Transcript Emerging Legal and Regulatory Framework for PPPs in NIgeria

Section on Business Law Conference
Emerging Legal and Regulatory Framework
For Public Private Partnerships in Nigeria
Ayuli Jemide, Lead Partner.
4/8/2015
AYULI JEMIDE, Lead Partner,
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OUTLINE
o Preamble
o Review of Existing legal
and regulatory
framework Concessions
in Nigeria
o Conclusion
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Is there a legal framework?
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Here is the catch:
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Infrastructure Concession Regulatory
Commission Act 2005
Public Procurement Act 2007
Public Entp. (Privatization &
Commercialization) Act 1999
Utilities Charges Commission Act 1992
Land Vesting Title Act
National Inland Waterways Authority Act
Highways Act 1971
The Lagos State Roads, Bridges and
Highway Infrastructure Law 2005.
Federal Roads Maintenance Agency Act
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Infrastructure Concession
Regulatory Commission Act 2005
o S 36 defines Concessions:
"Concession" means a contractual arrangement
whereby the project proponent or contractor
undertakes the construction, including financing of
any infrastructure, facility and the operation and
maintenance thereof and shall include the supply of
any equipment and machinery for any
infrastructure and the provision of any services.
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Incomplete definition?
Makes no mention of:
 The Asset to be concessioned
 The Term
 Expectation of service deliverables in
exchange for the Concession
This definition seems generic.
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 Is the ICRC Act meant for only
Concessions or all forms of Public
Private Partnerships?
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ICRC Act – Short title
 “An Act to Provide for private sector
participation in the development financing,
construction, operation or maintenance of
federal infrastructure or development projects
(by whatever name called) through Concessions
and contractual arrangements”
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ICRC Act
Established the Infrastructure Concession
Regulatory Commission to:
 regulate,
 monitor and
 supervise
the contracts on infrastructure or development
projects
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Section 1 – ICRC Act
 Grants any Federal Government Agency the right
to grant concessions and enter into similar
contracts
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Section 2 - 14
Provides for interalia:
 Bidding rules
 Special Concession Account
 No Arbitrary variation or cancellation of agreements
 No guarantees by Federal Agency without FEC
approval
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ICRC Act
 Commission is expected to come up with its own
Regulations once it comes on stream.
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Public Procurement Act 2007
“This Act establishes the National Council on Public
Procurement and the Bureau of Public
Procurement to “monitor and oversee” public
procurement and to “regulate and set standards”
for public procurement in Nigeria.
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Highlights of the PPA
 Lays down procedures for transperancy and
probity in public procurement.
 “No objection certificate” required before Fed.
Exec. Council approval.
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 Is Concession a “Procurement”?
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1st SCHOOL:
Concession is NOT a “Procurement”
a)
“Procurement” in the strict sense means
“purchases” and in Concessions Govt is buying
nothing.
b) The PPA scope of “goods”, “works” and
“services” does not include concessions
c) PPP’s take the highest bid whilst a procurement
seeks the lowest bidder.
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2ND SCHOOL:
Concession is within Procurement Act
a) In all Public Private Partnership (of which
Concessions form a type) Governments are buying
the provision of a public service by trading an Asset
for a given period.
b) Concessions would arguably fall under “works” as
defined in the PPA – “all works associated with
construction, reconstruction, demolition, repair or
renovation of a building, structure or works .......... as
well as services incidental to construction ..........and
similar services pursuant to the procurement contract,
where the value of those services does not exceeed
that of the construction itself”
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2nd school contd.
c) With Management Concessions it may fall under
“services” defined by the PPA as “rendering by any
contractor or supplier of his time and effort and
includes any object of Procurement other than
goods, works and construction”
d)
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PPA deals with with “Disposal of Public Property” Section 55 Part X.
Section 53(2) states that in such cases the
disposing entity shall be treated as the procuring
entity for purposes of this Act.
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Which way would you go?
You may decide when advising a client
to be either:
Cautious & complaint
or
Debative & Combative
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Public Entp. (Privatization &
Commercialization) Act 1999
 Sets up the Bureau of Public Enterprise (BPE)
 Power to privatize or commercialize certain Federal
Government entities listed in the Schedule to the Act.
 Concession is one of the modes adopted by BPE –
e.g Port and Airport Concessions.
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Limitations of the Act
 It works on a concept of “shareholding in
Federal Government entities” and is limited to
the list of entities approved by Statute.
 Would Roads for example fall into this
category?
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Utilities Charges Commission Act 1992
 Established a Utilities Charges Commission that
regulates prices on certain utilities.
 Regulates Price fixing between the Concessionaire
and the Government agency in certain instances:
 Nepa, Nitel, NNPC, Nigerian Airways, Nigerian
Railway Corporation, Ferry Services Organizations,
Nigerian Ports Authority, Road Transport
Organizations, Nipost and such others as
Commission determines from time to time.
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Land Vesting Title Act
1975
 All land reclaimed from Inland Waterways is
the property of the Federal Government.
 Therefore this Act clearly prohibits a State or
Local Government from purporting to grant a
Concessionaire ownership of land reclaimed
from the Lagoon in the course of the project.
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The Act is in dispute?
Oba Yekini Adeniyi Elegushi & Ors v Attorney
General of the Federation and others. 2000
case.
– Fed High Court. (FHC/L/CS/669/95
Challenged the validity of the Land Vesting
Title Act.
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National Inland Waterways Authority Act
 Inland Waterways are vested in the Federal
Government – National Inland Waterways Authority.
(NIWA)
 reclaiming land from any Lagoon requires written
consent of the NIWA.
 Concession relates to a bridge or a motorway over an
inland waterway, the National Inland Waterway
should be on your radar.
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Highways Act 1971
 Section 2 of the Highways Act
Empowers the Minister for Transportation to build
Toll gates, operate and collect Tolls on Federal
Highways .
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Lagos State Roads, Bridges and Highway
Infrastructure Law 2005.
 Enacted by the Lagos State as the legal framework
for Concession on Roads in Lagos State.
 It is the framework for the Lekki–Epe Corridor Road
Concession.
 The only specific Road Concession Law in Nigeria.
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Federal Roads Maintenance Agency
Act 2002
 Established FERMA
 Section 8(a) and (b) that:
“ FERMA shall enter into road concession contracts
for the purpose of executing relevant projects as
well as set guidelines for the working of concession
contracts”
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Was it a worthy catch?
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Conclusion.
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Expectations & Hopes
 ICRCA guidelines may add more flesh
 Subject matter specific PPP regulations may be
enacted
 Case Law may bring expansion
 The law and “practice” will develop with more PPP’s
coming on stream
 Competition Laws may contribute to the PPP legal
framework
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THANKYOU
FOR
LISTENING
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