Transcript Slide 1

(I C R C)
PUBLIC PRIVATE PARTNERSHIP
THE NIGERIAN EXPERIENCE
PRESENTED AT THE CAPACITY BUILDING PROGRAMME FOR PPP IN INFRASTRUCTURE
CHIEDU NDUBISI
TECHNICAL ADVISER TO THE DIRECTOR GENERAL
INFRASTRUCTURE CONCESSION DELIVERY COMMISSION
Mbamene, Swaziland . July 2012
Infrastructure Concession Regulatory Commission
(I C R C)
Presentation Outline
1. Nigerian - A Background
2. Infrastructure Development in Nigeria
3. Nigerian PPP Experience
4. Challenges & Mitigation
5. Conclusion
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Infrastructure Concession Regulatory Commission
(I C R C)
1.1 Nigerian - A Background
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Infrastructure Concession Regulatory Commission
(I C R C)
1.2 Nigerian - A Background
… Macro Economic Indicators
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Infrastructure Concession Regulatory Commission
(I C R C)
2.1 Infrastructure Development in Nigeria
… Traditional Funding of Infrastructure
Traditionally, government has been the sole financier of infrastructure
projects and has often taken responsibility for implementation,
operations and maintenance as well.
Budgetary financing are often:
 Volatile and rarely meet crucial infrastructure expenditure requirements
in a timely and adequate manner
 Exerts constant pressure on fiscal budget due to competing demands
 Funding generally inadequate
 Receives a larger brunt of fiscal retrenchment in times of financial
crises
 Greater the potential for mismanagement and unwholesome practices
 Leads to lower quantum and quality of infrastructure.
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Infrastructure Concession Regulatory Commission
(I C R C)
2.2 Infrastructure Development in Nigeria
… Consequences
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Infrastructure Concession Regulatory Commission
(I C R C)
3.1 Nigerian PPP Experience
… Legal & Regulatory Environment
Establishment of the Infrastructure
Concession Regulatory
Commission. (Sec 14. 1)
Provides general policy guidelines,
rules and regulations.
Take custody of every concession
agreement.
Ensure efficient execution of any
concession agreement or contract
entered by the Federal Government.
MDAs may enter into a contract with
or grant concession to any duly prequalified private sector proponent
for the financing, construction,
operation, and maintenance of any
infrastructure that is financially
viable or any development facility of
the Federal Government. (Section
1.1).
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Infrastructure Concession Regulatory Commission
(I C R C)
3.2 Nigerian PPP Experience
… PPP Life Cycle
Development Phase
Procurement Phase
Implementation Phase

Needs Analysis

Transaction adviser
1. Technical Adviser

PPP Options appraisal

EoI and RFP
2. Project Monitoring

Value for Money

Bidding
3. Commissioning Test

Affordability

Bidders Conference
4. Verify Output

Sustainability

Bid Evaluation

Prelim Risk Matrix

Value for Money Test

Viability/Bankability

Preferred Bidder
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VGF assessment
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Full Business Case
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OBC approval
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FEC Approval
Requirements
5. Contract management
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Infrastructure Concession Regulatory Commission
(I C R C)
3.3 Nigerian PPP Experience
… PPP Project Pipelines
PPP Project Pipeline
Min of Works
Min of Power
2%
2% 2%
2%
2%
2%
2%
FCTA
2%
FERMA
22%
NPA
Min of Environment
5%
Min of Water Resources
5%
15%
5%
Min of Interior
FMA
SMEDAN
5%
10%
7%
Nat. Automotive Council
Nat. Inland Waterway Authority
7%
Nig. Railway Corporation
Min of Defence
NIMASA
Min of Agric
Min of Petroleum Res.
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Infrastructure Concession Regulatory Commission
(I C R C)
3.4 Nigerian PPP Experience
… Other Govt Initiatives
Review of legal, regulatory and institutional environment ongoing
Comprehensive programme of capacity building with support of WB, DFID,
AfDB in place. (Headline Presidential Retreat Held)
Collaborating with NPC to restore planning culture....to be supported by
legislation
Collaborating with CBN, Bankers Committee, DMO, PENCOM etc to catalyse
the dev. of long term financial instructments for PPP.
Colloborating with FMF to establish a VGF scheme to enhance PPP projects
bankability.
Colloborating with state govts to establish similar subnational frameworks to
ensure a robust and coherant PPP market nationwide
Putting in place a coherent and effective communications strategy to ensure
effective and sustained stakeholder interface and to facilitate flow of
information to all key players via – Roadshows, Electronic Platforms ie. www
& other networks
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Infrastructure Concession Regulatory Commission
(I C R C)
4.1 Challenges & Mitigation
… Issues and Challenges
Having reviewed some of these projects, some of the issues and
challenges include:
 Lack of national infrastructure blueprint;
 Unclear political direction and support;
 Weak regulatory and enforcement powers of ICRC;
 Inadequate financial modelling to enable proper affordability and
value for money assessments;
 Technical capacity gaps;
 Lack of institutional framework for PPP project preparation;
 Inconsistency in the PPP Project Pipelines;
 Legacy concessions.
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Infrastructure Concession Regulatory Commission
(I C R C)
5.1 Conclusion
 Undoubtedly, Nigeria’s infrastructure deficit has stymied its economic
growth, restricted productivity and limited its competitiveness.
 Governments all over the world have come to recognize that the
collaboration between public and private sectors is crucial to securing
dependable and sustainable funding
 For PPPs to work:

it is absolutely vital that all PPP projects be developed and
procured in line with the National Policy on PPP (N4P) and MDAs

MDAs must make adequate provisions in their annual budgets for
the cost of project development which should be in the range of 3
- 5% of the estimated project cost.

unsolicited projects must be in line with MDAs investment plan
and follow procedures
 The financial sector including the capital market could quickly
organize themselves to exploit this emerging opportunity
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Infrastructure Concession Regulatory Commission
(I C R C)
5.2 Conclusion
 Successful PPP are characterized by:
 thorough planning, detailed studies and analyses of lifecycle
costs and revenues
 good communication, strong commitment from all parties
 guided by open and transparent process and procedures.
 PPP projects must be selected from a coherent infrastructure
investment programme anchored in an integrated National Plan
 PPP contract agreements involve long-term commitments. As such
 They are also complex, often involving many parties and
significant risks.
 Approached with great care, due diligence and a deep sense of
responsibility and accountability.
 PPP arrangements involving long term relationships. As such:
 There must spirit of genuine partnership, and a commitment to
work for a win-win situation
 full disclosure and sharing of information and concerns.
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Infrastructure Concession Regulatory Commission
(I C R C)
Investment in Pace with Demand
Human Capital Development
Coherent Planning Framework
Institutional Framework & Capacity
Legal and Regulatory Framework
Policy; Objectives; Roadmap
5.3 Conclusion
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Infrastructure Concession Regulatory Commission
(I C R C)
THANK YOU
CHIEDU NDUBISI
Technical Advisor to the Director General
Infrastructure Concession Regulatory Commission
Plot 1270, Ayangba Street, Area 11, Garki, Abuja, Nigeria
Phone: +234 (9) 4604900/+234 (9) 8750286
Email: [email protected]
Website: www.icrc.gov.ng
Infrastructure Concession Regulatory Commission
(I C R C)