BUILD BUILD BUILD Nigeria’s Infrastructure Space – Opportunities & Challenges PRESENTATION BY THE INFRASTRUCTURE CONCESSION REGULATORY COMMISSION AT THE 1ST ISTANBUL PPP WEEK, 2015. ISTANBUL, TURKEY Engr. Chidi Izuwah Ag. DIRECTOR GENERAL INFRASTRUCTURE CONCESSION REGULATORY COMMISSION September 2017
Political Will EXCERPTS OF SPEECH OF PRESIDENT MUHAMMADU BUHARI AT THE THE 55 TH GENERAL CONFERENCE OF THE NIGERIAN BAR ASSOCIATION AUGUST 23, 2015 “We also have a huge infrastructure deficit for which we require foreign capital and expertise to supplement whatever resources we can marshal at home. In essence, we seek public private partnerships in our quest for enhanced capital and expertise. ”
Outline • Numbers &Opportunities • The PPP Framework The key strategic objective of the Infrastructure Concession Regulatory Commission (ICRC) is to accelerate • Active PPP Projects investment in national infrastructure through private sector funding by assisting • Projects at Development Phase the Federal Government of Nigeria and its Ministries, Departments, and Agencies (MDA) to implement and establish • Projects at Procurement effective Public Private Partnership’s (PPP) procurement. • Pipeline Projects • Supporting Initiatives • Take-away 3
Numbers & Opportunities Based on our 30-year National Integrated Infrastructure Masterplan (NIIMP) : • Nigeria requires an expenditure of US$ 3.10 trillion over 30 years. • The sectors covered are energy, transport, agriculture & water resources, social infrastructure and security. • 48% of planned investment of US$ 3.10 trillion is expected from the private sector by way of PPP and other arrangements
Numbers & Opportunities
Numbers & Opportunities • The Infra rastr struc uctur ture e Co Conces essi sion on Regul gulator tory y Co Commission mission (Est Estab abli lishme hment nt, etc tc.) .) Act t 2005. 5. • Natio iona nal l Polic icy on PPP P (N4P) 4P) • WWW.ICRC CRC.GO .GOV.NG .NG – TO DOWNLOAD AD LEGAL AND REGULATORY FRAMEWORK
PPP Framework A Public-Private Partnership is a contractual agreement between a public agency (federal, state or local) and a private sector entity . Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility (NCPPP USA) Growing Small and Urgent need for Wide demand for depleting alternative funding of Infrastructure private sector Government participation in Gap Infrastructure resources infrastructure The goal is to combine the best capabilities of the public and private sectors for mutual benefit 7 7
PPP Framework ▪ Establishes the Infrastructure Concession Regulatory Commission (ICRC) Sectio ion 14 14.1 ▪ Ministries, Department & Agencies (MDAs) may enter into a contract with or grant concession to any duly pre-qualified private sector project proponent for the financing, construction, operation, and maintenance of any infrastructure of the Federal Government. (Section ction 1.1) ▪ Empowers the ICRC to: ▪ Provide general policy guidelines, rules and regulations. ▪ Take custody of every concession agreement entered by the Federal Government ▪ Ensure efficient execution of any concession agreement or contract entered by the Federal Government . MANDATE OF THE ICRC – ICRC Est. Act 2005
PPP Framework What ICRC Does… • Pre Contract Regulation by: • Ensure Bankability of PPP Projects • Policy, Guidelines, Regulations, and Capacity Building • Post Contract Regulation by: • Monitoring projects and ensuring compliance with contracts What ICRC Does Not Do… • Project Initiation – Govt Agency responsibility • Determine Output Requirements – Govt Agency responsibility • Serve as Contracting Authority – Govt Agency responsibility • Approve Projects – Cabinet responsibility
PPP Framework The Key PPP Principles Being Driven By ICRC Value for Money Ensure project appraisals take into account not only cost but also risks and service quality Public interest Adequate and prior consultation with stakeholders. Output requirements The Concept of “verifiable service standards ” to be used as basis for output or performance based specifications. Transparency Transparency in all procurements is key requirement of the law. Other PPP Principles Being Driven By ICRC Risk allocation Risks allocated to the party best able to manage them. Competition The law requires that no project is procured without subjecting it to competition. Capacity to deliver Ensure Project Proponents wishing to partner with government to deliver and operate infrastructure have the capacity to handle the responsibility.
PPP Framework PPP LIFECYCLE in line with National ▪ Projec ect t Identific tificatio ation Policy Pr Preliminari liminaries es ▪ Projec ect t Prioriti ritization tion ▪ Proj ojec ect t Selectio ection Development Phase Implem emen entatio tation n Phase se Procurement Phase • Transaction Adviser • Transaction Adviser • Needs Analysis • Eoi/RFQ Phase AND RFP • Ppp Options Appraisal • Independent Engineer • Bidding • Value For Money • Monitor Design And • Bidders Conference • Affordability • Construction • Bid Evaluation • Sustainability • Commissioning Test • Value For Money Test • • Prelim Risk Matrix Verify Output • Preferred Bidder • Viability/Bankability • Requirements • Full Business Case • Vgf • Contract Management • By FEC • Obc Obc Approval By FE C • PPP LIFECYCLE in line with National PPP Policy
PPP Framework Solic icite ted Route te • Well prepared bankable projects to Market • Transparent and Competitive Bidding • VGF and Government Funding Support Available • Timely Financial Closure Required Unsolicit licited ed Route te • Bankable OBC by Project Proponent • Must be part of strategic plan of government or MDA • Indicative Funding Available • Subject to Competition via Swiss Challenge etc • No Government Funding Support PPP PROCUREME EMENT T ROUTES ES
Sector Review & Opportunities The maritime industry is a key sector of the Nigerian economy. As an oil producing and exporting country, as well as a consumer nation, the country is a large market for foreign Sea Ports and goods, owing to its population Marine Services Over 56% of the Nigerian populace (have no access to grid electricity and those who are connected to the grid face substantial power interruptions. Systemic issues affect all phases Power Sector of the power value chain from generation to distribution thereby forcing Nigerians to rely on self-generation. Civil aviation is a critical element in Nigeria's transportation system and indeed its economy. Nigeria has twenty (20) airports and many regulated airstrips and heliports; 23 active Aviation domestic airlines; Nigeria is an important destination for over 22 foreign carriers. Nigeria Concessions currently has Bilateral Air Services Agreements with over 78 countries. Population growth and urbanization makes rapid urban infrastructure expansion such as Urban and additional roads, electricity, potable water, drainages, and sewer lines an imperative District Engineering Infrastructure
Sector Review & Opportunities Social Infrastructure (Housing, Health and To improve access to education, affordable housing and health care outcomes via public-private partnerships Education) Information To improve broad band IT access to low income and deprived areas Technology • Bring shipping services to the door step of shippers across the nation. • Assist in decongesting the seaports and make them more user friendly Inland Container • Provides the impetus to revive and modernise the railway as a primary mode for long distance haulage. Depot (ICDs) • Facilitate cargo movement to hinterland locations as well as transit cargoes to landlocked countries.
Active PPP Projects Sector Project Energy 7 Agriculture/Irrigation/Dam 9 Urban Infrastructure 8 Roads/Bridges 12 Seaports & Inland Container Depot 2 Railway (Green Fields) 1 Social Infrastructure (Stadia) 2 Health 1 Media 6 TOTAL 48 15
Active PPP Projects MMA2 Airport Concession Project Name MMA2 Airport Concession Sector Aviation Department/ Ministry FAAN/FMOT Implementing Agency Federal Airports Authority of Nigeria (FAAN Location Lagos Estimated Capital Cost ⎕ < $10m ⎕ $11-50m ⎕ $51-100m ⎕ $101-200m ⎕ $201-300m ⎕ $301-400m ⎕ $401-500m ⎕ > $500m Revenue Sources ⎕ Users ⎕ Purchase Agreement ⎕ Government Payments The 1 st PPP airport (BOT contract) between the Federal Airports Authority of Nigeria Background (FAAN) and Bi-Courtney Limited (BCL) The project has been delivered and is being implemented Note Successfully delivered PPP project Project Contact Federal Airports Authority of Nigeria MMA2 AIRPORT CONCESSION
Active PPP Projects 17
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