Benin-Asaba Expressway: SAN Warns FG Against Unilateral Revocation of 25-Year Concession

A Senior Advocate of Nigeria (SAN), Abiodun Olatunji, has cautioned the Federal Government against unilaterally revoking the 25-year concession for the Benin-Asaba Expressway, arguing that the deteriorating condition of the highway does not, by itself, establish sufficient legal grounds for terminating the agreement.

Olatunji gave the warning in a legal opinion on the controversy surrounding the concession and the ongoing reconstruction and intervention works on the 125-kilometre highway.

The legal opinion comes amid an escalating disagreement between the Federal Ministry of Works and the Benin-Asaba Expressway Concession Company Limited (BAECC) over the state of the road, the pace of reconstruction and the future of the concession arrangement.

The Ministry has raised concerns over alleged breaches of provisions of the concession agreement by BAECC and has reportedly proposed a mutual termination of the arrangement.

However, Olatunji urged the government to exercise caution, maintaining that the absence of clear evidence of abandonment, repudiation or unreasonable delay in the execution of remedial works could make unilateral revocation legally difficult to sustain.

He stressed that the Federal Government’s concerns over the condition of the highway could justify urgent action to protect motorists and other road users, but such intervention should not automatically be interpreted as a termination of the underlying concession.

“Our considered opinion is that the Minister has no general or personal authority to revoke the concession at will,” Olatunji stated.

According to him, the contracting party to the agreement is the Federal Government, acting through the relevant ministry, rather than the Minister of Works in his personal capacity.

The lawyer said his review examined the Federal Government’s powers to intervene in the project, the circumstances under which the concession could be terminated and the distinction between emergency intervention and the permanent termination of the concession.

He noted, however, that his conclusions were based on the summary of the Concession Agreement and other documents made available to him, rather than the complete contractual documentation.

He therefore said the opinion should be regarded as provisional pending a comprehensive review of the full agreement and related documents, particularly provisions dealing with default, cure periods, step-in rights, termination, compensation and protections for lenders.

The Benin-Asaba Expressway has become a major source of concern for motorists following worsening sections of the road and prolonged traffic congestion, particularly during the rainy season.

The Federal Government has attributed some of the hardship experienced by motorists to the deteriorating condition of the highway, while Works Minister David Umahi has previously expressed dissatisfaction with the state of the project after inspecting the corridor with Edo State Governor Monday Okpebholo.

The road links Benin City in Edo State with Asaba in Delta State and serves as an important transport corridor connecting the South-South and South-East regions, while also providing connections to parts of the South-West.

Olatunji, however, pointed out that the existence of ongoing construction activities could make it more difficult to establish allegations of abandonment or total failure of performance.

He noted that where evidence shows that construction works are continuing, claims that the concessionaire has completely abandoned the project would require closer examination of the specific obligations contained in the concession agreement.

BAECC has consistently rejected suggestions that it abandoned the project, pointing to ongoing earthworks, drainage construction, asphalt laying, carriageway expansion and other activities along different sections of the highway.

The concessionaire has also attributed some of the difficulties affecting construction to heavy rainfall, increased traffic volumes and the challenges associated with reconstructing a major highway while maintaining traffic flow.

Against this background, Olatunji said the government could rely on emergency intervention mechanisms where the condition of the road posed an immediate danger to motorists and the public.

He described such action as potentially constituting an “immediate and proportionate emergency intervention”, particularly where the concession agreement provides the government with step-in rights.

According to him, however, the purpose of an emergency step-in would ordinarily be to address the immediate danger rather than to automatically extinguish the concession agreement.

The distinction is significant because a permanent takeover of the project, removal of the concessionaire, redesign of the entire route or appointment of replacement contractors could go beyond the scope of a temporary emergency intervention.

Such measures, he argued, would have to be implemented through mechanisms expressly provided for under the concession agreement.

These could include a valid change in project scope, a negotiated amendment, termination for convenience where applicable and accompanied by the required compensation, or termination based on established contractual default after the prescribed procedures have been followed.

Olatunji also cautioned against relying solely on broad public-interest considerations as a basis for terminating the concession.

While the government has a responsibility to protect lives and property and may take measures to address dangerous road conditions, he argued that public interest considerations do not automatically extinguish contractual rights, including provisions relating to compensation, cure periods and lender protections.

The lawyer’s position comes against the backdrop of the Federal Government’s efforts to address the worsening condition of the highway while resolving its differences with BAECC.

During an August stakeholders’ meeting, Umahi reportedly acknowledged some of the contractual complexities surrounding the project and sought the concessionaire’s agreement on proposed changes, highlighting the legal and commercial implications of decisions taken under the existing arrangement.

The concession dates back to 2023, when the Federal Executive Council approved the project on January 16 of that year. The concession agreement was subsequently signed on May 23, 2023.

The project was structured as a Design, Finance, Build, Operate and Transfer (DFBOT) arrangement with a 25-year concession period, including the construction phase.

A 2026 transport-sector study prepared for the Japan International Cooperation Agency (JICA) also records the concession as running from May 2023 to May 2048 and identifies the project as being under implementation.

The dispute therefore has implications beyond the immediate condition of the Benin-Asaba corridor.

The project is one of the road concessions being implemented under the Federal Government’s Highway Development and Management Initiative (HDMI), which was designed to attract private-sector capital, expertise and investment into the development and management of federal highways.

The outcome of the disagreement could consequently be watched closely by private investors, lenders, concessionaires and other participants in Nigeria’s infrastructure public-private partnership market.

For the Federal Government, the immediate challenge remains restoring the highway and reducing the hardship faced by motorists. But the legal opinion suggests that achieving that objective does not necessarily require an immediate termination of the concession.

Rather, it points to the need to establish precisely whether and to what extent BAECC has breached its contractual obligations, determine the appropriate responsibility for remedial works and, where necessary, activate the contractual mechanisms available to the government.

The dispute also underscores the broader challenge of balancing urgent public infrastructure needs with the contractual protections that underpin long-term concession agreements.

As pressure mounts over the condition of the highway, the resolution of the Benin-Asaba dispute could therefore test how the Federal Government manages emergency interventions while preserving, modifying or terminating long-term infrastructure concessions in accordance with their contractual terms.