Senior Advocate of Nigeria, Abiodun Olatunji has warned that the Federal Government’s effort to resolve the worsening condition of the Benin-Asaba Expressway could face contractual and legal complications if it seeks to unilaterally terminate the highway’s 25-year concession.
Olatunji said the deteriorating condition of the 125-kilometre highway may warrant urgent government intervention, but argued that the circumstances outlined so far may not, on their own, establish sufficient grounds for unilateral termination of the concession.
His legal opinion comes amid an escalating dispute between the Federal Ministry of Works and the Benin-Asaba Expressway Concession Company Limited, BAECC over the state of the road, reconstruction activities and the terms of the concession.
The dispute has become a pressing public issue as worsening road conditions and prolonged gridlock have caused significant hardship for motorists using the corridor between Benin City and Asaba.
Works Minister David Umahi has previously expressed dissatisfaction with the state of the project after inspecting the highway with Edo State Governor Monday Okpebholo. The Ministry has alleged breaches of provisions of the concession agreement and has reportedly proposed a mutual termination of the arrangement.
Olatunji, however, said the Federal Government would need to follow the procedures contained in the concession agreement before terminating the arrangement.
“Our considered opinion is that the Minister has no general or personal authority to revoke the concession at will,” he stated, stressing that the contracting party is the Federal Government acting through the Ministry.
He further argued that the existence of ongoing construction activities could make claims of abandonment, repudiation or total failure of performance more difficult to establish.
The lawyer distinguished between the Government’s power to take emergency measures to protect motorists and its power to permanently terminate the concession.
He said the condition of the highway could justify “immediate and proportionate emergency intervention”, particularly where the concession agreement provides for government step-in rights. Such intervention, he said, would ordinarily be directed at addressing immediate risks while leaving the underlying concession intact.
The opinion also cautioned against relying solely on broad public-interest considerations as a basis for terminating contractual rights, noting that provisions relating to default, cure periods, compensation, lender protections and termination would still have to be considered.
Olatunji said a permanent takeover of the project, removal of the concessionaire, redesign of the route or appointment of replacement contractors could go beyond a limited emergency intervention unless carried out through mechanisms provided for in the agreement.
These could include a valid change in scope, negotiated amendment, termination-for-convenience provision with applicable compensation, or a properly executed default-termination process, he said.
The concession was approved by the Federal Executive Council on January 16, 2023, and the agreement was signed on May 23, 2023. It was structured as a Design, Finance, Build, Operate and Transfer arrangement running for 25 years, including the construction phase.
A 2026 transport-sector study prepared for the Japan International Cooperation Agency also records the concession as running from May 2023 to May 2048 and identifies the project as being under implementation.
BAECC has disputed suggestions that the project has been abandoned, pointing to ongoing earthworks, drainage construction, asphalt laying, carriageway expansion and other activities along sections of the corridor. The concessionaire has attributed some of the difficulties to heavy rainfall, increased traffic and the challenges of reconstructing a major highway while keeping it open to traffic.
The Ministry has also acknowledged the contractual complexities surrounding proposed changes. At an August stakeholders’ meeting, Umahi reportedly noted the implications of decisions under the concession arrangement and sought the concessionaire’s agreement on proposed changes.
The Benin-Asaba corridor is a major transport link connecting the South-South and South-East regions with parts of the South-West, making the dispute significant beyond the immediate condition of the highway.
The concession is also part of the Federal Government’s Highway Development and Management Initiative (HDMI), which seeks to attract private capital and technical expertise into the development and management of federal highways.
The manner in which the dispute is resolved could therefore have implications for other long-term public-private infrastructure concessions, particularly the confidence of investors, lenders and concessionaires in the Government’s approach to contractual agreements.
Olatunji stressed that his opinion was based only on the documents made available to him and should be regarded as provisional pending review of the complete concession agreement and related contractual documents.
For the Federal Government, the immediate challenge remains restoring the highway and reducing the hardship faced by motorists while determining whether any contractual default has occurred and, if so, what remedies are available under the agreement.
The legal opinion suggests that urgent intervention to address dangerous road conditions and adherence to the concession’s contractual framework can proceed together, rather than one necessarily requiring the abandonment of the other.