[FILES] Head of Service of the Federation, Winifred Ekanem Oyo-Ita
Exporters are also being impacted across the country, with traffic delays and gridlocks at access routes adding to haulage costs and, in the case of agricultural products and other perishables, causing damage and quality concerns. The loss of human lives too cannot be quantified.
To meet the need for infrastructure improvements, the governments at various levels are looking at various options of infrastructure financing. From applying for loans or credit facilities, offering bonds and concessions, Federal, state, and local governments are frantically looking into the best options of infrastructure financing in the face of inflationary trends.
The concept of public-private partnership (PPP) developed gradually in Nigeria and became prevalent towards the end of the 1990s. This has been linked to the end of military rule and the civilian government’s need to make substantial investments to close the infrastructure gap owing to years of neglect. From 1999, the private sector started engaging with successive governments in a more systematic manner.
This is also attributed to the Public Enterprises (Privatisation and Commercialisation) Act, which was passed in 1999. The Act establishes the National Council on Privatisation and the Bureau of Public Enterprises (BPE) as the supervisory and implementing agencies respectively for privatisation and commercialisation transactions. A broad look at privatisation shows that it involves all forms of PPP because measures are adopted for the transfer of certain economic activities from the public sector to the private sector. However, the Privatisation and Commercialisation Act only applies to the full or partial privatisation and commercialisation of the list of public enterprises set out in it and not to any PPP transaction that is primarily ‘greenfield’.
The Infrastructure Concession Regulatory Commission Act (ICRCA) was also enacted in 2005 and the
Infrastructure Concession Regulatory Commission (ICRC) was established in 2008 as the agency charged with supporting the Federal Government’s drive towards the PPP model to fund much-needed infrastructural projects, including those that are “greenfield”.
Common types of PPP transactions in Nigeria are service contracts, management contracts, concessions, and leases.
The build-operate-transfer variations are also commonly used in Nigeria, including design-build-finance-transfer, build-operate-own and design-build-finance-operate models.
However, while concession is popular with the government in the country, the way and manner successive governments approve and terminate concession agreements after firms have sunk lots of loans and personal funds into sealed projects are alarming! As it were, the government has nothing to lose despite the clauses provided for dispute resolutions. You can’t fight the government, this is the maxim of government officials.
One of such concession agreements is the one entered by the Oyo State Government with a contractor, ENL Consortium Limited, in respect of the Ibadan Circular Road project. The firm is the concessionaire of the 32-kilometer East End Wing of the 107-kilometer proposed Ibadan Ring Road under the terms of a concession agreement dated August 25, 2017, under the late former Governor Abiola Ajimobi. It was awarded for a sum of N67 billion on a Build Operate and Transfer (BOT) basis for 35 years.
The state government recently re-awarded the project to another firm, in spite of the continued validity of its concession rights in accordance with the concession agreement. The contractor claimed that the re-award of the project was unlawful and politically motivated, insisting that the move was an attempt to “expropriate the assets and contractual rights of ENL, contrary to the terms of the subsisting concession agreement and the Constitution of the Federal Republic of Nigeria 1999 (as amended)”.
ENL claimed that the responsibility for financing the project was placed entirely on it. Since it was awarded the Concession Rights in 2017, it has, at its own cost, undertaken various activities in furtherance of the project, including commissioning of the survey and construction designs (incorporating bridges, culverts and the drainage system) for the 32-kilometre road; clearing and removal of the topsoil from about 30 kilometres of the route; The firm alleged it has expended over N3,960,000,000 of its own private capital on the project despite the move by the current Oyo State administration.
However, while a dispute such as this lingers, the firm suffers, interests on loans obtained from banks continue to increase and workers employed by such concessionaires are thrown out of jobs. Now, who suffers when such PPP or concession deals go awry? It is the investor and the workers.
This is why Nigerians are urging the Infrastructure Concession Regulatory Commission Act (ICRCA) and the Infrastructure Concession Regulatory Commission (ICRC) to protect concessionaires from undue termination of deals legally signed between all levels of government and concessionaires because when the chips are down, they suffer more than the governments.
*Adewuyi is a Lagos-based veteran journalist and corporate communication consultant.