,766 26,226 1,900 36,783 1,446 48,215
Low 989 10,516 982 12,302 1,008 14,967 896 17,351 586 19,528
Total
Base 7,121 75,747 7,808 97,826 9,079 134,811 8,737 169,166 6,091 202,996
High 7,323 77,879 8,970 112,387 11,981 177,918 12,675 245,411 9,528 317,633
Low 6,921 73,616 6,769 84,817 6,825 101,342 5,964 115,478 3,849 128,288
Source: CPCS Analysis

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System in Lagos

For the bus parks the traffic forecasts indicate that there is a significant variance between the
number of buses to be handled daily between individual parks. In 2018, Epe will handle around
330 inter‐state buses per day, Agbara will have to handle nearly 3 times that volume at around
981 buses a day, while Berger which is expected to be the largest Mega Terminal will handle
over 3,000 interstate buses and over 40,000 passengers per day. While the figure for number of
buses to be handled appears high, it must be noted that the majority of these buses have a
capacity of less than 20 passengers.

3.4.3 Global Comparison

To put this in perspective, based on case studies discussed in Chapter 3, the following are
examples of traffic handled at similar bus terminals internationally:

 Swami Vivekanand Inter State Bus Terminus (New Delhi, India) – Handles between 1,800
to 2,000 interstate buses a day, and a similar number of intra‐city buses, with an average
capacity of over 70 passengers per bus aggregating to 280,000 passengers daily.
 Mien Dong and Mien Tay Bus Terminals (Ho Chi Minh City, Vietnam) – These terminals
currently handle around 750 buses a day, though they are being expanded to each
handle around 1,800 buses on a daily basis, with average capacity of over 60 passengers
per bus.
 Mo Chit Bus Terminal (Bangkok, Thailand) – The terminal currently serves 90,000 to
100,000 passengers per day. It is being expanded to handle 150,000 passengers per day.
Based on the number of buses handled per day, the proposed terminals are not significantly
larger than similar terminals in other developing countries.

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DRAFT ASSESSMENT REPORT | Mega Terminals Project ‐ PSP in an Integrated Transport System in Lagos CPCS Ref: 17447

Figure 3‐3: Daily Passenger Flow at Mega Terminals based on CPCS Survey

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DRAFT ASSESSMENT REPORT | Mega Terminals Project ‐ PSP in an Integrated Transport System in Lagos

Facility Configuration and

Service Design
Key Messages
Determinants of Terminal Capacity and Design
This chapter provides an implementation blueprint for the Mega Terminals based on assessment of
the following factors based on which the size, capacity and infrastructure to be provided at each Mega
Terminal site has been determined:
 Bus Types and Capacities: Average capacity of Inter‐state buses is anticipated to rise from the
current 19 passengers to 60 passengers in 2037 as the sector becomes more organized and
consolidation of operators occurs. Two bus types (60 and 76 seat capacities) are expected for
Lagos state buses, with a gradual transition to more higher‐capacity buses over time.
 Flow Patterns of inter‐state bus passengers: Based on the survey conducted, flow of inbound
passengers peaks between 6am to 11am while that for outbound passengers peaks between 4pm
to 9pm
 Dwell Times: We used ½ hour on average per passenger between arriving and departing the
terminal.
 Peak Bus Frequency: Each of the facilities is designed to accommodate the number of buses in
the terminal during the time period with the highest number. This occurs between 8am and 9am
for Lagos State buses and between 6pm and 7pm for interstate buses.
Based on the above, we project the maximum hourly bus frequency for each Terminal for Base, High
and Medium scenarios.
Terminal Design Criteria and Capacity
We recommend that terminals be designed to accommodate the number of buses in revenue service
based on the 2037 base case traffic scenario. The Lagos State buses will be a mix of 76 and 60 seater
buses and will require parking space of 100 m2 per bus. The interstate Buses will be 60 seater buses
and will require parking space of 90 m2 per bus. We provide estimates for land requirements based on
the above requirements, assuming additional land requirements of 50% (of parking requirements) for
drive lanes and passenger walkways.
Terminal Site Land Requirements (hA) Available Land (hA)
Agbara 1.7 6
Berger 10.6 8
Epe 1.0 40
Odogunyan 1.7 155
Sango 2.9 1
While the above land requirements are for operational purpose, based on the attractiveness of the
particular sites, land maybe developed on a commercial basis for expanding revenue base.

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DRAFT ASSESSMENT REPORT | Mega Terminals Project ‐ PSP in an Integrated Transport System in Lagos

Key Messages (contd.)

Core Infrastructure Facilities
Key principles on which we have based our site design include:
 Segregation of passenger and vehicle traffic by physical barriers where possible and with painted
crossing marks otherwise;
 Separate parking areas as well as entrances and exits for Lagos State and Interstate buses;
 One way bus flow (except in exceptional cases) with saw tooth parking;
 Terminal buildings at the centre of the parking areas for Lagos State and Interstate buses;
 Site perimeter secured by chain link fence; and separation of non‐revenue from revenue areas by
chain link fence;
 Controlled access into the terminal at all entry/exit points; and
 Disabled friendly.
Transit Oriented Development
Terminals are largely designed as connection hubs for interstate travellers to connect between
interstate and Lagos State buses. Larger terminals will include park‐and‐ride facilities. All ISBT will
permit entry by pedestrians. We analyze the possibility of developing ISBT into transportation hubs
by using the sites for stations for LRT lines and BRT.
Terminal Building
The main purpose of the terminal building is to facilitate ticket sales to passengers both via vending
machines and sales counters; to provide real‐time passenger information; and to provide basic
passenger amenities such as washrooms and rest areas. They are to be aesthetically attractive to users
and to provide them with a positive experience by including spacious and bright passenger areas with
comfortable seating, as well as adequate facilities for the mobility impaired.
Services and Revenue sources
 Parking spots for Lagos State buses and interstate buses to collect and discharge passengers
(Gate‐to‐gate time of 45 minutes for collecting and 15 minutes for discharging) for an access fees
 Stabling, cleaning and (possibly) maintenance facilities for Lagos State buses when not in revenue
service for a lease rental
 Terminal Building with space for:
o ticket sales (by operators or third parties)
o passenger amenities
o retail and dining
 Park‐and‐ride and Kiss‐and‐ride facilities
Commercial Development
Based on permissible land use and building regulations, the following are the potential avenues for
commercial development:
 Concession stands;
 Leasing of retail/commercial space; and
 Advertising.

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DRAFT ASSESSMENT REPORT | Mega Terminals Project ‐ PSP in an Integrated Transport System in Lagos

Background
In order to determine the number of interstate and the Lagos State (city) buses needed to
handle this traffic, we need to anticipate the bus types, capacities, and load factors in future
years.

4.1.1 Bus Types and Capacities

Based on data included the Inter‐state Gateways Terminals prepared by LAMATA and the CPCS
Bus Park surveys, Table 4‐1 gives estimates of buses and bus capacities plying the terminals in
the future years.
Table 4‐1: Estimted Type and Capacity of Interstate and Lagos State Buses

Bus Capacity 2018 2023 2028 2033 2037

Interstate Buses
Minibuses 15 59% 60% 54% 42% 0%
Cars 7 28% 14% 7% 0% 0%
Luxury Bus 60 13% 26% 39% 58% 100%
Average Capacity 19 26 32 41 60

Lagos State Buses

Marco Polo high capacity buses 76 15% 35% 55% 75% 95%
Marco Polo low capacity buses 60 85% 65% 45% 25% 5%
Average Capacity 62 66 69 72 75
Source: CPCS Analysis

4.1.2 Patterns of Flow

Daily distribution of passenger flows over a typical 24‐hour day were modelled based on data
collected through surveys, as given in Figure 4‐1 and Figure 4‐2:

Figure 4‐1: Distribution of Inward Passengers on typical day

16.00%

14.00%

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
1300
1400
1500
1600
1700
1800
1900
2000
2100
2200
2300

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DRAFT ASSESSMENT REPORT | Mega Terminals Project ‐ PSP in an Integrated Transport System in Lagos

Figure 4‐2: Distribution of Outward Passengers on typical day

16.00%

14.00%

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
1300
1400
1500
1600
1700
1800
1900
2000
2100
2200
2300
Source: CPCS Analysis

4.1.3 Dwell times

In our analysis, we used ½ hour on average per passenger between arriving and departing the
terminal. Projected arrival and departure times are given in Figure 4‐3 and Figure 4‐4.
Figure 4‐3: Projected Arrival and Departure Times of Inbound Passengers at Berger Interstate Terminal (2023,
High Traffic Scenario)

4500
4000
3500
3000
2500
2000
1500
1000
500
0
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
1300
1400
1500
1600
1700
1800
1900
2000
2100
2200
2300

Inbound Passengers arriving at terminal

Inbound Passengers departing terminal

Source: CPCS Analysis

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DRAFT ASSESSMENT REPORT | Mega Terminals Project ‐ PSP in an Integrated Transport System in Lagos

Figure 4‐4 Projected Arrival and Departure Times of Outbound Passengers at Berger Interstate Terminal (2023,
High Traffic Scenario)

4500
4000
3500
3000
2500
2000
1500
1000
500
0
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
1300
1400
1500
1600
1700
1800
1900
2000
2100
2200
2300
Outbound Passengers arriving at terminal
Outbound Passengers departing terminal

Source: CPCS Analysis

In calculating the number of buses arriving and departing the terminal, we assumed load factors
of 1 meaning that on average, both interstate and Lagos State buses arrive and depart the
terminal at capacity. In addition, we assumed that interstate buses and Lagos State buses were
parked for 15 minutes when arriving to deliver passengers to the terminal and 45 minutes when
picking up passengers for departure. Figure 4‐5 indicates estimates of the number of buses in
revenue service parking at the Berger Terminal per hour through the day. (Berger Terminal has
been used for illustrative purposes in this section).
Figure 4‐5 Buses in Berger Terminal through typical Day (2023, High Traffic Scenario)

140

120

100

80

60

40

20

0
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
1300
1400
1500
1600
1700
1800
1900
2000
2100
2200
2300

Lagos State Buses in Depot Interstate Buses In Depot

Source: CPCS Analysis

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DRAFT ASSESSMENT REPORT | Mega Terminals Project ‐ PSP in an Integrated Transport System in Lagos

Each of the facilities will be designed to accommodate the number of buses in the terminal
during the time period with the highest number. This occurs between 0800 and 0900 AM for
Lagos State buses and between 1800 and 1900 for interstate buses. Within our calculations, we
have allowed for 15 minutes in the terminal for buses with passengers disembarking and 45
minutes for passengers boarding.

It is our recommendation that terminals be designed to accommodate Lagos State buses until
2037 in the base scenario37. In addition, we recommend that terminals be designed to
accommodate interstate buses based on 2037 base scenario traffic estimates and also the
projected bus mix of 2037 (60‐passenger capacity) as per Table 5‐1. Given the transition to
higher‐capacity interstate buses, it will be necessary to reconfigure the bus parking over time.
Clearly, if traffic develops as per base case projections, the terminal will have excess capacity
until 2037. However, it is our belief that this is more economical than having to add capacity
within the 15‐year period.

Size and Location of Terminals

4.2.1 Size of terminals

Terminals will be designed to accommodate the number of buses in revenue service based on
the 2037 base case traffic scenario. The Lagos State buses will be a mix of 76 and 60 seater buses
and will require parking space of 100 m2 and 90 m2 per bus. The interstate Buses will be 60
seater buses and will require parking space of 90 m2 per bus. The revenue bus parking
requirements per terminal is given in Table 4‐2.
Table 4‐2: Revenue Bus Parking Requirements – 2037 base case

Design Capacity (buses)

Terminal Lagos State Buses Interstate Buses
Agbara 14 19
Berger 88 121
Epe 7 9
Odogunyan 13 18
Sango 22 30

In addition, we propose that there be additional parking for Lagos State buses when not in
revenue service. Our analysis is based on providing sufficient parking in revenue and non‐
revenue parking lots for all Lagos State buses serving the terminal. In order to estimate the

37
We considered designing the terminals as per 2037 high‐scenario traffic levels instead of 2037 base case.
However, given the time span of 15 years, we felt this was too much of a stretch. 2037 base case projects are the
about the same as 2025‐26 high scenario. So even if traffic grows in line with the high scenario, it will be 2025 or
2026 when bus parking capacity will need to be increased. All sites are of land area to permit future expansion
beyond design capacity (based on 2037 base case traffic levels) except for the Sango site because of limitation of
land availability. Terminals will be designed to facilitate the addition of parking for interstate and Lagos State buses
if and when needed.

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DRAFT ASSESSMENT REPORT | Mega Terminals Project ‐ PSP in an Integrated Transport System in Lagos

number of the buses serving each terminal, we assumed cycle times38as given in Table 4‐3.
Projections were based on 2037 base case traffic scenarios.
Table 4‐3: Lagos State Bus Parking – Not in Revenue Service – 2037 base case

Terminal Cycle Time Non‐revenue

(hours) Bus Parking
Spots required

Agbara 6 64
Berger 6 404
Epe 10 41
Odogunyan 8 69
Sango 8 115

4.2.2 Land requirements

Assuming additional land requirements of 50% (of parking requirements) for drive lanes and
passenger walkways, the total land requirement for individual parking facilities are given in
Table 4‐4.
Table 4‐4: Land Requirement (m2) for Parking of Buses at each Terminal

Terminal Revenue Non‐Revenue

Lagos State buses Interstate buses Lagos State buses
Agbara 1,707 2,352 7,853
Berger 10,289 14,918 49,814
Epe 820 1,129 5,043
Odogunyan 1,625 2,238 8,544
Sango 2,685 3,699 14,121

Additional land will be required for terminal buildings and employee parking. Depending on
local demand at each terminal, facilities could include kiss‐and‐ride39, park‐and‐ride and local
public transit parking. We have assumed between 33% (Berger) and 50% (Epe) of bus parking
requirements for these facilities. The total land requirements per terminal is given in Table 4‐5.
Table 4‐5: Land requirements for Terminals

Terminal Site Land Requirements (hA) Available Land (hA)

Agbara 1.7 6
Berger 10.6 8
Epe 1.0 40
Odogunyan 1.7 155
Sango 2.9 1

38
Cycle time is the between departure from and return to the terminal but does not include time in terminal
awaiting passengers.
39
Kiss and ride refers to facilities for the dropping off and picking up of passengers as opposed to park‐and‐ride
where commuters drive to parking lots and park their cars for the day.

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DRAFT ASSESSMENT REPORT | Mega Terminals Project ‐ PSP in an Integrated Transport System in Lagos

With the exception of Sango and Berger, there is more than ample land available at all proposed
terminal sites. In the case of Sango, the size of the site may limit development of the site with
all the required facilities. This is best dealt with in future years by converting non‐revenue
parking areas to revenue parking areas; and arrange for non‐revenue parking (stabling off‐site).

4.2.3 Suitability of identified locations

Listed below are some further observations on individual sites that require confirmation by
LAMATA:

 All sites appear suitable and we have not come across any information which would
preclude them from serving as bus terminals subject to successful land acquisition;
 Road access to all sites is good; access to Agbara and Berger will require grade
separations for road and pedestrian access on account of buildup in the local areas;
 Utility access seems conducive at all sites;
 Agbara and Sango sites are prone to flooding and will require detailed study and likely
significant measures to prevent flooding; and
 Please see Chapter 8, Section 8.3 for assessment of land ownership and estimates for
acquisition costs.

4.2.4 Additional locations proposed by MOT

The Lagos State Ministry of Transport (MOT) provided us with 9 additional potential locations
for mega terminals on August 2, 2018. These were at:

 Ojodu/Abiodun (Yakoyo Road)

 Ojodu‐Berger (Inward Lagos)
 Ajegunle (At Abukan between Alakuko and Ajegunle)
 Ipaja/Ayobo (Located at Ayetoro)
 Ogijo
- Option 1: Located at Ita Oluwu bus stop
- Option 2: Located at Barrack bus stop
 Itoikin (Located at Idera)
 Mojoda (Located at Odo Ajagun)
 Agbara
 Mowo
No detailed assessment or site visits were undertaken at these locations due to the fact that
information about them was received very late during the project. However, a preliminary
assessments of the sites revealed that these sites are far too small to accommodate a mega
terminal. They appear to be narrow strips (6‐7m wide by 30m in length) by the side of the road.

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Service Requirements and Passenger Amenities

4.3.1 Core Infrastruture requirements

A review of bus terminal projects from around the world suggests that the best practices in
terminal planning and design are people centric. As such, the design of bus terminal
infrastructure, its operation and maintenance should be guided by the vision of securing a high
level of safety and comfort for passengers combined with efficient and organized operations of
buses within the terminal. Key principles on which we have based our site design include:

 Passenger Safety and Security

- Segregation of passenger and vehicle traffic by physical barriers where possible and
with painted crossing marks otherwise
- Entry into terminal permitted only to paid customers and bus and terminal staff with
security assured by perimeter chain link fencing as well as gated and guarded vehicle,
pedestrian and staff entrances.
- Lighting designed to meet minimum illumination levels and quality standards for
both indoor and outdoor application. With maximum use of natural lighting elements
such as sky lights in terminal buildings.
- Signage, including both dynamic and fixed signage, to assure safe and efficient
movement of vehicles and passengers.
- Public address system integrated into the design, at all terminal facilities to provide
a robust, functional, and visually discrete system that can provide communicative
information and also be linked to the security
 Passenger Comfort
- Terminal buildings at the centre of the parking areas for Lagos State and Interstate
buses with amenities such as ticket sales, waiting areas, washrooms, baggage
storage, retail and restaurant areas.
- Sufficient seating within the terminal to accommodate 20% of passengers during
peak hour of operation. Seating will be located within terminal buildings and also
located within the bus parking areas where it will be necessary to locate seating so
as to avoid obstruction to the flow of passengers. Seating should be designed to
combine comfort, ease of maintenance and resistance to vandalism.
- Hardscape and landscaping: Outdoor passenger areas will be smoothly hardscaped
and clearly marked to smooth passenger flow. The paving’s surface quality will
ensure durability as well as resistance against wear, walking comfort and usability by
wheelchairs and baggage trolleys. Appropriate space within the terminal
(approximately 10%) will be set aside for landscaped areas of grass, flowers and
trees.
- The intention is that all surfaces within each terminal will be on one single level.
However, there may be requirements for stairs in some cases. Where so, designs will
incorporate ramps of appropriate design to accommodate impaired person.

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 Operating Efficiency

- Terminal buildings will be located near the center of terminals with parking areas for
interstate and Lagos State buses to load/unload passengers on either side so to facilitate
passenger transferring directly between buses or having only a short diversion if they
choose to pass with terminal buildings.

- Areas for Lagos State buses will be separate from those for interstate buses; each with
their own gated entrances and exits.

- Terminal buildings will be located with close access to park‐and‐ride and kiss‐and‐ride
facilities (if terminals are so equipped40) and also accessible from public roads for
passengers who arrive on foot. LAMATA should consider linking the terminals to the LRT
network, when lines close to the terminals become operational.

- Drive lanes within parking will be one directional and parking will saw‐tooth.

4.3.2 Terminal Buildings

The main purpose of the terminal building is to facilitate ticket sales to passengers both via
vending machines and sales counters; to provide real‐time passenger information; and to
provide basic passenger amenities such as washrooms and waiting areas. However, it is
recommended that the commercial potential of the terminal building should be exploited by
including commercial space for restaurants and retail outlets. It is also recommended that the
station buildings be designed to be aesthetically attractive to users and to provide them with a
positive experience by including spacious and bright passenger areas with comfortable seating,
as well as adequate facilities for the mobility impaired.

4.3.3 Lagos State and Inter‐State bus parking areas

Parking layout in the Lagos State bus areas should be designed to meet the physical
characteristics of each site and the operational requirements of the terminals. However, it is
recommended that if site layout permits, saw tooth parking sites be utilized. Unlike the Lagos
State buses, it is expected that there will be various vehicle types plying interstate services
including cars, minibuses and luxury buses. The layout of these parking facilities will depend on
the type of interstate buses using the terminal, which are expected to change over time.

A key factor in designing bus parking areas is to ensure the physical separation of pedestrian
walkways from bus parking and driving surfaces. This can be done by use of curbs, fencing,
bollards and grade separated footpaths. Signage needs to be clear, logical and well‐placed and
as required, paint marks and lighting should be used to illustrate and illuminate the routing.
Pedestrian areas will need to be sufficient for passenger queuing for buses, and these areas will
need to be clearly set out and positioned so that they do not restrict the movement of other
passengers. At key locations, it is recommended to include benches with at least some of them
covered.

40
Determination of whether these facilities should be included at each terminal is beyond the scope of this study
and is subject to more analysis. We have included for park‐and‐ride facilities in the Berger Terminal for illustrative
purposes.

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Road access to and from the parking areas will be separated from each other to avoid congestion
around the areas impeding bus movements. All parking and walking areas in the revenue areas
should be paved with concrete or tarmac. The perimeter of revenue areas should be secured
with chain‐link fencing and all pedestrian and vehicle access points should have the facility to
be closed and secured. Facilities will have to be installed to control vehicular access into parking
areas.

4.3.4 Non‐revenue areas

The parking site for Lagos State buses in non‐revenue service will be separate from the rest of
the station terminal site but be connected to the Lagos State bus revenue parking areas to
enable easy access for buses and employees. The main purpose of these areas are to permit
parking of all Lagos State buses serving the terminal when not in service. We have designed
capacity so there is sufficient in revenue and non‐revenue areas to park all buses serving the
terminal (based on 2037 base case traffic scenario).

These non‐revenue areas should will also include facilities for employees for booking in and
resting, as well as any facilities for operations control and management. The larger terminals
will include in‐ground fuel tanks and fueling equipment. Terminals with fewer buses will include
fueling sites where buses can be safely fueled from trucks. All terminals will include facilities for
nightly exterior and interior cleaning of buses. In addition, larger terminals (such as Berger) will
include one or more bays for routine and light maintenance (such as oil and tire changes). Staff
parking should also be included within the facility. The perimeter of the non‐revenue areas
should be secured by chain‐link fences, and the gates protected electronically or by guards. All
parking and walking areas in the non‐revenue areas should be paved with either concrete or
tarmac.

4.3.5 Commercial Development

Some proposed ISBT sites hold more promise for commercial development particularly the
Berger site on account of its location and size as well as significantly higher anticipated traffic
levels. Although unprecedented in Nigeria and likely a number of years away from being
seriously considered, the possibility does exists for development in a major transit hub
consisting of major retail/restaurant space, commercial offices and lodging.

The addition of LRT stations to the terminals will go a long way to making any of the terminals
a true transit hub. As indicated in Figure 4‐6, the proposed locations for Berger and Agbara
indicate promise as being locations for Purple Line stations and Epe holds promise as the eastern
terminus for the Green Line.

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Figure 4‐6: Mega Terminals and Linkages with Planned LRT Lines

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System in Lagos

Conceptual Design and

Layout
Key Messages
Based on the above, we present conceptual layouts for the terminals. The summary of the major design
components is presented below.

Berger Sango Agbara Epe Odogunyan

Passengers per Day (2037
124,435 30,856 19,617 9,418 18,670
base case)
Total Parking Areas (spaces) 613 166 96 57 100
Terminal Area Requirements
10.58 2.87 1.67 0.98 1.74
(hA)
Paved Area (SM) 75,560 20,506 11,912 6,992 12,407
Landscaped Area (SM) 26,220 6,666 3,229 1,261 3,427
Terminal Building (SM) 1,800 500 500 500 500
Maintenance Depot (SM) 2,000 900 900 900 900
Guard Houses (No.) 6 4 4 4 4
Vehicle Access Points (No.) 6 4 4 4 4
Passenger Access Points
2 1 1 1 1
(No.)
Fencing (LM) 1,500 407 236 139 246

Concept Drawings

5.1.1 Layout Drawings

In the Figure 5‐1 and Figure 5‐2, we present the terminal layouts for the Sango and Berger
terminals designed in accordance to principle presented in the prior chapter.

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System in Lagos

Figure 5‐1: Sango Terminal

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Figure 5‐2: Berger Terminal

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System in Lagos

5.1.2 Terminal Buildings

Figure 5‐3 to Figure 5‐6 present the terminal and maintenance building layouts for the Berger
and Sango terminals designed in accordance to principles presented in Chapter 4.
Figure 5‐3: Berger Terminal Building

Figure 5‐4: Sango Terminal Building

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System in Lagos

5.1.3 Maintenance Depots

Figure 5‐5: Berger Maintenance Depot

Figure 5‐6: Sango Maintenance Depot

Capital Cost Estimates

5.2.1 Land acquisition

Table 5‐1 presents the land acquisition costs for each of the proposed mega terminals.

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System in Lagos

Table 5‐1: Land Acquisition Costs for Terminals

Terminal Site Land Site Acquisition Cost Site Acquisition Cost

Requirements (hA) (US$ 000) (Naira 000 000)
Agbara 1.7 579 208
Berger 10.6 22,773 8,198
Epe 1.0 476 171
Odogunyan 1.7 844 304
Sango 2.9 1,396 502
Source: CPCS Estimate based on Market Consultations

5.2.2 ISBT design and construction

Capital costs of design and construction were estimated in two ways:

 A bottom approach based on detailed unit costs and quantities as developed by the project
engineers;

 A top down approach based on broad quantities and application of unit costs as deduced
from cost on designs and capital cost estimates as prepared by Project Planet for the Ikeja
Bus Terminal.

As there was a wide gulf in estimates using the two approached, we developed estimates using
a hybrid. Quantities used are given in Table 5‐2:
Table 5‐2: Quantities used per Terminal

Berger Sango Agbara Epe Odogunyan

Passengers per Day (2037 base case) 124,435 30,856 19,617 9,418 18,670
Total Parking Areas (spaces) 613 166 96 57 100
Terminal Area Requirements (hA) 10.58 2.87 1.67 0.98 1.74
Paved Area (SM) 75,560 20,506 11,912 6,992 12,407
Landscaped Area (SM) 26,220 6,666 3,229 1,261 3,427
Terminal Building (SM) 1,800 500 500 500 500
Maintenance Depot (SM) 2,000 900 900 900 900
Guard Houses (No.) 6 4 4 4 4
Vehicle Access Points (No.) 6 4 4 4 4
Passenger Access Points (No.) 2 1 1 1 1
Fencing (LM) 1,500 407 236 139 246
Source: CPCS Estimate

Units costs applied and cost estimates are provided in Table 5‐3:
Table 5‐3: Unit Costs Applied

Item Unit Costs Unit

(USD)
Category 0 ‐ Mobilization 250,000 lump sum
Category 1 ‐ Site Prep 40 sqm

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System in Lagos

Item Unit Costs Unit

(USD)
Category 2 ‐ Parking, Roads, Walks and Landscape 200 sqm
Category 3 ‐ Terminal Building 750 sqm
Category 4 ‐ Maintenance Depot 700 sqm
Category 5 ‐ Gate & Gate Houses 100,000 entrance
Category 6 ‐ Fence 250 m
Category 7 ‐ Electrical and Mechanical 1,500,000 lump sum
Category 8 – Traffic Management System 25 lm
7.5% Contingency 7.5% percentage
5% Local Tax 5.0% percentage
Source: CPCS Estimate

The estimated capital costs are given in Table 5‐4:

Table 5‐4: Capital Cost Estimates per Terminal (USD '000)

Item Berger Sango Agbara Epe Odogunyan

Category 0 ‐ Mobilization 2.5 2.5 2.5 2.5 2.5

Category 1 ‐ Site Prep 42.3 11.5 6.7 3.9 6.9
Category 2 ‐ Parking, Roads, Walks and Landscape 203.6 54.3 30.3 16.5 31.7
Category 3 ‐ Terminal Building 13.5 3.8 3.8 3.8 3.8
Category 4 ‐ Maintenance Depot 14.0 6.3 6.3 6.3 6.3
Category 5 ‐ Gate & Gate Houses 6.0 4.0 4.0 4.0 4.0
Category 6 ‐ Fence 3.8 1.0 0.6 0.3 0.6
Category 7 ‐ Electrical and Mechanical 15.0 15.0 15.0 15.0 15.0
Category 8 ‐ TMS 18.9 5.1 3.0 1.7 3.1
Sub‐total 319.5 103.5 72.1 54.1 73.9
7.5% Contingency 24.0 7.8 5.4 4.1 5.5
5% Local Tax 16.0 5.2 3.6 2.7 3.7
TOTAL CAPITAL COST (Operational Side of Mega 359.5 116.5 81.1 60.8 83.1
Terminals)
Source: CPCS Estimate

5.2.3 Phased Development

There are limited opportunities for cost‐effective phased development of the ISBT’s for the
next 25 years. We recommend that terminals and maintenance buildings be built from the
outset based on anticipated 2037 traffic projections. Stations can be outfitted for retail and
dining facilities and maintenance buildings can be outfitted with equipment and systems for
maintenance, cleaning and management of buses as need arises but we anticipate that this
will be in the first few years of operation. In addition, we recommend that the entire site be
prepared and fencing installed around the perimeter and between revenue and non‐
revenue areas from the outset. In addition, security gates and structures should be installed
before the start of operation in order to assure safe and efficient flow of passengers and
vehicles.

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System in Lagos

We do see an opportunity to construct paved parking and driving areas in a phased manner.
As such, we have budgeted for incrementally adding parking spaces and road access to them
at five year increments. We do not see the same opportunity to developed landscaped areas
in the same manner given their close proximity to terminal buildings. Table 5‐5 identifies the
cost distribution of category 2 costs (Parking, Roads, Walks and Landscape) that has been
used in our financial analysis.
Table 5‐5: Category 2 – Parking, Rods, Walks and Landscape Phasing over Project Period

Timing of Expenditure Berger Sango Agbara Epe Odogunyan

Jan 1, 2019 59.9% 59.2% 62.6% 59.8% 68.7%

Jan 1, 2024 13.7% 14.0% 14.0% 15.0% 13.0%
Jan 1, 2028 13.2% 13.4% 12.0% 12.9% 9.6%
Jan 1, 2034 13.2% 13.4% 11.4% 12.3% 8.7%
Source: CPCS Estimate

Operating Cost Estimates

Operating cost estimate are provided below based on cost category.

5.3.1 Terminal Staffing Costs

Based on industry research and consultations, Table 5‐6 summarizes staff requirements and
personnel costs per annum. It should be noted the salaries are for the base year 2018.

5.3.2 Terminal Infrastructure Maintenance Costs

Yearly terminal infrastructure maintenance costs are estimated to be 1% of upfront
infrastructure development costs.

5.3.3 Commercial Infrastructure Maintenance Costs

Yearly commercial infrastructure maintenance costs are estimated to be 1% of upfront
development costs to account for the maintenance of circulation spaces within the commercial
areas.

5.3.4 Other Costs

Other costs include utilities, insurance, and the like and are estimated to be 15% of all other
operating costs.

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Table 5‐6: Staffing Requirements and Costs at each Terminal

Staffing Cost per Terminal: Terminal Terminal Leasing Leasing Officer Area (in Cleaning Staff Park Parking Area (in Ha) Security Total Cost
Manager Manager Officer (US$ Ha) for Public Areas Control Control requiring Staff for (US$ 000)
(# of (US$ (# of Salary/person requiring (US$ Cost/ha)1 (# of (US$ Security Public Areas
Personnel Salary/person Personnel ) Cleaning Personnel) Salary/perso (US$
) ) ) n) Cost/ha)1
Agbara 1 15,000 1 9,000 1.67 1,130 6 1,700 1.67 420 39

Berger 1 15,000 1 9,000 10.58 1,130 10 1,700 10.58 420 57

Epe 1 15,000 1 9,000 0.98 1,130 6 1,700 0.98 420 38

Odogunyan 1 15,000 1 9,000 1.74 1,130 6 1,700 1.74 420 39

Sango 1 15,000 1 9,000 2.87 1,130 6 1,700 2.87 420 40

1. It is assumed that cleaning and security services would be subcontracted to a third party in order to control costs
Source: CPCS Estimate based on Industry Research and Consultations

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Terminal Access Charges

Imposing a reasonable terminal access charge on passenger vehicle operators that patronize
mega terminals is common around the world. In the context of LAMATA’s vision to develop
mega terminals with PSP, access charges will be required to ensure viability. In parallel,
regulations accompanied with strong enforcement will be required to ensure patronage (and
thus, the terminal operator’s ability to collect access charge revenues). In the absence of
regulation with enforcement, it would be difficult to engage PSP in any meaningful way (i.e.,
through significant risk transfer).

With regulation, all bus operators will be subject to the access charge and so, operators will
likely to pass this onto the passengers. Thus, it is really the passengers’ ability to pay the access
charge that will determine the access rate.

Based on desktop research, we note that the trip cost for inter‐State trip (i.e., from any state in
Nigeria to Lagos) is, on average, 5,000 Naira. Similarly, the average trip cost from the proposed
terminal locations to the Lagos Metropolitan Area (assuming an average of 43km and 103
minutes) is approximately 2,870 Naira. Noting that access charges would likely be passed onto
passengers, we are of the view that passengers could absorb an access charge that is between
1.0% and 2.0% of related trip costs. Based on this, the table below summarizes terminal access
charges per passenger vehicle type along with the additional implied transportation cost per
passenger (Figure 5‐7 presents a conceptual illustration of the proposed terminal access
charges).
Table 5‐7: Summary of Terminal Access Charges per Vehicle Type and Implied Additional Transport Cost per
Passenger (all Figures in Naira)

Vehicle and Vehicle Bus Operator Terminal Terminal Average Average

Capacity Operating Transport Access Charge Access Charge Implied Implied
Category Tariff Revenue per Vehicle per Vehicle Additional Additional
assuming 100% (2.0% of (1.0% of Transportation Transportation
Capacity Transport Transport Cost per Cost per
Utilization1 Tariff Revenue) Tariff Revenue) Passenger at Passenger at
2.0% of 1.0% of
Transport Transport
Tariff Tariff
Minibuses Inter‐State 75,000 1,500 750 100 50
(15 seats)
Luxury Bus Inter‐State 300,000 6,000 3,000 100 50
(60 seats)
Marco Polo Lagos State 238,255 4,363 2,181 57 29
High Capacity
(83 seats)
Marco Polo Lagos State 172,233 3,444 1,722 57 29
Low Capacity
(60 seats)
1. 100% is reasonable in our view as bus operators typically wait till vehicles are full before departing

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Figure 5‐7: Conceptual Summary of Terminal Access Charges per Vehicle

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We recommended that access charges be levied on a per seat basis (instead of a per passenger
basis) towards incentivizing high capacity utilization. Furthermore, the terminal access charges
should be varied between vehicle types, with lower capacity vehicles facing a higher charge.
This would move the industry towards using higher capacity vehicles, in‐line with our traffic
forecast.

For modelling purposes, the base case where passengers can absorb 2.0% of transport costs as
terminal access charges is assumed. However, a sensitivity analysis is conducted to assess how
changes in this percentage interact with the project valuation (and resulting implications).

We have also assumed that bus operators pay for access charge upon entering the facility. Even
though operator

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Financial and PPP Analysis

Key Messages
Economic Analysis
One of the main justifications for this project is to reduce the traffic congestion caused by having
numerous bus parks in the centre of the LMA, which are served by cars, Danfos and city buses. Moving
these bus parks out of the centre of Lagos will significantly improve travel times for all road users. The
primary benefit of this project is therefore the journey time savings accruing to road users.

Mega Terminal ENPV (USD 000) EIRR

Agbara ‐5,915 ‐1.9%
Berger 48,636 24.9%
Epe 1,549 15.9%
Odogunyan 25,976 52.7%
Sango ‐11,044 ‐8.1%
All Terminals 16,641 14.8%

Commercial and Financial Analysis

The overall project is economically viable, and all terminals deliver a positive operating ratio.

The unlevered cash flow profile and net present value per terminal shows that except for the proposed
mega terminal at Epe, all other terminals generate sufficient terminal access and leasing revenues to
cover capital (including land acquisition) and operating costs.

Based on the results of the unlevered analysis, we recommend that the private sector be engaged in a
Design‐Build‐Operate‐Maintain‐Transfer (DBOMT) PPP scheme towards developing 4 of the proposed
mega terminals – Agbara, Berger, Odogunyan and Sango.

On the issue of land acquisition, we are of the view that for all 4 mega terminals, land should be
provided by Government.

Introduction
The preceding chapters have outlined a concept for developing and operationalizing the five
proposed mega terminals. This section presents an analysis to determine the economic and
financial viability of the proposed terminals, and to ultimately identify the best option to
introduce private sector risk‐sharing in the sector. The analysis is achieved with a financial
appraisal model, developed solely to evaluate the terminal development and operations.

This section outlines our analysis, including the methodology adopted, results, and
recommendations. The conclusions inform a practical PSP strategy and accompanying roadmap
for developing the proposed mega terminals.

Chapter 2 (Diagnostic Review), highlighted potential challenges that can be expected when
introducing private sector risk‐sharing into the proposed mega terminals. At a stakeholder
roundtable organized by the Lagos State Government and attended by industry associations,

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private sector companies and potential investors, participants raised the following concerns
with respect to PSP in the development of the proposed mega terminals.

Financial Model Assumptions and Structure

This chapter outlines the financial and economic analysis undertaken on the mega terminals
project to determine its commercial viability. Based on these results we have outlined the
options for Private Sector Participation (PSP) in this project, and the level of Government
investment required to make the project financially viable, as well as undertaken a risk analysis.

The purpose of financial modeling at this stage of project preparation is to provide a strategy
for operationalizing LASG’s overall bus reform agenda and specifically, the development of
mega bus terminals at pre‐determined gateway locations in the LMA with PSP. The aim of this
chapter is to develop practical steps that can be taken to develop the proposed mega bus
terminals.

1. A major challenge to developing mega terminals in Nigeria is the type of financing

available. There is currently asymmetry between the private sector’s payback period
(typically 10 – 15 years)41 and the short‐term nature of financing that is currently
available in the country (usually 5 – 7 years);

2. Enforcement of terminal usage is also a concern. Stakeholders questioned if regulations

would be robustly enforced to ensure patronage at the proposed mega terminal42; and

3. As it currently stands, the scope for commercial development to subsidize terminal

operations is limited given the locations of the proposed terminals.

The above themes would suggest that there is a great deal of complexity regarding the
structuring of State‐sponsored bus terminals in Lagos. This complexity impacts on how the
private sector views the proposed project. However, with Government taking the necessary
steps to address private sector concerns, especially as it relates to regulations and strong
enforcement, we are of the view that there should be scope for meaningful PSP in developing
the proposed terminals.

6.2.1 Model structure

A discounted cash flow model developed in Microsoft Excel was used to undertake the financial
and economic appraisal. The model took into consideration key assumptions that are discussed
in the next section. The model is structured to analyse the commercial viability of all the
terminals jointly or on a terminal‐by‐terminal basis. Part of the model’s outputs are estimates
of Lagos State’s potential financial participation and resulting liabilities for each proposed

41
Based on feedback from Planet Projects during consultations that were held on July 12th, 2018 in Lagos, Nigeria.
42
Based on feedback from Cross Country during consultations that were held on July 12th, 2018 in Lagos, Nigeria.
Specifically, representatives from Cross Country explained the case of Akwa‐Ibom State where a bus terminal was
established six years ago. Bus operators were issued an executive order to move to the terminal, but
unfortunately some operators were given permission to operate in town.

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terminal. The State’s financial participation is driven by risk and return benchmarks43 of the
private sector. The model is designed to generate the investment required from Lagos State in
order for the private sector ROI to meet a minimum threshold expectation.

Model Assumptions
Table 6‐1 outlines the key assumptions that were used to develop the valuation analysis.

6.1.1 Key Model Assumptions

Table 6‐1: Key Model Assumptions

Assumptions Input
Model Currency USD
Start Date January 1, 2019
Construction Period44 1 year
Maximum Modelled Operating Period 18 years
Concession Period 19 years
Current Exchange Rate 360 Naira/USD
Operating Days per Year 295
US Inflation 2.00% per annum
Nigeria Inflation 12.00% per annum
Nigeria Corporate Tax Rate 30%

6.1.2 Capital Costs

Modelled capital costs have been detailed in Section 5.2 of this report.

6.1.3 Working Capital Assumptions

Operational costs have been detailed in Section 5.3 of this report. Table 6‐2 summarizes the
remaining operation cost assumptions reflected in the model.
Table 6‐2: Operating Parameters and Cost Assumptions

Cost Assumption Rate

Accounts Receivable Turnover 30 days
Inventory Turnover 30 days
Accounts Payable Turnover 30 days
Source: CPCS Experience and Industry Research

6.1.4 Financing Costs

Conducting a PSP valuation requires assumptions on financing parameters both from the
perspective of the private and the public sector. These parameters and related assumptions are
summarized in Table 6‐3 and Table 6‐4.

43
These benchmarks are informed by market sounding as well as the Consulting Team’s experience based on prior,
similar mandates.
44
As we are testing PPP schemes with significant risk transfer to the private sector, we are of the view that the
private sector will not waste time developing the necessary infrastructure and will aim to start operations as fast
as possible (to start generating a return). Furthermore, as the infrastructure itself is not highly complex, we believe
that a one year construction period is achievable.

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Table 6‐3: Private Sector Financing Assumptions

Financing Parameter Assumption Commentary

6‐month USD LIBOR Rate Based on a review of current 6‐month LIBOR
2.75% rates from the Federal Reserve Bank of St.
Louis
Private Lending Spread on US 6‐month USD The spread and tenor estimate is based on a
Denominated debt LIBOR + 7.85% review of confidential term sheets (as
Private Lending Tenor on US available) for Build‐Operate‐Transfer type
Denominated debt 15 years transport projects in West Africa in the past
ten years
Private Lending Rate on Naira The Naira denominated lending rate is based
Denominated debt on a review of the June 29, 2018 publication
made by the Central Bank of Nigeria on
23%
lending rates obtainable in all Deposit Money
Banks in Nigeria. The review is specific to
lending rates in “Transportation and Storage”
Private Lending Tenor on Naira 7 years This is based on feedback from the World
Denominated debt Bank
Gearing Assumption 65% ‐ 70% The low‐end estimate (65%) is assumed under
a PPP structure whereby the private sector is
engaged on a Build‐Operate‐Transfer type of
basis, whether it is ‘at‐risk’ or backed by
Government Subsidy

The high‐end estimate (70%) is assumed

under a PPP structure whereby the private
sector is engaged on an O&M concession type
of basis and thus, the private sector’s upfront
capital commitments are limited to items
such as furniture, fixtures and equipment.

Private Sector Leveraged Hurdle 16% to 18% The low‐end estimate (16%) is assumed
Rate (Return on Equity under a PPP structure whereby the private
Benchmark) sector is engaged on an O&M concession
type of basis and thus, the return on equity
benchmarks do not include premiums
related to large private capital outlays

The high‐end estimate (18%) is assumed

under a PPP structure whereby the private
sector is engaged on a Build‐Operate‐Transfer
type of basis and thus, the return on equity
benchmarks include premiums related to
large private capital outlays
Private Sector Unlevered Hurdle 10% ‐ 11% Derived based on above return on equity
Rate (Weighted Average Cost of benchmark and gearing assumptions
Capital Benchmark)
Source: CPCS Experience, Market Consultations and Industry Research

Table 6‐4: Public Sector Financing Assumptions

Financing Parameter Assumption Commentary

Based on a review of current 6‐month LIBOR
6‐month USD LIBOR Rate 2.75% rates from the Federal Reserve Bank of St.
Louis

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Financing Parameter Assumption Commentary

Public Lending Spread on US 6‐month USD This is based on the IBRD Flexible Loan Pricing
Denominated debt LIBOR + 1.50% Basics note (Updated April 2018) and
specifically, the fixed spread loan with an
Public Lending Tenor on US
20 years average repayment maturity of 18 to 20 years
Denominated debt
(see page 2).
The Public Lending Rate on Naira
Central Bank denominated debt is based on a review of the
of Nigeria CBN’s prime lending rate (as at September
Public Lending Rate on Naira (CBN) Prime 2018). Added to this is a 1.40% concessional
Denominated debt Lending Rate premium. Furthermore, it is assumed that
(16.6%) + such a concessional loan would be made
1.40% spread available from the Federal or Lagos State
Government.
Public Lending Tenor on Naira 7 years This is based on feedback from the World
Denominated debt Bank
Source: CPCS Experience, Market Consultations and Industry Research

Naira/USD Exchange Rate Forecast

Noting that the modeled currency is USD while the acquisition currency of capital items is to be
in Naira and USD (see Table 6‐5 for related assumptions), a Naira/USD exchange rate forecast is
required to account for exchange rate gains and losses as part of debt servicing. Or Naira/USD
forecast is provided in Table 6‐6.
Table 6‐5: Acquisition Currency for Capital Outlay Items

Capital Outlay Item Currency of Acquisition

Mega Terminal Infrastructure including Pre‐ USD

operating Expenses

Infrastructure for Commercial Development USD

(Building Core & Shell)

Land Acquisition NGN

Terminal Furniture, Fixtures and Equipment NGN

Source: CPCS Estimate

Table 6‐6: Naira/USD Exchange Rate Forecast

Year Naira/USD Forecast

2019 370

2020 385

2021 onward 390

Source: Trading Economics Nigerian Naira Forecast (reviewed on October 22, 2018)

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6.1.5 Revenue from Mega Terminal Operations

Access Charge Revenues

The estimate of access charge revenues is discussed in Section 5.4. The results are presented
again in Table 6‐7 and Table 6‐8. We have adopted a 2% yearly escalation on quoted tariffs
(in line with US Dollar currency inflation). Note that the 2.0% charge per the table below
forms the base case in our analysis with the 1.0% informing a sensitivity analysis with
resulting implications.
Table 6‐7: Terminal Access Charge Estimate (Naira)

Vehicle Type Terminal Access Charge Terminal Access Charge

(2.0% of Passenger Trip (1.0% of Passenger Trip
Costs) – Base Case Costs) – Sensitivity Case
Interstate Minibus 1,500 750
Interstate Luxury Bus 6,000 3,000
Marco Polo High Capacity 4,363 2,181
Bus
Marco Polo High Capacity 3,444 1,722
Bus
Source: CPCS Estimate

Table 6‐8: Terminal Access Charge Estimate (USD)1

Vehicle Type Terminal Access Charge Terminal Access Charge

(2.0% of Passenger Trip (1.0% of Passenger Trip
Costs) – Base Case Costs) – Sensitivity Case
Interstate Minibus 4.17 2.08
Interstate Luxury Bus 16.67 8.33
Marco Polo High Capacity
12.12 6.06
Bus
Marco Polo High Capacity
9.57 4.78
Bus
1. Assumes a 360 Naira/USD exchange rate
Source: CPCS Estimate

Lease of Areas for Transit Ticket Sales

Table 6‐9 summarizes the annual lease charges that can be collected from vendors selling transit
tickets. It should be noted that per m2 rental estimates are based on commercial rents currently
charged in the location of the terminals which were gathered from market consultations.
Furthermore, it is assumed that lease rates will increase by 2% per annum (adopting US Dollar
currency inflation).
Table 6‐9: Lease Estimate for Transit Ticket Sales at Terminals

Dedicated Annual Rent % of Dedicated Area Annual Rental Annual Rental

Area m2 per m2 (N) that is Leasable Yields (NGN) Yields (US 000)

Agbara 500.00 6,000 50.0% 1,500,000 4

Berger 1800.00 9,000 75.0% 12,150,000 34
Epe 500.00 6,000 50.0% 1,500,000 4

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Dedicated Annual Rent % of Dedicated Area Annual Rental Annual Rental

Area m2 per m2 (N) that is Leasable Yields (NGN) Yields (US 000)

Odogunyan 500.00 6,000 50.0% 1,500,000 4

Sango 500.00 6,000 50.0% 1,500,000 4
Source: CPCS Estimate based on Market Consultations

Lease of Faciliites for Stabling, Cleaning and Maintaining Lagos State Buses
Table 6‐10 summarizes the annual lease charges that can be collected from leasing facilities
within the terminals for stabling, cleaning and maintaining Lagos State buses. It should be noted
that per m2 rental estimates are based on commercial rents currently charged in the location
of the terminals which were gathered from market consultations.
Table 6‐10: Lease Estimate for Stabling, Cleaning and Maintaining Lagos State Buses at Terminals

Leases: Dedicated Area Annual % of Annual Annual

m2 Rent per Dedicated Rental Yields Rental
m2 (N) Area that is (NGN) Yields (US
Leasable 000)
Agbara 900.00 6,000 100.0% 5,400,000 15
Berger 2000.00 9,000 100.0% 18,000,000 50
Epe 900.00 6,000 100.0% 5,400,000 15
Odogunyan 900.00 6,000 100.0% 5,400,000 15
Sango 900.00 6,000 100.0% 5,400,000 15
Source: CPCS Estimate based on Market Consultations

We have modelled a 2% lease escalation per year in the model in‐line with inflation of the
modelled currency (US$).

Lease Revenues from Commercial Activities

Table 6‐11 summarizes the areas designated for commercial development and related leasing
revenues. Such commercial activities include shopping malls, office space, and hotel
accommodation. We note that typically, the owner‐operator of the mega terminals would offer
basic “core & shell” space to tenants for various commercial use. Prospective tenants would
then further develop the space for their own needs (for example, a shopping mall tenant would
fit his/her space according to the specifications of a shopping mall) and pay a lease fee (per m2)
to the owner‐operator of the mega terminals.
Table 6‐11: Lease Estimate from Commercial Development and Related Activities

Leases: Dedicated Area Annual % of Annual Annual

m2 Rent per Dedicated Rental Yields Rental
m2 (N) Area that is (NGN) Yields (US
Leasable1 000)
Agbara 500.00 6,000 80.0% 2,400,000 7
Berger 1,800.00 9,000 80.0% 12,960,000 36
Epe 500.00 6,000 80.0% 5,400,000 7

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Leases: Dedicated Area Annual % of Annual Annual

m2 Rent per Dedicated Rental Yields Rental
m2 (N) Area that is (NGN) Yields (US
Leasable1 000)
Odogunyan 500.00 6,000 80.0% 2,400,000 7
Sango 500.00 6,000 80.0% 2,400,000 7
1. 20% accounts for circulation space
Source: CPCS Estimate based on Market Consultations

We have modelled a 2% lease escalation per year in the model in‐line with inflation of the
modelled currency (US$).

Revenues from Overnight Parking

As outlined in Section 4.2, there are provisions for Lagos State buses to park their buses when
not in revenue service (e.g., overnight parking of buses). Table 6‐12 gives the number of parking
bays available for buses that are not in revenue service.
Table 6‐12: Lagos State Parking Bays for Buses not in Service

Terminal Parking Spots required for Buses

not in Revenue Service
Agbara 43
Berger 232
Epe 31
Odogunyan 57
Sango 65
Source: CPCS Analysis

Parking fees can be charged for those bus operators wishing to park their buses for extended
periods of time when not in service. Table 6‐13 summarizes our parking fee estimates.
Table 6‐13: Lagos State Bus Parking Fee

Currency Rate per Day (for the

Base Year 2018)
Naira 5,000
US 13.89
Source: CPCS Estimate

The total parking revenue to be collected depends on the utilization rate of the parking bays.
For all terminals, we have assumed that utilization at the start of operations will be 75% and
grow to 95% by the end of the operating period (growing at approximately 1.2% per year).

We have modelled a 2% parking fee escalation per year in the model in‐line with inflation of the
modelled currency (USD).

Economic Analysis
A high level economic assessment of the project was undertaken. While the financial analysis
focuses on the financial costs and revenues of the project (i.e. those which affect the project

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cash flow), the economic analysis focusses on the wider economic costs and benefits. These are
non‐financial benefits and many of them are not realized in cash terms. The economic appraisal
was based on international best practice, using a standard approach normally applied by the
World Bank and other multi‐lateral institutions.

While the primary economic benefit delivered by this project will be in terms of time savings to
both existing and new road users, our analysis have also assessed other social benefits that the
project will deliver including increase in employment and an increase in rental incomes and land
values in the areas adjoining the mega terminals. All these benefits can justify any public
investment (i.e. subsidy) that is required for the project.

The economic appraisal consists of the following elements:

 Economic costs – capital and operating costs

 Economic benefits

 Economic assessment parameters – ENPV and EIRR

6.2.1 Social Discount Rate

The choice of an appropriate Social Discount Rate (SDR) for use in an economic analysis can be
quite controversial, as it can have a significant impact on the results. Unlike the financial
discount rate, which reflects the opportunity cost of capital, the economic discount rate (or
social discount rate) should reflect how society values current costs and benefits versus future
costs and benefits.

There are significant variations in public discount rate policies practiced by countries around the
world, with developing countries in general applying higher SDRs (8%‐15%) than developed
countries (3%‐7%). The divergence reflects differences in the perceived social opportunity cost
of public funds across countries and in the extent to which the issue of intergenerational equity
is taken into consideration in setting the SDR.

Up to 2015 the Nigerian economy grew at a steady rate of 6%‐7% per annum. After the
economic downturn in 2015, the GDP growth rates fell and are now expected to grow at around
2% per annum. However, economic appraisal of projects in developing countries are normally
undertaken using a SDR of 12%, and hence this is the value we have used for this analysis.

6.2.2 Economic Costs

The financial costs (as described in Chapter 5) consist of capital and operating costs. These have
been adjusted to reflect their actual economic value (i.e. the social opportunity cost of the
resources), rather than their market price. Markets often incorporate significant price
distortions created, for example, by market barriers (e.g. tariffs or subsidies), social policies (e.g.
minimum wages) or simply due to market imperfection, macroeconomic unbalances or rigidities
(e.g. wage rigidities); these distortions have been removed where encountered. Financial
estimates are transformed into economic values by applying appropriate conversion factors.

For the purpose of this high‐level analysis, a uniform conversion factor of 0.9 has been applied
to all financial costs (both capital and operating costs) to arrive at the economic costs.

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6.2.3 Economic Benefits

One of the main justifications for this project is to reduce the traffic congestion caused by having
numerous bus parks in the centre of the LMA, which are served by private cars, Danfos and city
buses. Moving these bus parks out of the centre of Lagos will significantly improve travel times
for other road users. The following economic (non‐financial) benefits have been estimated for
this project:

 Journey time savings;

 Employment benefits; and
 Increase in rental income.

Journey Time Savings

The principal benefit from this project will be the reduction in congestion in the LMA, resulting
in faster journey times for existing and future road users. There could potentially also be journey
time savings for interstate bus passengers, as an efficient and well organized bus terminal will
deliver more reliable services as well as reductions in transfer and interchange times. However,
passengers will now have to travel longer distances to reach the mega terminals located at the
outer edge of the LMA.

Journey time savings were derived using a typical Four Step Model (FSM) approach. The four
model steps were: (i) define system demand (total daily number of vehicles), (ii) system capacity
(daily number of vehicles that can accommodated by a road segment of a particular road class,
number of lanes and grade), (iii) allocate system demand via network flow modelling, and (iv)
calculation of congestion expressed in terms of a Volume to Capacity Ratio (VCR) and theoretical
travel times.

Traffic volumes in the roads around the existing bus parks were taken from the Origin‐
Destination (O‐D) matrices from the following studies:

 Private Vehicle Trips within the LMA: ALG. Europraxis., 2014. Consultancy Services for
the Extension of the STMP and STDM to Cover Mega City Region

 Intra City Public Transit within the LMA: ALG. Europraxis., 2014. Consultancy Services for
the Extension of the STMP and STDM to Cover Mega City Region

 Inter State Bus Movements: CPCS, 2018. Current ISBT park count survey and interviews
carried out in May‐June 2018

 Heavy Commercial Vehicles Movements: Cambridge Systematics Inc., 2016. Lagos

Region Freight Demand Study: Final Study Report, LAMATA

 Truck queues (Number of parked heavy commercial vehicles vying for access at Apapa
and Tin Can Island Ports): CPCS, 2018. Truck queue survey and interviews carried out in
May‐June 2018

These covered all vehicle types including cars, local buses, Danfos, trucks, and other vehicles.
Based on the road types, existing VCRs were estimated for the roads near each of the bus park
locations.

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It was assumed that currently 60% of the total daily trips to the bus parks were by private
vehicles and 40% of the trips were by intra city buses. With the development of the mega
terminals, it was assumed that traffic currently servicing the bus parks would now not go the
mega terminals. This would significantly reduce the level of traffic congestion around the bus
parks, increasing journey times for all road users. Based on the new levels of traffic, VCRs were
re‐estimated, giving us the percentage change in congestion levels (i.e. VCRs) at each location.

Research in the UK has shown that elasticity of travel volume with respect to travel time ranges
between 0.5 and 1.045. An elasticity of 1 implies that in the long term a 10% reduction in volume
on traffic on the roads (i.e. congestion), results in a 10% reduction in travel times. Given that
the roads around the bus parks in Lagos are extremely congested and have a severe impact on
traffic in the adjoining area, we believe that a reduction in congestion will have a high impact
on journey time. Hence, we have assumed an elasticity of 1.

At each of the bus park locations it was therefore assumes that journey times will reduce in the
same proportion as the reduction in congestion (i.e. VCRs). The Value of Time Study undertaken
for LAMATA in 201546 estimated a Value of Time of N1,097 per hour per car in the Lagos CBD.
This value was taken as a proxy to cover all vehicle types and was updated to 2018 values.
Multiplying the value of time with the total journey time saved by all vehicles, gives us the
annual value of journey time savings.

Employment Benefits
The project will generate two types of employment: one is that which will be directly required
for the operation of ferry service and associated facilities; and the other which will be induced
in the broader economy because of the various activities that will be effected by the investment
in the sector. There will also be a slight reduction in employment as the existing bus parks close.
However it is assumed that the new mega terminals will create sufficient jobs to overcome these
job losses.

A report by the African Development Bank on job creation in Nigeria47 estimates an employment
multiplier of 5.8 for the transport sector in Nigeria. This means that for every 1 job created in
the transport sector, a further 4.8 jobs will be created in the wider economy.

A fully operational ferry service on the designated route is expected to create around 850‐900
jobs in total, which will increase as the service expands. Applying the transport sector
employment multiplier gives us an estimate of the total number of jobs created in the wider
economy. Based on an average wage rate, we estimate the additional income generated in the
economy due to these jobs, which is taken as an estimate of the total economic benefits
generated by the project.

Increase in Rental Income

Investment in the transport sector can have a significant impact on property values and rental
incomes in the vicinity of transport facilities. In 2013, the New York City Economic Development

45
Understanding Transport Demands and Elasticities, Victoria Transport Policy Institute, February 2017.
http://www.vtpi.org/elasticities.pdf
46
Value of Time and Transport Elasticity Study, Final Report, Leigh Fisher, LAMATA, May 2015
47
The Challenge of Job Creation in Nigeria, Africa Economic Brief, African Development Bank, June 2015

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Corporation (NYEDC) released its Citywide Ferry Study48 which aimed to provide policymakers
an increased understanding of the economic impacts of ferry services, among other things. The
study analyzed over 50 sites, resulting from its commuter and leisure routes in all five (5)
boroughs of the City. The study reports that residential property values within 1/8 mile (0.20
km)of East River Ferry stops in Brooklyn and Queens increased 8.0% over comparable property
values further from the stops. Without comparable data from Nigeria and other similar
economies, we have assumed that the same principles can be applied to the bus mega terminals
as well.

Based on our field research, we were able to determine the average rents of properties in the
vicinity of the proposed mega terminals. Our field observations suggested that about 50% of the
area within 1/8th of a mile (0.20 km) from each mega terminal had rental properties. Given the
current level of rental values in Lagos, it was assumed that the mega terminal developments
would result in a 25% increase in property rents (both commercial and residential). This increase
in rental values was considered a benefit to the wider economy.

It should be noted that there may also be a small drop in the rental incomes in the areas around
the existing bus parks, but we believe that this loss will not be significant and will be more than
made up by increases in rental incomes around the new mega terminals. Hence these losses
have not been considered.

6.2.4 Economic Assessment

Based on the economic costs and benefits, and applying a 12% SDR, the economic appraisal
results for each mega terminal, as well as for all terminals combined, are presented inTable
6‐14.
Table 6‐14: Economic Appraisal Results

Mega Terminal ENPV (USD 000) EIRR

Agbara ‐5,915 ‐1.9%
Berger 48,636 24.9%
Epe 1,549 15.9%
Odogunyan 25,976 52.7%
Sango ‐11,044 ‐8.1%
All Terminals 16,641 14.8%

The project as a whole (i.e. for all terminals combined) delivers a positive Economic NPV and an
EIRR of close to 15%, and therefore is considered viable from an economic perspective.
However, when we look at individual terminals, we find that Agbara and Sango are economically
unviable, even though they deliver significant economic benefits. This is mainly due to the cost
of land acquisition. The other 3 locations are economically viable, with Odogunyan delivering
the highest EIRR of over 52%.

48

https://www.nycedc.com/sites/default/files/filemanager/Resources/Studies/2013_Citywide_Ferry_Study/Citywi
de_Ferry_Study_‐_Final_Report.pdf

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Financial Analysis

6.3.1 Operating Ratio

To inform the level of financial participation from both the public and the private sectors to
make the mega terminals project viable, an important first step is to analyze the operating ratio
of each terminal. The operating ratio is defined as a company’s operating expenses as a
percentage of revenue. It determines how much of terminal revenues cover operating costs
(staff, cleaning and security, terminal maintenance, etc.). The lower the operating ratio (usually
expressed as a percentage), the better the financial performance. The operating ratio (operating
costs/terminal revenues) informs the following:

1. If the operating ratio is greater than 100%, a level of operational subsidies that may be
required to be paid by Government to the terminal operator; and

2. If the operating ratio is less than 100%, there is potential for (1) the terminal operator
to pay a concession fee to Government, and/or (2) the terminal operator to pay for some
or all of the capital outlays (e.g., land acquisition, terminal development, etc.).
Figure 6‐1: Operating Ratio Summary per Mega Terminal

Epe, 15.88%

Sango, 9.48% Agbara, 9.85%

Operating Ratio

Epe, 7.17%

Odogunyan, 7.65%

Sango, 3.58%
Berger, 6.39% Agbara, 4.31%

Odogunyan, 4.00%

Berger, 2.39%

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037

Source: CPCS Analysis

Figure 6‐1 summarizes the operating ratio per mega terminal over the forecast period. In all
cases, terminal revenues sufficiently cover operating costs. Of the 5 terminals, Berger,
Odogunyan and Sango deliver the best operating ratios. Furthermore, under the assumption
that higher capacity passenger vehicles will replace lower capacity passenger vehicles over time

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(see Table 4‐1 for more information), total terminal access revenues are expected to grow faster
than operating costs over time, thereby reducing the operating ratio. Two insights are drawn
from the above analysis:

1. An operational subsidy would not be required to sustain operations at each of the

terminals; and

2. Given that operating income is positive across all terminals, there may be a case for the
private sector to financially participate in developing the terminals. This is further tested
in Section 6.3.2.

6.3.2 Unlevered Financial Analysis

With the understanding that operations can be sustained by terminal revenues, the unlevered
financial analysis seeks to understand the level of upfront financial participation between the
public and private sectors for each of the proposed bus terminals. The unlevered financial
analysis tests if cash flows (internally generated) from each of the proposed terminals are
sufficient to provide a reasonable rate of return, prior to considering the following financial
structuring issues:

1. Government’s upfront subsidy and recurring financial participation in the project;

2. Commercial debt; and

3. Duration of the PSP.

What constitutes a reasonable level of return depends on who is making the investment (in this
case, Government or the private sector) and if the return thresholds meet objective investment
criteria and standards. For the purposes of this analysis, the return threshold is set at 10% (in
US Dollar terms).

The goal of this analysis is to derive the project cash flows over the forecast period. The cash
flows are calculated using a build‐up approach. The steps taken to derive the cash flows are as
follows:

1. Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) is

calculated for each year of the forecast period;

2. Earnings before Interest and Taxes (EBIT) is calculated by deducting depreciation

from each year’s operating profit or loss;

3. Utilizing the EBIT figure, corporate taxes are calculated for each year in the
forecast period. The total of corporate taxes are summed in order to reduce
EBITDA commensurately for each period;

4. Changes in Working Capital are added back to EBITDA;

5. Capital Investment is deducted from EBITDA;

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6. The Terminal value49 (only applies for the final year of the forecast period) is
added back to the respective EBITDA figure; and

7. A yearly cash flow figure is derived based on the above steps. The

results of each of the unlevered financial analysis undertaken for each of the mega terminals is
given in Figure 6‐2 to Figure 6‐6.

49
The Terminal Value represents all cash flows that occur so far into the future (i.e. following the project period)
that it would not be practical to forecast them. For the purposes of this analysis, the Terminal Value represents the
value of the project at the end of the project period and is estimated as the net book value of assets.

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Figure 6‐2: Unlevered Cash Flow Summary for Agbara

Source: CPCS

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Figure 6‐3: Unlevered Cash Flow Summary for Berger

Source: CPCS

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Figure 6‐4: Unlevered Cash Flow Summary for Epe

Source: CPCS

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Figure 6‐5: Unlevered Cash Flow Summary for Odogunyan

Source: CPCS

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Figure 6‐6: Unlevered Cash Flow Summary for Sango

Source: CPCS

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Table 6‐15: Unlevered Valuation Summary per Terminal

Net Present Value Net Present Value

Terminal
with (USD 000) with (Naira 000)

Agbara 2,846 1,024,560

Berger 14,750 5,310,000

Epe ‐777 ‐279,720

Odogunyan 4,607 1,658,520

Sango 4,755 1,711,800

Source: CPCS

Table 6‐15 summarizes the unlevered cash flow profile and net present value per terminal.
Except for the proposed mega terminal at Epe, all other terminals generate sufficient terminal
access and leasing revenues to cover capital (including land acquisition) and operating costs.

As a caveat, it should be noted that the unlevered analysis does assume an indefinite project
period (and hence, the terminal value assumption per footnote 49). As a PPP contract is for a
finite period, an important consideration will be how to handle asset handover at the end of the
PPP contracting period and how the potential private partner could be compensated. This is
discussed in Section 6.4.

6.3.3 Unlevered Financial Analysis Sensitivity

In Section 5.4 we noted that, (1) passengers would ultimately bare the terminal access charge
and (2), we estimated that passengers could bare an access charge that was between 1.0% and
2.0% of their respective transport tariff.

The results in Table 6‐15 are based on an access charge that is 2.0% of estimated passenger
transport tariffs (see Section 5.4 for more information). Table 6‐16 provides a sensitivity of the
unlevered NPV of each proposed terminal based on an access charge of 1.0% and 1.5% of the
transport tariff.

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Table 6‐16: Unlevered NPV Sensitivity Analysis Summary

Terminal Currency NPV (2.0%) NPV (1.5%) NPV (1.0%)

Agbara US 000 2,846 476 ‐1,894

Naira 000 1,024,560 171,360 ‐681,840

Berger US 000 14,750 947 ‐12,857

Naira 000 5,310,000 340,920 ‐4,628,520

Epe US 000 ‐777 ‐1,915 ‐3,058

Naira 000 ‐279,720 ‐689,400 ‐1,100,880

Odogunyan US 000 4,607 1,759 ‐1,089

Naira 000 1,658,520 633,240 ‐392,040

Sango US 000 4,755 1,332 ‐2,091

Naira 000 1,711,800 479,520 ‐752,760

Source: CPCS

What is immediately apparent is that the unlevered project NPV is fairly sensitive to the access
charges. Though Epe is the only terminal that has a negative NPV at both 2.0% and 1.5% of the
transport tariff, at 1.0%, all the terminals have a negative NPV.

In light of this sensitivity, and noting LAMATA’s vision of developing these terminals as a PPP
(specifically, under a Build‐Operate‐Transfer scheme where Government provides the land), the
Table 6‐17 recasts the sensitivity analysis conducted above excluding land acquisition as a
project cost.
Table 6‐17: Unlevered NPV Sensitivity Analysis Summary (excluding land acquisition)

Terminal Currency NPV (2.0%) NPV (1.5%) NPV (1.0%)

Agbara US 000 3,286 916 ‐1,454

Naira 000 1,182,960 329,760 ‐523,440

Berger US 000 32,066 18,263 4,459

Naira 000 11,543,760 6,574,680 1,605,240

Epe US 000 ‐415 ‐1,553 ‐2,696

Naira 000 ‐149400 ‐559,080 ‐970,560

Odogunyan US 000 5,249 2,401 ‐447

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Terminal Currency NPV (2.0%) NPV (1.5%) NPV (1.0%)

Naira 000 1,889,640 864,360 ‐160,920

Sango US 000 5,816 2,393 ‐1,030

Naira 000 2,093,760 861,480 ‐370,800

Source: CPCS

With land acquisition costs removed from the project, the unlevered NPV improves across all
access charge scenarios. At 1.0%, the proposed Berger Terminal exhibits a positive NPV whereas
in the case of the private sector acquiring the land, at 1.0%, the NPV is negative.

Introducing Private Sector Participation in Mega Terminal

Based on the results of the unlevered analysis, we recommend that the private sector be
engaged in a Design‐Build‐Operate‐Maintain‐Transfer (DBOMT) PPP scheme towards
developing 4 of the proposed mega terminals – Agbara, Berger, Odogunyan and Sango.
Furthermore, based on the results in the preceding section, we are also of the view that the
private sector can take up revenue risk. However, this is predicated on Government developing
regulation with strong enforcement towards ensuring that all commercial buses use the mega
terminals. Without regulation and evidence of enforcement, engaging the private sector in such
a PPP scheme will not be viable as evidenced in the outcomes of the roundtable organized by
the Lagos State Government on July 27th, 2018.

The Federal Government, for instance, has been able to enforce regulations to ensure that all
visitors to the Murtala Muhammed Airport and Domestic Airport terminals utilize the on‐site
parking facility and pay the N500 access charge. This enforcement has successfully supported
the financing and operation of the parking sites at the terminals. Finally, a contract duration of
11‐16 years50 (renewable) should be considered.

Based on these recommendations, Table 6‐18 and Table 6‐19 summarize, under a DBOMT
scheme, Government’s expected annual concession fees and the present value of Government’s
total financial contribution (net of concession fees) over an assumed contract duration of 16
years. Concession fees (gap funding) is based on the private sector’s leverage rate of 65% and
an equity hurdle rate of 18%. It should also be noted that in the below analysis, a terminal value
(reflected as a cash inflow to the private operator at the end of the final year of operations) is
not assumed.

50
Assuming a one year construction period, the operating period would be between 10 and 15 years.

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Table 6‐18: Summary of Annual Concession Fees (Gap Funding) and Government’s Financial Contribution (US$ 000)

Scenario One – Government Provides Land Scenario Two – Private Sector Acquires Land

Annual Concession Fee (+) / Present Value of Annual Concession Fee (+) / Present Value of
Terminal Gap Funding (‐) Estimate Government’s Financial Gap Funding (‐) Estimate Government’s Financial
Contribution (i.e. Land Contribution Discounted at
Acquisition net of Concession 10%
Fees) Discounted at 10%
Agbara +92 +99 ‐16 ‐113
Berger +2,547 ‐3,505 ‐1,815 ‐12,551
Epe ‐315 ‐2,617 ‐411 ‐2,839
Odogunyan +360 +1,703 +202 +1,394
Sango +601 +274 ‐13 ‐89
Total 3,285 ‐4,046 ‐2,053 ‐14,198
Source: CPCS

Table 6‐19: Summary of Annual Concession Fees (Gap Funding) and Government’s Financial Contribution (US$ 000)

Scenario One – Government Provides Land Scenario Two – Private Sector Acquires Land

Annual Concession Fee / (Gap Present Value of Annual Concession Fee / (Gap Present Value of
Terminal Funding) Estimate Government’s Financial Funding) Estimate Government’s Financial
Contribution (net of Contribution (net of
Concession Fees) Discounted Concession Fees) Discounted
at 10% at 10%
Agbara 33,120 35,640 ‐5,760 ‐40,680
Berger 916,920 ‐1,261,800 ‐653,400 ‐4,518,360
Epe ‐113,400 ‐942,120 ‐147960 ‐1,022,040
Odogunyan 129,600 613,080 72,720 501,840
Sango 216,360 98,640 ‐4680 ‐32,040
1,182,600 ‐1,456,560 ‐739,080 ‐5,111,280
Source: CPCS

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Based on the results outlined in Table 6‐18 and Table 6‐19, the following conclusions can be
made:

6.4.1 PSP Conclusion

Based on the above tables, the following conclusions can be made:

1. Similar to the unlevered results in Section 6.3.2, the proposed mega terminal at Epe
would not be viable even with a combination of (1) Government providing land and/or
(2) gap funding. The major driver for this is that relative to other terminals, the Epe
Terminal exhibits lower vehicle traffic per our traffic estimates. Thus, Epe should not be
considered for a DBOMT PPP scheme (with significant risk transfer to the private sector)
until the potential for traffic improves.

2. Without an assumed terminal value at the end of the PPP contract period, gap funding
is required for the proposed terminals at Agbara, Berger and Sango in the case where
the private sector acquires the related land. Though we recommend that Government
provide the land as envisaged by LAMATA, there are a number of ways to minimize gap
funding in the absence of providing a potential private partner with a final cash flow
(funded by Government) that represents a terminal value (should the private partner
acquire the land):

a. The PPP contracting period could be extended to the point where gap funding is
not required. However, this may be viewed as politically unviable.

b. The PPP contract can be made renewable as another means of extending the
contracting period though there would still be an issue of final compensation
should the PPP contract not be renewed. To address this, a related clause could
be placed in the contract such that any upfront fees that are received from the
concessionaire that is to take over the mega terminal is paid directly to the
previous concessionaire. With the infrastructure already and place, and a
business case for mega terminals already developed, we are of the view that
upfront fees are viable in a subsequent concessioning exercise.

On the issue of land acquisition, we are of the view that for all four mega terminals, land should
be provided by Government. Not only would this confirm the seriousness of Government’s
desire to develop these proposed mega terminals, it would alleviate pressures on the local
capital markets’ ability to privately finance a fairly significant Naira‐based acquisition (estimated
at over N9.3 billion).

With Government acquiring the land, there are mechanisms for recouping some or all of these
costs as land value uplift materializes from the development of mega terminals. Below are some
examples that could be used in combination to recoup such upfront costs:

 Government could collect a royalty from the commercial development component of

the mega terminals. The royalty would be based on the difference between current
commercial lease rates and any rate increases should land value uplift materializes; and
 Impose a levy on further commercial developments within a given radius (e.g., 20 km)
following the development of mega terminals. The assumption here is that should land

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value uplift materialize from the development of mega terminals, this will spur further
developments around the mega terminals.

Next Steps
Following on from our recommendation that the LASG take forward the development of the
terminals on a PSP basis (accept for the proposed terminal at Epe which should be developed
at this stage given the economics of the project), the following are next steps that need to be
pursued.

1. As an immediate priority, Government should start consulting with private bus operators
and their unions, explaining to them the mega bus terminals initiative, and how this will
be of benefit to them. The economic analysis confirms the social benefits of the project,
particularly around alleviation of congestion in the LMA. LASG must stress to existing bus
terminal operators that they would be permitted to participate in the transactions, and
that all bus operators would have access to the facilities. The operators must also be
briefed on the regulation and enforcement that will be part of the project
implementation. The importance of the mega terminals to the bus reform program and
alleviating congestion in LMA needs to be clearly communicated to bus operators and
other stakeholders who are likely to resist this initiative. Early engagement with all
stakeholders will minimize resistance to the mega terminals after they are developed. It
will also allow bus operators to start planning their future business in line with the mega
terminals initiative.

2. The initiative should be well publicized, through newspaper, radio and television
advertisements. The main purpose of this will be to convey to the domestic and
international investor community the seriousness of Government in developing the
terminals with PSP. The current experience of developing such bus terminals in Nigeria
is mixed. In Port Harcourt, a bus terminals was developed but the required regulations
were only loosely enforced. Hence it is important to convey to investors how serious the
Government is about properly implementing this project.

3. Commence detailed and targeted market sounding once (1) and (2) are sufficiently
underway to confirm interest in a DBOMT model. Targeted market sounding should be
formalized and structured towards gaining valuable and focused feedback from the
private sector. Newspaper, television and/or radio advertisements can be used to inform
interested parties of the market sounding event. Government should be prepared to
present information in the following areas during the event:

a. General guidelines of the access charge regime as discussed in Section 5.4;

b. The strong desire to marry terminal development with commercial development;
c. Government will provide the land (as necessary).

At the market sounding event(s), Government should seek information in the following
areas:

a. Ranking of terminals in terms of commercial attractiveness;

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b. Anticipated terminal configurations;

c. How the private sector would exploit the anticipated commercial potential at
each terminal; and
d. Any other viability or bankability issues.

Potential interested parties that should be targeted for this market sounding event
include ABC Transport, Planet Projects, Neon Andani, SIFAX Group, Primero Transport
Services Limited and GIG Group.

4. Secure public funding for land acquisition (as necessary).

5. For those terminals where there is strong interest, prepare tender documents towards
a DBMOT type of PPP with revenue risk transferred to the private sector. The following
need to be considered in the bid.

a. Bidders should state the access charges they will propose and should be scored
accordingly (with those proposing lower charges scoring higher);

b. As far as possible, commercial developments should seek to minimize the level

of access charges required to maintain a reasonable project payback period and
rate of return. As such, commercial developments as part of bidders’ terminal
business plans should be requested and evaluated; and

c. There should be a mechanism where the private sector is able to collect penalties
from Government should regulations not be sufficiently enforced (the onus
would be on the private sector to objectively prove that this has been the case).
Though we do not envisage penalties ever being paid, given how serious LASG is
about regulation and enforcement, it would add a degree of comfort and
increase the attractiveness to those bidding for this project.

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Risk Analysis
The project is heavily dependent and linked with a successful implementation and interface with
LAMATA’s bus reform programme. Table 6‐20 highlights the key risks on the bus terminal
projects and the potential risk allocation assuming some form of BOT type of arrangement for
illustration.

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Table 6‐20: Bus Terminal Project Risk Matrix

No Risk Heading Definition Public Private Shared Ability to Transfer Risk

Sector Sector

1 Design Risk

1.1 Failure to adequately specify the Employer’s requirements not accurately * No

employer’s requirements translated into Tender Documents

1.2 Continuing development of The detail of the design should be developed * Yes, through Contract
design/design work not being within an agreed framework and timetable.
completed on time Failure to do so may lead to additional design
and construction costs.

1.3 Change in design requirements by the The Government and(or) the bus terminal *
Government and (or) the bus terminal operator may require changes to the design,
operator leading to additional design costs

1.4 Failure to build to brief Misinterpretation of design or failure to build to * Yes, through the Contract, careful
specification during construction could lead to development of the project brief and
additional design and construction costs ongoing liaison between the
Government’s agent, Operator’s agent
and the Contractor’s designer will help
remove the possibility of
misinterpretation of the construction
requirements

1.5 Governments’ concession programme The speed of the Governments’ programme * This can be eliminated through adequate
(Political expediency) leading to design inadequacies if Contractors are allocation of time and avoidance of delay
required to undertake the completion of the at the initial stages and consideration of

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No Risk Heading Definition Public Private Shared Ability to Transfer Risk

Sector Sector

works within a timescale that is unreasonable or the use of Early Contractor Involvement
shortened (ECI)

1.6 Inaccurate traffic forecasts Inaccurate traffic forecasts may result in an * The Annual Availability payments will
inaccurate design/resourcing/operating plan insulate the operator of traffic
fluctuations, but will be linked to
performance standards

1.7 Inadequate liaison with stakeholders Inadequate liaison may lead to third party * Yes, through the contract
requirements or accommodation works being
omitted from the employer’s requirements

1.8 Service objectives not met Objectives set forth by the service may not be * No, but can minimise through careful
met at satisfactory levels development of service proposals

1.9 Data availability Information coming from the Government and * Make early contact with all parties; Be
their other key stakeholders might be slow prepared to adjust presentation to
address shortcomings

1.10 Tender Capacity There may be lack of tender capacity, or * No

collusion between tenders which may cause an
annulment of the tender and time delays in the
tender process

1.11 Construction Costs Cost estimates to be based on preliminary * Conduct peer reviews or independent
design which would not be adequate engineer reviews

1.12 Substandard design The design may have shortfalls in terms of * Conduct peer reviews or independent
adequate engineering principles and its engineer reviews
addressing of problem areas with cost effective
engineering solutions

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No Risk Heading Definition Public Private Shared Ability to Transfer Risk

Sector Sector

2 Construction and Development Risks

2.1 Incorrect time estimate The time taken to complete the construction * Yes, ensure estimate is reasonable and
phase may be different from the estimated one control through the Contract

2.2 Delay in gaining access to the site A delay in gaining access to the site may delay * No, but can be minimised through
the entire project (land Acquisition planning & project management
effective implementation)

2.3 Access to land not available for Access to land for verification surveys or * No, but can be minimised through careful
construction construction of the permanent works may not forward planning
be available to the whole of the site by the
Contract starting date.

2.4 Poor coordination with other works Interference from other third party works may * No, but can be minimise through project
lead to a delay in starting some elements of the management and careful liaison
permanent works

2.5 “Compensation events” An event of this kind may delay or impede the * No, but can be minimise through
performance of the contract and cause Contract and project management
additional expense

2.6 Force Majeure In the event of Force Majeure, additional costs * No

will be incurred

2.7 Contractor Default In the case of contractor default, additional * Yes, through Contract compensation to
costs may be incurred in appointing a the Employer can be defined
replacement, and may cause delay

2.8 Poor project management There may be a risk that poor project * No but can minimise through careful
management will lead to additional costs selection of project management

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No Risk Heading Definition Public Private Shared Ability to Transfer Risk

Sector Sector

2.9 Contractor/sub‐contractor industrial Industrial action may cause the project to be * No, but can minimise through careful
action delayed as well as incurring additional election of reputable contractor and
management costs could seek to recover any costs incurred

2.10 Key subcontractor becomes bankrupt Bankruptcy of a key contractor may lead to a * Costs associated with appointing a
delay until a replacement sub‐contractor can be replacement will be borne by the
appointed principal EPC Contractor; Delay damages
will be repaid to the Employer in the
event of the works overrunning the
allocated time

2.11 Abnormal weather conditions Excessive periods of inclement weather are * The risk can be transferred with onerous
normally considered to be compensation events Conditions of Contract but this may lead
to higher than anticipated tender prices;
Can seek Insurance against such
conditions

2.12 Availability of terminal design There may be difficulties in obtaining * Minimum Specifications to be proposed
meeting minimum specifications and customized design or proprietary materials in generic terms so as to enable both
other material supply difficulties customized design of terminals.

2.13 Material lead times Estimated lead times on long‐lead items may be * No, but may be minimised through
underestimated careful planning

2.14 Interface with the Lagos State Bus The move to five State bus concessions with * No, but may be minimised through
Reform Programme modern buses may be delayed and affect the careful planning
effectiveness of the Mega Terminals

2.15 Substandard construction methods The contractor may use substandard methods of * No but may be minimised through
construction which may compromise delivery careful formulation of bidding
and quality of project documents and monitoring

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No Risk Heading Definition Public Private Shared Ability to Transfer Risk

Sector Sector

3 Health and Safety Risk

3.1 Contractor does not adhere to The Contractor may breach current Health and * No, but could impose penalties and
current regulations Safety legislation or accepted codes of practice charges to the Contractor

3.2 Changes to regulations Legislation or accepted codes of practice may * No, but within control of Government
change during contract period

3.3 Responsibility for maintaining on‐site Theft and/or damage to equipment and *
security materials may lead to unforeseen costs in terms
of replacing items, and delay

3.4 Responsibility for maintaining site The Construction, Design and Management *
safety Regulations and Occupational Safety Health and
Safety at Work regulations must be complied
with

4 Environmental

4.1 Mitigation does not match Suggested mitigation measures to alleviate * No, but can be minimised through careful
environmental objectives environmental impact of the proposals may not planning of mitigation measures
adequately protect the environment as intended
and hence may need to be amended leading to
time and cost implications

4.2 Contamination of water Accidental contamination of the water may lead * The risk can be transferred with
to delay in the works during construction or due Conditions of Contract; Can seek
to leakage of fuel during operations Insurance against such conditions

5 Public Inquiry

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No Risk Heading Definition Public Private Shared Ability to Transfer Risk

Sector Sector

5.1 Number of objections greater than Dealing with a greater than anticipated number * No
anticipated of objections may lead to additional
management costs and delay

5.2 Protester action Protester action against the scheme may incur * Yes, can be transferred through the
additional costs, such as security costs Contract

6 Finance

6.1 Failure to obtain adequate funding Failure to obtain adequate funding may lead to * Bidders to submit proof of financing as
indefinite delay (no financial close) part of their bid packages.

6.2 Target cost exceeds budget (Budget Tender prices may exceed the pre‐tender *
to include optimism bias) estimate and allocated budget

6.3 Change in volumes and controlled Traffic shortfalls and price control limit actual * Covered under the availability payments
charges/fares revenues. and performance regime in the contract
6.4 Currency / Foreign exchange Unforeseen fluctuations in currency may change * This risk is typically priced in bidders’
budget costs dramatically proposals

6.5 LAMATA may lack funds LAMATA has seen its operating budget cut in * This risk remains with the public sector
recent years and may not be able to support the
project.

7 Legislation

7.1 Legislative/regulatory change A change in non‐specific legislation/regulations * No, but control rests with Government
taking effect during the construction phase,
leading to a change in the requirements and
variations in cost

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No Risk Heading Definition Public Private Shared Ability to Transfer Risk

Sector Sector

7.2 Changes in taxation Changes in taxation may affect the cost of the * No, but control rests with Government
project

7.3 Changes in the rate of Value Added Changes in the rate of VAT or VAT legislation * No, but control rests with Government
Tax (VAT) or VAT legislation may increase the cost of the project

8 Performance Risks

8.1 Latent defects in new build Latent defects to the new build, which require * Yes, can be transferred through the
repair, may become apparent Contract

8.2 Change in specification initiated by There is a chance that, during the construction * No, but can minimise through careful
both Government and Operator phase of the project, the Government and the project management and internal
Operator will require changes to the coordination
specification

8.3 Lack of Enforcement of no on street Would mean that the Mega Terminal concept * Need to be planned in parallel for
stopping/access to Lagos beyond the not attractive to and not used by Inter State effective Mega Terminal start up.
Terminals re Inter State buses buses and limits effectiveness of the terminal.
With significant Revenue and congestion
impacts.
8.4 Maintenance Risk The risk of not maintaining the assets to the * Contract reporting & monitoring.
appropriate standards and specifications for the Performance Bond may be called upon to
life of the project. rectify maintenance shortfalls
Increased maintenance costs due to increased particularly towards the end of the
volumes. contract period.
Incorrect estimates and cost overruns.
8.5 Meeting hand back requirements The risk of not maintaining the concession * Sound monitoring & control of contract
assets, operations, staffing etc. in line with the performance by the authority.
transfer back requirements at the end of the Performance Bond may be called upon to
contract rectify maintenance shortfalls

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No Risk Heading Definition Public Private Shared Ability to Transfer Risk

Sector Sector

particularly towards the end of the

contract period
9 Termination Cost Risks

9.1 Termination due to default by The risk that the Government defaults, leading * No
Government to contract termination and compensation for
the private sector

9.2 Default by external funding sources The risk that the external funding defaults and * Yes, through Contract
the project is not completed

9.3 Termination due to default by the bus The risk that the operator defaults and step in * Government could recover costs for
terminal operator rights are exercised by the financiers, but they default but would incur additional costs
are unsuccessful, leading to contract associated with appointing another
termination operator

10 Technology and Obsolescence Risks

10.1 Technological change Technical changes that require Government and * No

Operator to revise their output specifications

11 Land Risks

11.1 Cost of land Land costs could be greater than expected * No

11.2 Protracted Land Acquisition process Compulsory * No

purchase/Negotiations/Compensation process
delays project and prevents timely financial
close
12 Statutory Undertaker Risk

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No Risk Heading Definition Public Private Shared Ability to Transfer Risk

Sector Sector

12.1 Unforeseen STAT’s apparatus The possibility exists that statutory utilities * Yes, can be transferred with onerous
apparatus may be found that will require Conditions of Contract but this may lead
diversionary works or changes to the design to higher than anticipated tender prices

13 Other project risks

13.1 Delayed planning approval A delay in receiving planning permission may * No, but can be minimised through
have broader cost implications for the project, coordination with different agencies
as well as the loss of potential savings

13.2 Inadequate Resources Human resources or allocated time may be *

inadequate for satisfactory project management

13.3 Critical staff appointment / Difficulty in obtaining the required number of *

competencies / certification critical staff for efficient operations, and/or
inadequate certification obtained

13.4 Insufficient project capacity Possible fatalities or interruptions in operations, * No, but can be minimised through
or damage to assets internal co‐ordination

14 Political Risk

14.1 Political risk The risk of Government intervention, * The Contracting Authority typically bears
discrimination, seizure or expropriation of the responsibility for political events outside
project. the Private Partner’s control.
Public sector budgeting.

15 Revenue Risk

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No Risk Heading Definition Public Private Shared Ability to Transfer Risk

Sector Sector

15.1 Interstate bus operators not using Interstate bus operators will discharge/collect * Regulation and enforcement
ISBT passengers outsider of ISBT or interstate buses
will continue to operate into City Center Access fee set at a rate where it is
equally (or more) profitable to use ISBT
to continue journey into City Center

Charging pedestrians access fee to enter

terminal is an option

Availability payments seek to address

this though, such payments should be
made so long as the operator meets a
certain minimum performance standard

15.2 Lagos State Bus Company cannot pay Lagos State Bus Company is not profitable * Availability payments seek to address
access charges enough to sufficiently pay access fees which is a this though, such payments should be
loss of revenue to the operator made so long as the operator meets a
certain minimum performance standard

15.3 Service level decreases Lagos State Bus Company reduces service * Availability payments seek to address
frequency this though, such payments should be
made so long as the operator meets a
certain minimum performance standard

16

Stakeholder Risks

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No Risk Heading Definition Public Private Shared Ability to Transfer Risk

Sector Sector

16.1 Unions may not approve of project Bus operators unions may not buy into the * Need early and regular engagement with
project may try and block implementation the Unions to ensure that they are fully
supportive of the project.

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System in Lagos

Appendix A: List of
Stakeholders consulted
S.No. Name of Agency Name of Person met Date
1. Lagos Metropolitan Area 1. Abiodun Dabiri, MD, LAMATA January 15, 2018
Transport Authority 2. Frederic Oladeinde, Director, Corporate
(LAMATA) and Investment Planning
3. Desmond Amiegbebhor
4. Olasunlami Okusaga
5. Seun Sonoki
6. Atobatele Abidemi
7. Femi Faymbo
8. Omolara Kareem, GIS Specialist
2. Office of Overseas Affairs 1. Dr. Kayode Oguntimehin, Permanent January 18, 2018
and Investment (Lagos Secretary
Global) 2. Yinka Lawal, SA Foreign Affairs
3. Federal Ministry of Power, 1. Fashola Babalola, Hon. Minister and some January 22, 2018
Works and Housing other top offcials in the Ministry
4. Federal Ministry of 1. Sabiu Zakari, Permanent Secretary January 23, 2018
Transport 2. Anthonia A. Ekpa, Director, Road Transport
& Mass Transit Administration
3. Sani Umar Galadanchi, Director Maritime
Services
4. Alfred Agaba Abah, Deputy Director, Road
Transport Administration
5. Gloria K. Ahmed, Deputy Director, Road
Transport Administration
6. Okuboere S. Mukah, Assistant Director,
Mass Transit Administration
5. Federal Ministry of Finance 1. Ahmed Aliyu, Director, Directorate of January 23, 2018
International Economic Relations (DIER)
2. Abdulfatah Abdulsalam, Assistant Director,
Infrastructure
3. Vivian Nwosu, Assistant Director, Policy
4. Adesoji Kayode, Senior Admin Officer,
Infrastructure
6. Office of the Vice President 1. Kolade Sofola, Senior Technical Adviser, January 23, 2018
TATI
2. Imeh Okon, Senior Special Adviser to
President on Infrastructure, TATI
3. Dayo Alao, Senior Technical Adviser, TATI
4. Emmanuel Onwudi, Senior Technical
Adviser, TATI
7. Planet Projects 1. Biodun Otunola, MD/CEO January 18, 2018
2. Sola Adepoju, Assistant Project Director
3. Ifeoluwa Afolayan, Assistant Project
Director
4. Demola Olawepo, Assistant Project Director

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System in Lagos

S.No. Name of Agency Name of Person met Date

8. Nigerian Union of Road Kabiru Ado July 12, 2018
Transport Workers
(NURTW)

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Appendix B: List of
Secondary Data/reports
reviewed
S.No. Name of Document or Data Reference/Author/Year Agency/Source
1. Consultancy Services for the Extension of the Strategic Transport Master Plan LAMATA
(STMP) and Strategic Travel Demand Model (STDM) to Cover the Mega City
Region, ALG and Europraxis, December 2014
2. Development of Bus Route Network for Lagos State ‐ Final Report, integrated LAMATA
transport planning, Ibis Transport Consultants & AEC, April, 2015
3. Value of Time and Transport Elasticity Study for the Mega City Region ‐ Final LAMATA
Report, Leigh Fischer, May 2015
4. Lagos Bus Route Network Study, AEC Engineering and IBIS Transport LAMATA
Consultants Limited, 2014
5. Study for Development of Public Transport Interchanges, LAMATA, 2018 LAMATA
6. Lagos Non‐Motorized Transport (NMT) policy, 2017 LAMATA
7. Concept Note for Establishing Gateway Interstate Mega Bus Terminals, LAMATA LAMATA
8. Gateway Terminal Brief (LAMATA’s internal survey for inter‐state bus parks), LAMATA
LAMATA
9. Lagos Mass Transit Alternatives Study, Systra, 2014 LAMATA
10. Lagos State Transport Statistics, Lagos Bureau of Statistics, 2016 Secondary
Research
11. Lagos State Statistics, Lagos Bureau of Statistics, 2016 Secondary
Research
12. Overview of the Bus Reform and the Gateway Mega Terminal Project, LAMATA, LAMATA
2018
13. Lagos Investor’s Guide, Lagos Global, 2015 Lagos Global/
Online
14. Data/map collected on bus movement (inter‐state and intra‐state), Planet Planet Projects
Projects, 2017
15. Map of potential bus terminals, Planet Projects, 2017 Planet Projects
16. Data/Map of existing loading points, Planet Projects, 2017 Planet Projects
17. Contract Agreement, Drawings and Cost Estimated of Ikeja Intra‐State Bus LAMATA
Terminal

S.No. Documents specific for Legal Review Source

1. Lagos State Transport Sector Reform Law of 2018 Online + LASWA
2. Lagos State Urban and Regional Planning and Development Law 2010 Online
3. Lagos State Development Plan 2012‐ 2025 Online
4. Lagos State Public Private Partnership Law 2011 Online
5. PPP Manual for Lagos State Online
6. Lagos State Public Procurement Law 2011 Online
7. Lagos State Environmental Protection Agency Law 1996 Online

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S.No. Documents specific for Legal Review Source

8. Land Use Act 1978 Online
9. Lagos State Safety Commission Law Online
10. Lagos State Arbitration Law 2009 Online
11. Lagos Court of Arbitration Law 2009 Online
12. Arbitration & Conciliation Act Online

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Appendix C: Questionnaire
Template used for the
survey
A Bus Park Survey
1 Name of location
2 In bus arriving or departing the location Arriving/Departing
3 Time of arrival/departure
4 For buses Arriving at location
a Origin:
b Cities/towns stopped at:
c Fare from Origin (start):
d Estimated time of departure from Origin:
5 For buses Departing location
a Final destination:
b Cities/towns stopped it will stop at:
c Fare to Destination (final):
d Estimated travel time to final destination:
6 Type of bus & manufacturer
7 Carrying capacity of the bus
8 No. of passengers boarded/alighted from buss
9 No. of Round Trips made by each bus
10 Bus Registration Number
11 Type and amount of Charges paid related to parking:
Bus Parking fees (per day/ per trip/ per month)
Other Charges (please specify)

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Appendix D: Key
State/Federal approvals
required for the project
Nature of Approval Agency/ Institution(s) Mega
Terminals
1. Approval of PPP  Lagos State Executive Council (Exco) and the Governor 
transactions of Lagos State are the authorities for the final approval
of PPP transactions.
2. User Fee  PPP Office with the approval of the Lagos State House 
of Assembly approve the user fees or toll to be charged
by any concessionaire or private operator.
 The Law did not provide for the approval of Lagos State
Ministry of Finance (MoF) or Attorney‐General of Lagos
State. However, MoF will play a key role in assessing
the budgetary implications of PPP projects.51
3. Permit to operate a private  Lagos State Parking Authority 
bus terminal and truck park
4. Planning Permit  Lagos State Ministry of Physical Planning and Urban 
Development
5. Environmental Impact  Lagos State Environmental Protection Agency 
Assessment (EIA) Report (LASEPA)
 National Environmental Standards and Regulations
Enforcement Agency (NESREA)
6. Safety Compliance  Lagos State Safety Commission (LSSC) 
Certificates

51
The MoF ensures that the forecasted costs for the LASG including any subsidies that may be required to make a
project viable are affordable over the full life of the contract. Together with the relevant MDA, it also reviews the
costs and contingent liabilities as the project design and risk valuations are refined during the project preparation
and procurement phases

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Appendix E: Market
Sounding audience
# Investor/ Association Contact Person Telephone Email
1. Nigerian Union of Road Stephen Okafor – GM, 08033360515 steveokafor2004@ya NURTW HQ No 8, Plot 1236
Transport Workers Special Services hoo.com Sapele street, Garki 2, Abuja
Nigeria.
(NURTW)
2. Planet Projects Biodun Otunola, 08058500892 biodun.otunola@plan Ayedun House, No. 19, Igbasan
Managing Director; etprojectsltd.com; Street, Off Irewole Street,
Sola Adepoju sola.adepoju@planet Opebi, Ikeja‐Lagos.
projectsltd.com
3. Catamaran Logistics Layi Are +234 [email protected] No 6. Shaffi Sule street off Akin
Services Limited 8022905272 http://catamaranng.c Leigh street, off Admiralty Way
om/ Lekki Phase 1 Lagos State
Nigeria.
4. Skye Shelter Fund Bolarinwa Odeyingbo +234 (1) 280 shelter@skyebankng. Skye Financial Services
1400 com Plot 287, Ajose Adeogun
Street,
Victoria Island, Lagos | Nigeria
5. Top Services Limited Chief Tokunbo 01 774 9222 No. 63B, Marine Road, Apapa,
Omisore Lagos, Nigeria
6. Brains & Hammers Albert White 08184462626 Albertwhite71@yaho Abuja Office
o.com Brains and Hammers Estate,
African University of Science &
Technology Complex, KM10,
Airport Road, Galadimawa.
Nigeria

Lagos Office
112A Olabode George,
Off Ajose Adeogun, Victoria
Island, Lagos
7. The Chrome Group Tope Borishade 0805 746 2656 topeborishade@gmai No. 22, Lobito Crescent,
Limited l.com Wuse II, Abuja,
Federal Capital Territory (FCT) ‐
Nigeria
8. Actis Funke Okubadejo +234 1 448 [email protected] Actis Heritage Place (10th
5700 [email protected] Floor) 21 Lugard Road, Ikoyi
,Lagos
9. Peace Mass Transit Mr. Uche Collins 0805 509 1812 collinsuche001@gmai No 8 – 10 Peace Factory Road,
l.com Emene Industrial Layout,
Enugu State.
10. Cross Country Limited Jolomi Okorodudu 8056644963 jolomi_okorodudu@ No. 345, Muritala Muhammed
hotmail.co.uk Way, Opposite Presbyterian
Church Yaba, Lagos Nigeria.
11. G.U.O Transport Ltd. Ms. Doris doris.nzube@guotran 36, Opere Street, Wema Bank
09053820359 sport.com Bus Stop, Coker, Lagos, Nigeria

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# Investor/ Association Contact Person Telephone Email

12. UACN Property +234‐ [email protected] UAC House
Development Company 08137513637 m 1‐5 Odunlami Street, Lagos
PLC (UPDC)
13. ABC Transport PLC 08033389056 contact@abctranspor Head Office
t.com Owerri North(Ho)
Km 5 MCC Uratta Rd
Owerri, Imo State,

Corporate Office
Amuwo‐Odofin Terminal,
Lagos Plot 79, Oba Kayode
Akinyemi way by Festac
Bypass, Amuwo‐Odofin, Lagos,
Nigeria
14. Cross Country Limited Jolomi Okorodudu 08056644963 No. 345, Muritala Muhammed
Way Opposite Presbyterian
Church Yaba, Lagos, Nigeria.
15. Chisco Transport 08113798985 No. 104, Funsho Williams
Company Avenue, Iponri, Surulere,
Lagos, Nigeria.
16. E. Ekeson Bros Limited. 08033214388 No. 31, Ikorodu Road, Jibowu,
Lagos Mainland, Lagos, Nigeria
17. Efex Nigeria Limited 07035060003 N/A
18. Ekene Dili Chukwu No. 1, Street, Off Ikorodu
Transport Road, Jibowu, Lagos, Nigeria.
19. God Is Good Motors 08090204830 N/A
(GIGM.com)
20. Iyare Motors 08025774416 Head Office (Benin)
08055895927 No. 25, Urubi Street, Benin,
07036168899 Edo, Nigeria

Lagos Office
No. 181, Abeokuta express way
Iyana Ipaja, Lagos, Nigeria
21. Okeyson Motor 08060082209 No. 13, Ikorodu road, Jibowu,
Lagos, Nigeria.
22. Abia City Transport 07088354081 C.40 Ikenegbu Extension, Egbu
Road, Owerri, Imo, Nigeria.
23. Abiodun Ajayi 08055475484 Abiodun AJAYI Autos ‐ aaa
Autos(Aaa) jibowu, Lagos, Nigeria
24. Africa Eagle 08062103113 No. 1, Edmund Crescent,
Multitransport Services Jibowu, Lagos Mainland, Lagos,
Nigeria
25. G. Agofure Motors 08025735755, No. 154, Pti Road Efurum,
08023547472 Effurun, Warri Central, Delta,
08067982890 Nigeria
26. Chukwu Buikem Motor 08188025044 N/A
27. Edegbe Transport 08033069826 Edo State

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# Investor/ Association Contact Person Telephone Email

Plot 245, Ugbowo Lagos Road,
Benin City, Edo State,
Nigeria, West Africa

Lagos State
Plot 49, Adeyemo Akapo
Street, Omole Phase 1,Off
Isheri Road, Isheri, Lagos State,
Nigeria, West Africa

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