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INFRASTRUCTURE INVESTMENT OPPORTUNITIES for THE NIGERIA CENTENARY CITY AND ROAD INFRASTRUCTURE BUSINESS IN NIGERIA. Presented By: AMBASSADOR BASHIR YUGUDA Honourable Minister of State for Works At PARTNER III G20 AFRICA INFRASTRUCTURE INVESTMENT CONFERENCE,

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slide1

INFRASTRUCTURE INVESTMENT OPPORTUNITIES

forTHENIGERIACENTENARY CITY ANDROAD INFRASTRUCTURE BUSINESS IN NIGERIA

Presented By:

AMBASSADOR BASHIR YUGUDA

Honourable Minister of State for Works

At

PARTNER III G20 AFRICA INFRASTRUCTURE INVESTMENT CONFERENCE,

Millennium Hotel, Mayfair, London / House of Lords, LONDON

July 18th 2013

17th – 19th July, 2013

FMW

nigeria s economic blueprint the vision 20 2020
Nigeria’s Economic Blueprint: The Vision 20:2020
  • Making the Nigerian economy one of the top 20 by the year 2020 with a GDP of USD900bn
  • Attracting US$130billion private capital over the next 10 years
  • Optimising key sources of economic growth by enhancing production for real sector’s competitiveness and for exports
  • Guaranteeing productivity by strengthening linkages between key sectors of the economy
  • Fostering sustainable social and economic development by ensuring national security and enhancing infrastructure.

FMW

nigeria s economic performance indicators
Nigeria’s Economic Performance Indicators
  • The External Reserve as at June 2013 stood at US$48.76 billion.
  • The IMF projects a 7% growth in Nigeria’s growth for 2013 in its country report .
  • External Debt Profile with ample fiscal space
    • US$5.91 billion – 2013
  • Industrial Capacity Utilisation – Over 50% (1st Half 2013)

FMW

Sources: CBN, DMO,NBS

slide4

Global Real GDP Growth – 2011 & 2012

Nigeria has maintained an average growth of about 7% in the last three years

BRICs

High Income

While World GDP continues to shrink, Nigeria is expected to sustain its growth at about 7%

FMW

Source: World Economic Outlook 2012

world s fastest growing economies 1
World’s Fastest Growing Economies - 1

Source: National Bureau for Statistics (NBS)

FMW

slide6

World’s Fastest Growing Economies - 2

Nigeria’s economy is rated as the world’s topmost ‘global growth generator’ (3G) of the next 40 years ........ CIRA

FMW

Citi Investment Research and Analysis

nigeria s economy too large to ignore
Nigeria’s Economy: ‘too large to ignore’
  • 8th largest population in the world – over 167 million people
    • 4th largest population under the age of 20
  • 10th world largest reserves of oil and gas
    • 36.2 billion barrels of oil
    • 184 trillion Cubic Feet of natural gas
  • 4th largest equity market in the MSCI Frontier Market index
    • Largest outside of the Gulf Cooperation Council (GCC)
  • 5th fastest growing economy in 2010 covered by Citi Investment Research and Analysis (CIRA) economists – China, Taiwan, Singapore & Qatar
  • 1st among the N-11 leading ‘global growth generators’ (3G) over the next 40 years
    • Prospects of growing its global GDP share to 2.5% in 2050, overtaking Italy, France, and UK
  • Home to emerging world’s largest cement companies

- The DANGOTE GROUP

FMW

the nigeria centenary city project
THE NIGERIA CENTENARY CITY PROJECT
  • One of the endearing legacies of the Nigeria Centenary celebration shall be the development of a Centenary City in Abuja the Federal Capital from 2014.
  • The City is conceived to be developed over 1000 hectares of land to focus the attention of the investing world to Nigeria in a way that has never been done before.
  • The successes of such cities as Dubai, Monaco, Shenzhen, Singapore and lately Songdo have shown that development of certain class of cities is the strongest social, political and economic tool to securing Foreign investment, promoting positive international attention and indeed signalling a new economic awakening.
  • The City promises to be one of the most outstanding legacies of the Centenary.

FMW

the abuja centenary city
THE ABUJA CENTENARY CITY
  • A GREEN CITY – with a natural buffer that envelopes the entire City and encircles the central neighbourhood that protects and nurtures the whole world-class public facilities;
  • ZERO WASTE MANAGEMENT – The city will aim at reducing waste to zero. Domestic waste will be used to create nutrient-rich soil, fertilizer and incinerated as an additional power source. Other wastes such as plastics and metals will be recycled or re-proposed for the other uses;
  • A CENTRAL PARK – that provides the green-spirit which gives orientation, clarity and iconic power to the City as a whole but most powerfully to the City Centre.
  • FLEXIBLE TOPOGRAPHIES – that are all conceptually related to one another so that they can be placed together to create a rich, elegant, textured and vibrant City.
  • AN URBAN GRID – super-block system that is modular and organic yielding a resulting grid of arteries, streets and pathways with and efficient traffic system where pedestrians, bicycles, motorcars, trams and monorail can co-exist in a friendly human way;

FMW

the abuja centenary city1
THE ABUJA CENTENARY CITY
  • INDEPENDENT POWER SOURCE – With a gas-fired 500MW power plant connected directly to a gas terminal, constant power supply to the City can be taken for granted.
  • WATER MANAGEMENT – Planned in an environmentally sound manner where approximately 60 percent of the water used will be recycled and waste water reused as many times as possible.
  • PUBLIC AREAS – A prominent cultural core with various symbols of Nigeria’s Unity and Strength, Parks, Galleries etc.
  • COMMERCIAL – Exquisite Office Tower, Exotic Hotel, Magnificent Shopping Malls, Imposing Expo/Convention Centre, Cosy Theatres and Cinemas;
  • RESIDENTIAL – Elegant High-rise Apartment & Apartment Towers, Single Family Houses, Semi Detached Houses, Row Houses, Apartment Blocks;
  • CIVIC – Primary & Secondary Schools, University Campus, Health Centres, Health Farms and Theme Parks;

FMW

the abuja centenary city2
THE ABUJA CENTENARY CITY
  • INSTITUTE OF SPORTS – Sports shall be given prominence in the City with the top-of-the range sporting facilities, which shall include a signature golf course.
  • SPORTS HOSPITAL – A modern sports hospital that will be on the cutting edge of sports medicine and providing 5-star level services The Sports Hospital will offer state-of-the-art diagnostic tools and services.
  • BUSINESS CENTRE – A preferred destination for multi-national and domestic businesses. It is expected that the top most corporate bodies in Nigeria will have their show rooms in the City.
  • PRESIDENTIAL ARCHIVES – To house the history of our political development and the contributions of our Presidents and the Nigerian Institute of Federalism.
  • A NEW CEREMONIAL ARCADE (UNITY SQUARE) – To compliment the Eagle Square to add colour to the Government ceremonies and activities.

FMW

the abuja centenary city3
THE ABUJA CENTENARY CITY
  • NEW ABUJA CITY GATE – A magnificent and awe-inspiring architectural masterpiece that will eloquently introduce the Centenary City and welcome visitors to Abuja.
  • With a five year development period,theCity is planned for a residential population of about 100,000 people but to host about 500,000 visitors daily. It shall promote world- class multinational and domestic businesses in a world-class and master planned environment that gives meaning to Life, energy for Work and pleasure and greatness into the next centenary.

FMW

the abuja centenary city4
THE ABUJA CENTENARY CITY
  • Features that have been contributed to the success of other cities of this nature include:
  • Trade Free Zone • Duty Free Regime • Tax Holiday • Chartered Status • Offshore Status • Outstanding Infrastructure and secured business environment • Expanded and efficient transport services especially Air Services • Secured Environment etc.

FMW

section 2
SECTION 2
  • A PRESENTATION ON THE INVESTMENT OPPORTUNITIES IN THE NIGERIA ROAD SECTOR

FMW

introduction
INTRODUCTION
    • The total road network in Nigeria is estimated at about 200,000km and owned & managed as follows:

Federal Government - 17% (Over 34,000Km)

States - 16% and

Local Governments - 67% of the road network respectively.

  • In Nigeria, the road sector accounts more than 80% of of all freight and passenger movements, thus underscoring their crucial importance to the economy of the country.
  • The Federal roads have been subjected to severe pressure as a result of increased vehicular traffic as well as freight especially given the near absence of rail, marine and other forms of transport to convey heavy goods.

FMW

introduction contd
INTRODUCTIONcontd.
  • Funding road infrastructure projects remains a major constraint in the delivery of efficient and improved road networks across the country.
  • On an average, the annual funding requirement is estimated at N500b (US$3.125b) against an average budgetary allocation of N120bn (US$0.75b) with a deficit of N380bn. (US$3.375b)
  • The deficit is evident to have negative consequences on the development of road infrastructure undermining national economic growth.
  • Huge capital resources are needed for sustainability of this huge network which cannot be met by Government hence need for Private Sector involvement via PPP and concessionary loans.

FMW

road infrastructure business opportunities in nigeria
ROAD INFRASTRUCTURE BUSINESS OPPORTUNITIES IN NIGERIA
  • The Federal Ministry of Works has developed Outline Business Cases (OBC) for viable and bankable major highways (brown fields) in the nation to attract private sector participation and direct foreign investments into the sector.
  • For other Greenfield road projects, opportunity also exists like proposed “Strategic Highway Investment for Transformation (SHIFT)”
  • The appropriate framework for Public Private Partnerships (PPP) in Nigeria is already in place - Establishment of the Infrastructure Concession Regulatory Commission (ICRC) and development of National Policy on PPP.

FMW

investment opportunities by public private partnership ppp initiatives1
INVESTMENT OPPORTUNITIES BY PUBLIC PRIVATE PARTNERSHIP(PPP) INITIATIVES

FMW

slide24

HIGHLIGHTS ON THE INVESTMENT OPPORTUNITIES BY PUBLIC PRIVATE PARTNERSHIP(PPP) INITIATIVES: ENUGU – PORTHARCOURT DUAL CARRIAGEWAY

  • The Enugu-Port Harcourt Road is located within the South East and South South Zone of Nigeria.
  • The road lies between Longitude 07° 00’E and 08° 00’E and Latitude 04° 30’N and 06° 30’N
  • The Road alignment is part of Route A3 which traverses the South South through the North Central to the North Eastern part of Nigeria.
  • The section of the road under consideration is 210km long and links the oil rich Niger Delta and sea port in Port Harcourt to the Northern part of the country via the South Eastern States of Nigeria.

FMW

slide25

HIGHLIGHTS ON THE INVESTMENT OPPORTUNITIES BY PUBLIC PRIVATE PARTNERSHIP(PPP) INITIATIVES: ENUGU – PORTHARCOURT DUAL CARRIAGEWAY

  • The existing asphalt dual carriageway is 7.3m wide with 2.75m surface dressed outer shoulders and 1.5m inner shoulder on either side.
  • The pavement structure is made up of laterite sub-base, crushed stone base and asphaltic concrete wearing course.
  • There are about 2 bridges along the road alignment with several culverts and other hydraulic structures.
  • The road has a recorded Average Daily Traffic (ADT) of 9,000 vehicles per day in 2011.
  • The ADT is projected to reach 9,540 vehicles per day in the year 2012. The condition of the road can be described as poor.
  • Studies/Reports to embark on the PPP project has been commissioned.
  • Feasibility and Viability studies have been completed and Outline Business Case (OBC) substantially completed.

FMW

slide26

MAP OF NIGERIA SHOWING LOCATIONS OF PIPELINE PPP PROJECTS

KADU NA-KANO

DUAL CARRIAGEWAY

ABUJA-KADUNA

DUAL CARRIAGEWAY

BRIDGE OVER RIVER

BENUE AT IBI

RIVER NIGER BRIDGE

AT NUPEKO

RIVER KATSINA ALA

BRIDGE AT BURUKU

MURTALA MOHAMMED

INT‘L AIRPORT ROAD

2ND NIGER BRIDGE AT

ONITSHA/ASABA

LAGOS-BADAGRY-

SEME BORDER ROAD

ENUGU-PORTHARCOURT

ROAD

FMW

41

investment opportunities of pipeline ppp projects1
INVESTMENT OPPORTUNITIES OF PIPELINE PPP PROJECTS

KANO

FUNTUA

ZARIA

BIRNIN GWARI

KAD

SAMINAKA

JOS

MINNA

MOKWA

BIDA

ABUJA

ILORIN

LAFIA

OGBOMOSHO

LOKOJA

OSHOGBO

MAKURDI

IBADAN

OTUKPA

LEGEND

ORE

PROPOSED GOLDEN (ECONOMIC) TRIANGLE SUPER-HIGHWAY (4 ABOVE)

LAGOS-KISHI-KAIMA

ROAD

BODO/BONNY ROAD

ENUGU

BENIN

LAGOS

ONITSHA

OKIGWE

WARRI

OTHEF HIGHWAYS: 1,2 & 3 ABOVE

UMUAHIA

2ND LAGOS OUTER

RING ROAD

WARRI

OWERRI

ABA

YENAGOA

PORTHARCOURT

FMW

slide29
HIGHLIGHTS ON THE MAJOR HIGHWAYS INVESTMENT OPPORTUNITIES:LAGOS-ISEYIN-KISHI-KAIAMA-BAHANA-BODE-KAOJE-GWANBE-FOKKU-SOKOTO ROAD

● The Lagos – Iseyin– Kishi– Kaiama– Bahana– Bode – Kaoje – Gwanbe – Fokku – SokotoRoad is located within the South West, North Central and North West Zone of Nigeria.

● The road lies between Longitude 02° 00’E and 05° 30’E and Latitude 06° 00’N and 13° 30’N.

● The Road is divided into Two Sections:

  • Section I: Badagry-Iseyin-Kishi-Kaiama (414.4km);
  • Section II: Kaiama-Babana-Kaoje-Gwambu-Fokku-Jega-Sokoto (631km)

● The road under consideration links Lagos the economic nerve centre of Nigeria to North Central and North West parts of the country.

FMW

slide30
HIGHLIGHTS ON THE MAJOR HIGHWAYS INVESTMENT OPPORTUNITIES:SECTION I: Badagry-Iseyin-Kishi-Kaiama - 414.4km
  • The existing carriageway varies from 6m to 7.3m wide with shoulders of an average width of 1.5m.
  • The pavement structure is made up of laterite sub-base, laterite base and asphaltic concrete wearing course on some sections while other sections are earth roads.
  • The alignment has many sub-standard bridges and hydraulic structures.
  • The road has a recorded Average Daily Traffic (ADT) of 9,000.00 vehicles per day in 2011.
  • The ADT is projected to reach 9,540.00 vehicles per day in the year 2012. The condition of the road can be described as poor.
  • Feasibility and Viability studies have been completed including the Outline Business Case (OBC)

FMW

slide31

HIGHLIGHTS ON THE MAJOR HIGHWAYS INVESTMENT OPPORTUNITIES:SECTION II: Kaiama-Babana-Kaoje-Gwambu-Fokku- Jega-SokotoBadagry-Iseyin-Kishi-Kaiama - 631km

  • The existing carriageway comprises of sections with asphaltic concrete pavement and surface dressed pavements. The width varies from 6m to 7.3m with shoulders of an average width of 1.5m.
  • The pavement structure is made up of lateritic sub-base & base and asphaltic concrete wearing course on some sections while other sections are surface dressed.
  • The alignment consists of 16No. Bridges with many culverts and other hydraulic structures.
  • The road has recorded Average Daily Traffic (ADT) of 5,000.00 vehicles per day in 2011.
  • The ADT is projected to reach 5,300.00 vehicles per day in the year 2012. This is attributed to the poor condition of the road .
  • Feasibility and Viability studies have been completed including the Outline Business Case (OBC).

FMW

highlights on the major highways investment opportunities bodo bonny road in rivers state
HIGHLIGHTS ON THE MAJOR HIGHWAYS INVESTMENT OPPORTUNITIES:BODO-BONNY ROAD IN RIVERS STATE

DESCRIPTION OF THE ROAD:

  • Bodo – Bonny Road has a length of 39km.
  • The road lies between Longitude 07° 30’E and 07° 00’E and Latitude 05° 00’N and 04° 30’N
  • The road links Bodo on the mainland to the industrial Island of Bonny that houses the Liquefied Natural Gas (LNG) factory in Rivers State.
  • It traverses a typical Niger Delta terrain of mangrove swamps and creeks.

FMW

slide33
HIGHLIGHTS ON THE MAJOR HIGHWAYS INVESTMENT OPPORTUNITIES:BODO-BONNY ROAD IN RIVERS STATE: ROUTE CHARACTERISTICS
  • The route traverses through thick forests, swamps and creeks.
  • It is a virgin route with no history of any development.
  • The Project area traverses numerous creeks and rivers, which empty into the Atlantic Ocean.
  • Over 60% of the roadway traverses swampy terrain which is inundated by the daily tidal flow around the area.
  • Contract for construction of the Road had earlier been awarded, but due to paucity of funds, only 20% achievement.

FMW

highlights on the major highways investment opportunities river niger bridge at nupeko

HIGHLIGHTS ON THE MAJOR HIGHWAYS INVESTMENT OPPORTUNITIES:RIVER NIGER BRIDGE AT NUPEKO

The Bridge is located in the North Central Zone of Nigeria in Niger State.

The Bridge lies between longitude 05° 30’E and 06° 00’E and latitude 08° 30’N and 09° 00’N.

The Bridge under consideration is 950m long and links Niger and Kwara States in Nigeria.

FMW

highlights on the major highways investment opportunities river niger bridge at nupeko1
HIGHLIGHTS ON THE MAJOR HIGHWAYS INVESTMENT OPPORTUNITIES:RIVER NIGER BRIDGE AT NUPEKO
  • There is no existing bridge at the current location. Movement of goods and services within the project area are by ferry services.
  • The new bridge is to be constructed as a single carriageway with two lanes and pedestrian walkways.
  • The road has a low Average Daily Traffic (ADT) due to the absence of a bridge at Nupeko to link Niger and Kwara States.
  • Studies/Reports to embark on the PPP project has been commissioned.
  • Feasibility and Viability studies have been completed including the Outline Business Case (OBC).
  • The project has been advertised for concessioning.

FMW

highlights on the major highways investment opportunities river katsina ala bridge at buruku

HIGHLIGHTS ON THE MAJOR HIGHWAYS INVESTMENT OPPORTUNITIES:RIVER KATSINA ALA BRIDGE AT BURUKU

The Bridge is located in the North Central Zone of Nigeria in Benue State

The Bridge lies between Longitude 09° 00’E and 09° 30’E and Latitude 07° 00’N and 07° 30’N

The Bridge under consideration is 880m long and would link Gboko and Zaki -Biam communities in Benue State.

FMW

highlights on the major highways investment opportunities river katsina ala bridge at buruku1
HIGHLIGHTS ON THE MAJOR HIGHWAYS INVESTMENT OPPORTUNITIES:RIVER KATSINA ALA BRIDGE AT BURUKU
  • There is no existing bridge at the current location. Movement of goods and services within the project area are by ferry services.
  • The new bridge is to be constructed as a single carriageway with two lanes and pedestrian walkways.
  • The road has a low Average Daily Traffic (ADT) due to the absence of a bridge at Buruku.
  • Studies/Reports to embark on the PPP project has been commissioned.
  • Feasibility and Viability studies completed with the OBC substantially completed.

FMW

highlights on the major highways investment opportunities river benue bridge at ibi

HIGHLIGHTS ON THE MAJOR HIGHWAYS INVESTMENT OPPORTUNITIES:RIVER BENUE BRIDGE AT IBI

The Bridge is located in the North Central Zone of Nigeria in Benue State

The Bridge lies between longitude 09° 30’E and 10° 00’E and latitude 08° 00’N and 08° 30’N

The Bridge under consideration is 880m long and links Gboko and ZakiBiamcomunities in Benue State.

FMW

highlights on the major highways investment opportunities river benue bridge at ibi1
HIGHLIGHTS ON THE MAJOR HIGHWAYS INVESTMENT OPPORTUNITIES:RIVER BENUE BRIDGE AT IBI
  • There is no existing bridge at the current location. Movement of goods and services within the project area are by ferry services.
  • The new bridge is to be constructed as a single carriageway with two lanes and pedestrian walkways.
  • The road has a low Average Daily Traffic (ADT) due to the absence of a bridge at Ibi town.
  • Studies/Reports to embark on the PPP project has been commissioned.
  • Feasibility and Viability studies completed and OBC substantially completed.

FMW

slide40

HIGHLIGHTS ON THE MAJOR HIGHWAYS INVESTMENT OPPORTUNITIES: 2ND NIGER BRIDGE AT ONITSHA/ASABA IN ANAMBRA & DELTA STATES

The Bridge is located in the North Central and South Eastern Zone of Nigeria ●The Bridge lies between longitude 06° 30’E and 07° 00’E and latitude 06° 00’N and 06° 30’N

The Bridge under consideration is 2km long and links Onitsha in Anambra State to Asaba in Delta State.

FMW

highlights on the major greenfield highways investment opportunities 2 nd lagos outer ring road
HIGHLIGHTS ON THE MAJOR GREENFIELD HIGHWAYS INVESTMENT OPPORTUNITIES: 2ND LAGOS OUTER RING ROAD

FMW

highlights on the major greenfield highways investment opportunities 2 nd lagos outer ring road1
HIGHLIGHTS ON THE MAJOR GREENFIELD HIGHWAYS INVESTMENT OPPORTUNITIES: 2ND LAGOS OUTER RING ROAD
  • CURRENT SITUATION:
  • The Lekki Free Zone (LFZ) has main access with the Lekki - Epe Expressway which joins the coastal road towards the South and has only one entrance facing the Atlantic.
  • Traffic bottleneck exists along Lekki Peninsula/Victoria/Lagos Mainland link road.
  • Most part of LFZ is not directly accessible from the Lekki-Epe Expressway going towards the North.
  • The planned Deep Sea Port & Airport will attract huge traffic/transportation volume that will worsen the already congested Lekki-Epe Expressway.

FMW

highlights on the major greenfield highways investment opportunities 2 nd lagos outer ring road2
HIGHLIGHTS ON THE MAJOR GREENFIELD HIGHWAYS INVESTMENT OPPORTUNITIES: 2ND LAGOS OUTER RING ROAD
  • PROPOSED SOLUTION:
  • Construct a 25Km 4-lane link road from the Lekki-Epe Expressway to the LFZ.
  • Construct a 5th Mainland Bridge consisting of 5.4Km Bridge over Lagoon, 200m Bridge over the Creek and 20.3Km rad length (adoption of 2-lane dual carriageway.
  • Completion of the eastern loop with a 2-lane dual carriageway to link Shagamu – Benin Expressway.

FMW

future plans of the ministry
FUTURE PLANS OF THE MINISTRY
  • BRIDGING THE ROAD INFRASTRUCTURE GAP:-
  • The Federal Ministry of Works has developed a new plan for Green field projects – The Strategic Highway Investment for Transformation (SHIFT) Programme:
    • The Golden Triangle Super – Highway – Conceived to improve the nations economy and to be driven by the private sector.
        • Federal Government to provide the Right of Way (ROW) and offer guarantees in form of Viability Gap Funding (VGF).
    • Paradigm Shift
    • Shift in Institutional Structures
    • Shift in Mechanism for financing roads
    • Shift from Public to Private Sector Management

FMW

golden economic triangle super highway
GOLDEN (ECONOMIC) TRIANGLE SUPER-HIGHWAY

KANO

FUNTUA

ZARIA

BIRNIN GWARI

KAD

SAMINAKA

JOS

MINNA

MOKWA

BIDA

ABUJA

ILORIN

LAFIA

OGBOMOSHO

LOKOJA

OSHOGBO

MAKURDI

IBADAN

OTUKPA

ORE

ENUGU

BENIN

LAGOS

LEGEND

ONITSHA

OKIGWE

WARRI

PROPOSED GOLDEN (ECONOMIC) TRIANGLE SUPER-HIGHWAY

UMUAHIA

WARRI

OWERRI

ABA

YENAGOA

SUPER-HIGHWAY LINKS TO MAJOR CITIES

PORTHARCOURT

FMW

key features of the golden economic triangle super highway
KEY FEATURES OF THE GOLDEN (ECONOMIC) TRIANGLE SUPER-HIGHWAY
  • 4 to 6 lanes entirely new super-highway
  • Connects key hubs of economic activity in the country
  • Within 1hr of 30 cities and state capitals
  • Crosses or within reach of 20 states of the Federation
  • It will add approximately 5,000km to the national network of roads in Nigeria
  • It will ensure the provision of world-class services on public highway facilities as well as attract Real Estate development along the ROW
  • Attraction of Direct Foreign Investment and Private Sector finances with return on investment through tolling (PPP’s)
  • New economies will be created along corridor (e.g. tourism in the coastal alignment)
  • Precedence: High growth economies: China, India, Brazil, Malaysia etc.

FMW

section 3
SECTION 3
  • REGULATORY FRAMEWORK FOR PPPs in Nigeria

FMW

slide51

Key PPP Legislation - The ICRC Act 2005

  • Establishes the Infrastructure Concession Regulatory Commission (ICRC) Sec. 14.1
  • MDAs may enter into a contract with or grant concession to any duly pre-qualified 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).
  • 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.
  • Section 11 (Arbitrary Variation etc) No agreement reached in respect of this Act shall be arbitrarily suspended, stopped, cancelled or changed except in accordance with the provisions of this Act.

FMW

slide52

NATIONAL POLICY ON PUBLIC PRIVATE PARTNERSHIPS

  • Government Commitment
  • Policy Objectives
    • Economic
    • Social
    • Environmental
  • Enabling institutional environment
    • Guidelines for the PPP
    • Coordination and planning
    • Capacity building
    • Effective communication
    • Roles and responsibilities
    • Market development
    • Collaboration with states and other stakeholders
    • Further guidance on Nigerian PPP Manual on ICRC website (www.icrc.gov.ng)

FMW

slide53

PPPs Definition in Nigerian Context

A Public-Private Partnership is a contractual agreementbetween a public agency(federal, state or local) and a private sector entity. Through this agreement, the skills and assetsof each sector (public and private) are sharedin 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 rewardspotential in the delivery of the service and/or facility.

The goal is to combine the best capabilities of the public and private sectors for mutual benefit

FMW

53

why will ppps deliver better value for money for nigeria
Why Will PPPs Deliver Better Value for Money for Nigeria?
  • PPPs let Public Sector and Business do what they do Best!
  • Private
    • Innovation, use of technology
    • Professional management
    • Good project and lifecycle management
    • Efficiency
    • Technology
    • Maintenance practices
    • Financing
  • Public
    • Policy setting
    • National planning
    • Regulation
    • Looking after public interest
slide55

PPP LIFECYCLE in line with National Policy

  • Project Identification
  • Project Prioritization
  • Project Selection

Preliminaries

Procurement Phase

Implementation Phase

Development Phase

TECHNICAL ADVISER

MONITOR DESIGN AND

CONSTRUCTION

COMMISSIONING TEST

VERIFY OUTPUT

REQUIREMENTS

CONTRACT MANAGEMENT

NEEDS ANALYSIS

PPP OPTIONS APPRAISAL

VALUE FOR MONEY

AFFORDABILITY

SUSTAINABILITY

PRELIM RISK MATRIX

VIABILITY/BANKABILITY

VGF

OBC

OBC APPROVAL BY FEC

TRANSACTION ADVISER

EoI/RFQ Phase AND RFP

BIDDING

BIDDERS CONFERENCE

BID EVALUATION

VALUE FOR MONEY TEST

PREFERRED BIDDER

FULL BUSINESS CASE

BY FEC

PREPARING AND IMPLEMENTING EFFICIENT

AND EFFECTIVE PPP TRANSACTIONS

FMW

our ppp s in nigeria are about
Our PPPs in Nigeria are about:

1.Mobilising private sector’s money, expertise and capacities for national infrastructure development

2.Long- term relationship between the government and private sector (usually>10years)

3.Sharing of Risks and Rewards (no lop-sided agreements-privatizing the profits, nationalizing the loses)

4.Private sector performs to agreed KPIs

5.Life cycle focus (operations and maintenance)

Government is moving from role of Developer & Operator to Facilitator (and Governing)

FMW

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WE FOCUS ON BANKABLE PPP PROJECTS TO MARKET

  • IRR > Weighted Average Cost of Capital
  • RoE > Shareholders Requirement
  • Debt Service Cover Ratio > Bankers or Lenders Requirements
  • Loan Life Cover Ratio > Bankers or Lenders Requirements
  • Focus is not just about comparative but competitive advantage !!
  • Viability Gap Funding and Capital Grants
  • Sovereign Wealth Fund – Infrastructure Enabler Investments
  • Ideas don’t get funded bankable projects get funded. We are taking to market projects with robust cashflows and cost reflective returns
  • We are providing an environment where investors will invest, to provide services, recoup their investments without exploiting the masses – HE GEJ

FMW

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Typical BOT Structure

BOT-Toll Road Project

The final responsibility for service delivery continues to remain with the public sector

GRANTING AGENCY

FINANCIERS

Equity Investors

Equity Investors

Concession Agreement

Finance Ris

Lenders, Guarantors Insurers

SPV

FINANCIERS

Equity Investors, Lenders, Guarantors, Insurers

ROAD USERS

Service

Tolls

Design Risk

Construction Risk

Operational RisksTraffic/Revenue & O&M

Demand, Traffic,

Demand, Traffic,

Risk

Risk

Design Consultant

Construction Contractor

O&M Contractor

CONSTRUCTION

DESIGN

CONTRACTOR

CONTRACTOR

CONSULTANT

FMW

the key ppp principles being driven by nigeria
THE KEY PPP PRINCIPLES BEING DRIVEN BY NIGERIA
  • Risk allocation

Risks allocated to the party best able to manage them.

  • Competition

Ensure business activities are subject to competition and appropriate commercial pressures, dismantling unnecessary barriers to entry, and implementing and enforcing adequate competition.

  • Capacity to deliver

Ensure authorities responsible for privately operated infrastructurehave the capacity to manage the commercial processes involved and to partner on equal basis with their private sector counterparts.

  • Value for Money

Ensure project appraisals take into account not onlycost but also risks and service quality

  • Public interest

Adequate and prior consultation with end-users and other stakeholders of an infrastructure project as standard.

  • Output requirements

Concept of “verifiable service standards” to be used as basis for output or performance based specifications.

  • Transparency

Very high world class standards of public and corporate governance to enhance credibility and transparency.

FMW

road infrastructure compendium
ROAD INFRASTRUCTURE COMPENDIUM

For more Information, you can Download

for free the:

“Road Infrastructure & Related Development in Nigeria – An Investor’s Manual”

@:

www.works.gov.ng

FMW

conclusion
CONCLUSION
  • The Government of Nigeria, is attracted by the benefits of mobilizing private capital to the road sector, with a view to filling the funding gap .
  • Harvesting private capital helps to speed up the delivery of the public infrastructure & ensure adequate planned maintenance.
  • The Federal Government of Nigeria is open to interested foreign investors who desire to tap into the opportunities within the road infrastructure sector of the economy. The sector promises tremendous rewards for investors who have the financial capacity, technical wherewithal and the institutional framework to do business with the Government of Nigeria.
  • Therefore, investment in the development of road infrastructure in Nigeria, presents a lot of opportunities due to the current economic reforms of President Dr. GoodkuckEbele Jonathan, GCFR under the Transformation Agenda of the country, with good returns on investments .

FMW

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THANK YOU

FOR

YOUR ATTENTION!

FMW