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Ambode Lagos raises N30bn to purchase over 5000 air-conditioned buses to replace Danfo

Ambode said the initiative will phase out Danfo buses as means of transportation in the state within the next two years.

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Lagos State Governor, Akinwunmi Ambode play

Lagos State Governor, Akinwunmi Ambode

(Pulse Nigeria)

Lagos State government has earmarked N30 billion to fund the proposed Bus Reform Initiative aimed at discontinuing the use of the yellow commercial buses, popularly called Danfo.

Governor Akinwuni Ambode disclosed this while speaking to journalists over the weekend.

He said the initiative will phase out Danfo buses as means of transportation in the state within the next two years.

Ambode said his government has identified the daily challenges of Lagosians while commuting via public transportation, adding that the new plan would provide a viable alternative.

He stated that the Bus Reform Initiative is a three-year plan aimed at introducing over 5000 air-conditioned buses to replace Danfo, pointing that the yellow buses are no longer befitting of the State’s mega city status.

He said: "We decided that the best thing is to allow the yellow buses go and so the Bus Reform Initiative itself is a three-year plan of 2017 to 2019 in which it intends to bring in new buses of 5,000 units in the three-year plan.

"The bigger size buses will take 70 people and then the medium range buses will take 30 people. We believe that the middle range buses will be supplied up to 70 per cent of the total volume which will amount to about 3,600 units and then the longer range in that direction."

On how the government intends to fund the initiative, Ambode said his administration will launch a public transportation infrastructure bond of N100 billion that will span between seven to 10 years, adding that the government already has a sinking fund which it intends to put into the bond.

The Governor added: "You are aware that the Federal Government paid the refund of the Paris Club Loan last December and this is a money belonging to the State Governments due to the refund and so Lagos State decided not to touch its share of the Paris Club refund. Right now, we have a sinking fund of N14.5 billion that is already put in place to drive this public transportation bond.

"We refused to touch our money and we believe that the second batch of the refund should be paid next month and eventually that will be N29 billion that we will have. I will add another N1 billion to it making it N30 billion to kick start this initiative.

"By the time we have N30 billion as sinking fund to drive the bus initiative against the bond of N100billion that we want to put into the market, there will be that credibility and credence that the bond will drive itself and that is the whole idea."

Aside from the bond, Ambode said his administration also intends to give out the franchise to interested stakeholders in multiple of 50 buses each, 100 buses, 200 buses and above, explaining that what is required is a down payment of 25 per cent of the buses.

"So, these are bankable projects as we have a sinking fund and so our exposure as a government is just technically 75 per cent. So, from the kind of machinery we want to use to run the buses, there are no cash takings, everything is automated and obviously, who ever has a franchise, whoever drives, they have the recourse to take part of the money while part of the intake also goes to the repayment of the facility and so it is a comprehensive template," he said.

The Governor added that the Danfo drivers, who would be absorbed into the new initiative are expected to adapt accordingly, stating that the transport unions would be expected to take ownership to ensure sustainability.

ALSO READ: How we’re developing Lagos roads – Ambode

Ambode explained that: "This is just a paradigm shift where danfo drivers move from being addressed as Danfo drivers but as professional drivers. So, we will buy back the danfos from them and it becomes the seed money to become eventual owners of those buses in the years the facility is spread.

"It is something we have been working on in the last one year and we don’t come out to say we are going to do anything without working properly on it. It is process and now we are at the advocacy process.

"We intend to start to go to the bus parks and all that to educate people and the integral part of these buses is what you see us trying to provide bus terminals, Laybys, bus stops. They are coming in pieces but they will become a complete cup of delivering this particularly product when we put them together."

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