Daily Champion (Lagos)
Dele Ore
23 October 2009
The infrastructure concession regulatory commission Act 2005 provides for the participation of private sector in financing the construction, development, operation, or maintenance of infrastructure or development projects of the Federal Government through concession or contractual arrangements; and the establishment of the infrastructure Concession Regulatory Commission to regulate, monitor and supervise the contracts on infrastructure or development projects.
Global demand for basic infrastructure services has grown over the years. Quickly outstripping the supply capacity of existing, assets. Many years or underinvestment and poor Maintenance have left Nigeria with a significant infrastructure deficit which is holding, back the country's development and economic growth. Nigeria needs to make massive investments beyond the means available to government in order to close its yawning infrastructure gap. The Federal Government believes that the private sector can play an important role in providing some of this new investment through Public Private Partnerships (PPPs).
Government Commitment
Government has therefore developed regulatory and monitoring institutions so that the private sector can have a greater role in the provision or infrastructure, whilst ministries and other public authorities will focus on planning and structuring projects. The private sector will be contracted to manage some public services, and to design, build, finance and operate some infrastructure.
It is the Government's expectation that private participation in infrastructure development through PPP will enhance efficiency, broaden access, and improve the quality of public services.
This policy statement sets out the steps that the Government will take to ensure that private investment is used, where appropriate, to address the infrastructure deficit and improve public services in a sustainable way. In line with the Government's commitment to transparency and accountability, it will ensure that the transfer or responsibility to the private sector follows best international practice and is achieved through open competition.
The Government has inaugurated the infrastructure Concession Regulatory Commission (lCRC) with a clear mandate to develop the guidelines, policies, and procurement processes for PPP.
ICRC will collaborate will the States to promote an orderly and harmonised framework for the development or Nigeria's infrastructure and accelerating the development or a market for PPP projects. The Federal Government assures investors that all contracts completed in compliance with the lCRC Act will be Legal and enforceable, and that investors will be able to recover their expected return subject to compliance with the terms or the PPP contract.
Legal Framework
The Government will review the Iegal and regulatory framework created under:
• The Privatisation and Commercialisation Act 1999;
• The infrastructure Concession Regulatory Commission (Establishment) Act 2005;
• The Fiscal Responsibility Act 2007;
• The Public Procurement Act 2007;
and other relevant legislation. If necessary, it will propose amendment of existing legislation or the enactment of new Legislation to:
• ensure that public authorities are empowered to enter into Agreements for the implementation of privately financed infrastructure projects and can delegate their statutory functions to private companies;
• ensure that the regulation and licensing of public service operators and operations is transparent, timely, and effective;
• provide appropriate remedies for protecting the safety and integrity of public infrastructure from vandalism and other criminal activity;
• create a centre of PPP expertise within ICRC (the PPP Resource Centre) to issue guidance to all public authorities on the procurement and drafting of PPP projects and contracts;
• ensure that there are no distortions created by existing tax, banking, company, or any other laws that would bias the investment decisions of public authorities for or against PPP as a procurement option', or would distort the commercial decisions of PPP investors, contractors, or operators;
• provide for transparent efficient, and competitive I procurement procedures for PPP type contracts which encourage innovation from bidders, and allow dialogue to optimise the allocation of risks between the contracting parties;
• ensure that there is an effective disputes resolution process which can operate independently and in a timely manner to provide alternative procedures such as arbitration and expert determination;
• ensure that the proposed institutional and financial framework for PPP, and the issuance or guarantees, partial risk insurance, or other financial instruments by, or through, the Federal Government, is consistent with the Fiscal Responsibility Act 2007 and corresponding legislation proposed or enacted in each State.
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