Legal Opinion: No Grounds For Unilateral Revocation Of Benin-Asaba Expressway 25-Year Concession, SAN Tells FG

Senior Advocate of Nigeria, Abiodun Olatunji SAN, has warned the Federal Government to exercise caution over plans to revoke the 25-year concession agreement for the Benin-Asaba Expressway.

The legal opinion was given following the ongoing dispute between the Federal Ministry of Works and the Benin-Asaba Expressway Concession Company Limited, BAECC, over the condition of the 125-kilometre highway.

According to Olatunji, the absence of evidence of abandonment, repudiation or unreasonable delay in repair works may not be sufficient grounds for unilateral revocation of the subsisting concession.

He noted that his review was based on a summary of the Concession Agreement and focused on the Federal Government’s powers to intervene, conditions for termination, and the difference between emergency intervention and outright termination of the concession.

He explained that his opinion remains subject to the full provisions of the agreement, including clauses on default, cure periods, step-in rights, termination, compensation and lender protections.

The dispute comes as the Ministry of Works alleged breach of concession terms by BAECC and proposed mutual termination of the deal. The Ministry cited deteriorating road conditions, severe gridlock and hardship for motorists between Benin and Asaba.

Minister of Works, David Umahi, had earlier expressed dissatisfaction with the project after an inspection with Edo State Governor Monday Okpebholo and listed possible options to resolve the issues.

But Olatunji in his opinion stated that the Minister of Works has no general or personal authority to revoke the concession at will, adding that the contracting party remains the Federal Government acting through the Ministry.

He said ongoing construction activities on the corridor could make it difficult to establish claims of abandonment or total failure of performance.

He however acknowledged that the Federal Government has a duty to intervene where road conditions endanger motorists, noting that the situation may justify immediate and proportionate emergency intervention where step-in rights exist under the agreement.

According to him, any emergency step-in should be limited to addressing immediate danger while preserving the underlying concession arrangement.

He further argued that broad public interest considerations alone may not provide contractual basis for termination, as they do not automatically extinguish rights relating to compensation, cure periods or lender protections.

Olatunji added that permanent takeover, removal of the concessionaire, total redesign of the route or appointment of replacement contractors may go beyond limited emergency intervention unless done through mechanisms provided in the agreement such as valid change in scope, negotiated amendment, termination-for-convenience with compensation, or a properly executed default termination process.

He stressed that his conclusions are provisional pending review of the complete Concession Agreement and related documents.

The Benin-Asaba Expressway concession was approved by the Federal Executive Council on January 16, 2023 and the agreement signed on May 23, 2023 under the Design, Finance, Build, Operate and Transfer model with a 25-year tenor running from May 2023 to May 2048. A 2026 transport sector study prepared for JICA also lists the project as under implementation.

The highway from Ring Road Roundabout in Benin City to Summit Junction in Asaba is a critical corridor linking the South-South, South-East and parts of the South-West.

The dispute intensified during the rainy season as motorists faced prolonged gridlock.

BAECC has denied abandoning the project, attributing challenges to heavy rainfall, high traffic volume and complexities of reconstructing the road while keeping it open. The company cited ongoing earthworks, drainage, asphalt laying and carriageway expansion across sections of the road.

The Ministry itself had acknowledged the contractual complexities at an August stakeholders meeting where Umahi noted that decisions under the concession carry significant implications.

The project is one of several concessions under the Highway Development and Management Initiative, HDMI, designed to attract private capital into federal highways. Stakeholders say how the dispute is resolved will be closely watched by investors and lenders in public-private infrastructure projects.

While government has reaffirmed commitment to fixing the highway, the legal opinion suggests emergency intervention and respect for contractual rights can co-exist without delaying restoration of the vital corridor.