INFRASTRUCTURE INVESTMENT OPPORTUNITIES

Transcription

1 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, Millennium Hotel, Mayfair, London / House of Lords, LONDON July 18 th 2013 FMW 1

2 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 2

3 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% (1 st Half 2013) Sources: CBN, DMO,NBS FMW 3

4 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% Source: World Economic Outlook 2012 FMW 4

5 World s Fastest Growing Economies - 1 Source: National Bureau for Statistics (NBS) FMW 5

6 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 Egypt 6.4 Sri Lanka 6.6 Indonesia 6.8 Mongolia 6.9 Phillippines 7.3 Vietnam 7.5 Bangladash 7.5 Iraq 7.7 India 8.0 Nigeria Av. Real GDP Growth (%) Citi Investment Research and Analysis 6 FMW

7 Nigeria s Economy: too large to ignore 8 th largest population in the world over 167 million people 4 th largest population under the age of th world largest reserves of oil and gas 36.2 billion barrels of oil 184 trillion Cubic Feet of natural gas 4 th largest equity market in the MSCI Frontier Market index Largest outside of the Gulf Cooperation Council (GCC) 5 th fastest growing economy in 2010 covered by Citi Investment Research and Analysis (CIRA) economists China, Taiwan, Singapore & Qatar 1 st 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 7

8 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 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 8

9 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 9

10 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 10

11 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 11

12 THE ABUJA CENTENARY CITY NEW ABUJA CITY GATE A magnificent and aweinspiring architectural masterpiece that will eloquently introduce the Centenary City and welcome visitors to Abuja. With a five year development period,the City 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 12

13 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 13

14 SECTION 2 A PRESENTATION ON THE INVESTMENT OPPORTUNITIES IN THE NIGERIA ROAD SECTOR FMW 14

15 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 15

16 INTRODUCTION contd. 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 16

17 ROAD OWNERSHIP STRUCTURE IN NIGERIA FMW 17

18 NIGERIA INTEGRATED TRANSPORT NETWORK FMW 18

19 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 19

20 INVESTMENT OPPORTUNITIES BY PUBLIC PRIVATE PARTNERSHIP(PPP) INITIATIVES NO. NAME OF ROAD 1 Kaduna Kano Dual Carriageway 2 Abuja Kaduna Dual Carriageway 3 Shagamu Benin Dual Carriageway 4 Benin Asaba Dual Carriageway 5 Lagos Badagry Seme Border Dual Carriageway 6 Upgrading and Modernization of Enugu Port Harcourt Road 7 Completion of Ibadan Ilorin Road 8 Lagos Iseyin Kishi Kaiama Road 9 Kaiama Babana- Bobe Kaoje Kwamba- Fokku Sokoto Road (new alignment) 10 Onitsha Enugu Dual Carriageway 11 River Katsina ala Bridge at Buruku 12 River Niger Bridge at Nupeko FMW 20

21 NIGERIA ROAD NETWORK FMW 21

22 INVESTMENT OPPORTUNITIES BY PUBLIC PRIVATE PARTNERSHIP(PPP) INITIATIVES S/NO ROADS/BRIDGES DISTANCE REMARKS ON-GOING PPP HIGHWAY PROJECTS: 1 Reconstruction & Expansion of Lagos Ibadan Expressway 126Km 2 Guto Bagana Bridge across Benue River 1.35km Bridge & 65Km Road PPP PROJECTS UNDER PROCUREMENT: Newly Awarded on EPC basis. O & M Concession - to be awarded. Concession is being reviewed & will be awarded.. 1 Construction of 2 nd Niger bridge at Asaba/Onitsha 2Km Newly Awarded 2 Access Road to Murtala Mohammed International Airport (MMIA) Road, Ikeja, Lagos 2.8Km Award of Concession in progress 3 Construction of bridge over River Niger at Nupeko, Niger State 950m OBC development phase in progress. FMW 22

23 INVESTMENT OPPORTUNITIES BY PUBLIC PRIVATE PARTNERSHIP(PPP) INITIATIVES S/NO ROADS/BRIDGES DISTANCE REMARKS PROPOSED PPP HIGHWAY PROJECTS WITH OBC BEING DEVELOPED: 1 Enugu Port Harcourt Dual Carriageway 210Km OBC development in progress. 2 Lagos Iseyin Kishi Kaiama Road 414Km OBC development in progress. 3 Kiama Bahama Kaoje Gwambu Fokku Sokoto Road 631Km OBC development in progress. 4 Construction of bridge over River Benue at Buruku, Benue State 1Km OBC development in progress. 5 Construction of bridge over River Benue at Ibi along Shendam - Wukari Road. 880m OBC development in progress. FMW 23

24 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 E and E and Latitude N and 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 24

25 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 The ADT is projected to reach 9,540 vehicles per day in the year 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 25

26 MAP OF NIGERIA SHOWING LOCATIONS OF PIPELINE PPP PROJECTS KADU NA-KANO DUAL CARRIAGEWAY ABUJA-KADUNA DUAL CARRIAGEWAY RIVER NIGER BRIDGE AT NUPEKO BRIDGE OVER RIVER BENUE AT IBI MURTALA MOHAMMED INT L AIRPORT ROAD RIVER KATSINA ALA BRIDGE AT BURUKU LAGOS-BADAGRY- SEME BORDER ROAD 2ND NIGER BRIDGE AT ONITSHA/ASABA ENUGU-PORTHARCOURT ROAD FMW 26

27 INVESTMENT OPPORTUNITIES OF PIPELINE PPP PROJECTS S/NO ROADS/BRIDGES DISTANCE REMARKS PROPOSED PPP HIGHWAY PROJECTS WITH FEASIBILITY/VIABILITY STUDIES YET TO COMMENCE 1 Bodo-Bonny Road to Link Bodo to the Island of Bonny in Rivers state 39 Km OBC studies to be carried out 2 Dualization of Ilorin-Jebba-Mokwa-Kaduna Road 597 km OBC ready 3 Dualization of Keffi-Akwanga-Lafia-Makurdi Road 4 Dualization of Lokoja-Ajaokuta-Ogbulafo- Enugu (9 th Mile) Road 215 km OBC ready 238 Km OBC studies to be carried out 5 Dualization of Akwanga-Jos Road 145 Km OBC studies to be carried out 6 Dualization of Enugu ( 9 th Mile ) Otukpo Makurdi Road 261 Km OBC studies to be carried out. 7 Dualization of Owerri Aba Road 60 Km OBC studies to be carried out. 8 9 Phase I : 2 nd Lagos outer ring Road: Tin Can Island Igando Lagos/Otta road interchange Lagos/Ibadan expressway Phase II : 2 nd Lagos outer ring Road i) Lekki-Epe Expressway Linking Existing Lekki-Epe Expressway with connection to the Proposed Lekki Deep Sea Port ii) 5 th Mainland Bridge. 10 Golden Triangle (Economic) Highways 74 Km OBC is ready 25 Km Road: 20.3Km Bridge: 5.4Km Various (5000Km) FMW 27 Consultant to carry out Feasibility Studies Consultants will be appointed to carry out Feasibility Studies to determine mode of best actualization

28 INVESTMENT OPPORTUNITIES OF PIPELINE PPP PROJECTS NO NAME OF ROAD 1 Lagos Iseyin Kishi Kaiama Road OGBOMOS HO MOKW A ILORIN OSHOGB O BIRNIN GWARI BIDA LOKOJA FUNTU A MINNA ABUJA KAD ZARIA KANO SAMINAK A LAFIA JOS MAKURD I 2 Bodo Bonny Road 3 Phase II : 2 nd Lagos outer ring Road: i) Lekki-Epe Expressway linking Existing Lekki- Epe Expressway with connection to the Proposed Lekki Deep Sea Port ii) 5 th Mainland Bridge 4 Golden Triangle Super Highway IBADA N ORE OTUKP A LEGEND LAGOS BENIN WARRI WARRI ONITSH A OWER RI YENAGO A ABA ENUG U OKIGW E UMUAHI A PROPOSED GOLDEN (ECONOMIC) TRIANGLE SUPER- HIGHWAY (4 ABOVE) OTHEF HIGHWAYS: 1,2 & 3 ABOVE PORTHARCOU RT FMW 28

29 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 Sokoto Road is located within the South West, North Central and North West Zone of Nigeria. The road lies between Longitude E and E and Latitude N and N. The Road is divided into Two Sections: i. Section I: Badagry-Iseyin-Kishi-Kaiama (414.4km); ii. 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 29

30 HIGHLIGHTS ON THE MAJOR HIGHWAYS INVESTMENT OPPORTUNITIES: SECTION I: Badagry-Iseyin-Kishi-Kaiama km 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, vehicles per day in The ADT is projected to reach 9, vehicles per day in the year The condition of the road can be described as poor. Feasibility and Viability studies have been completed including the Outline Business Case (OBC) FMW 30

31 HIGHLIGHTS ON THE MAJOR HIGHWAYS INVESTMENT OPPORTUNITIES: SECTION II: Kaiama-Babana-Kaoje-Gwambu-Fokku- Jega-Sokoto Badagry- 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, vehicles per day in The ADT is projected to reach 5, vehicles per day in the year This is attributed to the poor condition of the road. Feasibility and Viability studies have been completed including the Outline Business Case (OBC). FMW 31

32 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 E and E and Latitude N and 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 32

33 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 33

34 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 E and E and latitude N and N. The Bridge under consideration is 950m long and links Niger and Kwara States in Nigeria. FMW 34

35 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 35

36 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 E and E and Latitude N and N The Bridge under consideration is 880m long and would link Gboko and Zaki -Biam communities in Benue State. FMW 36

37 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 37

38 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 E and E and latitude N and N The Bridge under consideration is 880m long and links Gboko and Zaki Biam comunities in Benue State. FMW 38

39 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 39

40 HIGHLIGHTS ON THE MAJOR HIGHWAYS INVESTMENT OPPORTUNITIES: 2 ND 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 E and E and latitude N and N The Bridge under consideration is 2km long and links Onitsha in Anambra State to Asaba in Delta State. FMW 40

41 HIGHLIGHTS ON THE MAJOR GREENFIELD HIGHWAYS INVESTMENT OPPORTUNITIES: 2 ND LAGOS OUTER RING ROAD FMW 41

42 HIGHLIGHTS ON THE MAJOR GREENFIELD HIGHWAYS INVESTMENT OPPORTUNITIES: 2 ND 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 42

43 HIGHLIGHTS ON THE MAJOR GREENFIELD HIGHWAYS INVESTMENT OPPORTUNITIES: 2 ND LAGOS OUTER RING ROAD PROPOSED SOLUTION: Construct a 25Km 4-lane link road from the Lekki-Epe Expressway to the LFZ. Construct a 5 th 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 43

44 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 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 44

45 GOLDEN (ECONOMIC) TRIANGLE SUPER-HIGHWAY KANO FUNTU A BIRNIN GWARI KAD ZARIA SAMINAK A JOS MOKW A BIDA MINNA ABUJA ILORIN LAFIA OGBOMOS HO OSHOGB O LOKOJA MAKURD I IBADA N OTUKP A ORE LAGOS BENIN WARRI WARRI FMW ONITSH A OWER RI YENAGO A PORTHARCOU RT ABA ENUG U OKIGW E UMUAHI A LEGEND PROPOSED GOLDEN (ECONOMIC) TRIANGLE SUPER-HIGHWAY SUPER-HIGHWAY LINKS TO MAJOR CITIES 45

46 SHIFT PROGRAMME (WHAT WE ARE CURRENTLY DOING) S/NO ACTION FINANCE REMARKS 1 Completion of On-going projects at advanced stages of completion 2 Routine and Periodic Maintenance of Federal Roads FG SURE-P FG 5% FUEL SURCHARGE On-going On-going 3 Rehabilitation of Federal Roads FG/SGs/Multi-lateral Agencies (AfDB; World Bank) On-going 4 Upgrading of Major Federal Trunk Roads Public Private Partnership (PPP) Feasibility studies On-going 5 Greenfield Projects (Golden Triangle Super- Highway) Public Private Partnership (PPP) 6 Lagos Outer Ring Road Public Private Partnership (PPP) Detailed Route identification On-going. Consultant to carry out feasibility/viability studies to be appointed. Consultant to carry out feasibility/viability studies to be appointed. 7 Institutional Reforms FMW, BPE, World Bank & DFID Process On-going FMW 46

47 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 47

48 SECTION 3 REGULATORY FRAMEWORK FOR PPPs in Nigeria FMW 48

49 Nigerian Legal and Regulatory Framework for PPPs FMW 49

50 A World Class Integrated Road Network is Our National Aspiration FMW 50

51 Key PPP Legislation - The ICRC Act 2005 Establishes the Infrastructure Concession Regulatory Commission (ICRC) Sec 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 51

52 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 ( FMW 52

53 PPPs Definition in Nigerian Context A Public-Private Partnership is a contractual agreement between a public agency (federal, state or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in 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 rewards potential in the delivery of the service and/or facility. Wide Infrastructure Gap Growing demand for private sector participation in infrastructure Small and depleting Government resources Urgent need for alternative funding of Infrastructure The goal is to combine the best capabilities of the public and private sectors for mutual benefit FMW 53 53

54 SLIDE 54 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

55 PPP LIFECYCLE in line with National Policy Preliminaries Project Identification Project Prioritization Project Selection Development Phase Procurement Phase Implementation Phase 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 TECHNICAL ADVISER MONITOR DESIGN AND CONSTRUCTION COMMISSIONING TEST VERIFY OUTPUT REQUIREMENTS CONTRACT MANAGEMENT PREPARING AND IMPLEMENTING EFFICIENT AND FMW EFFECTIVE PPP TRANSACTIONS 55

56 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) Developer& Operator Facilitator FMW 56

57 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 57

58 Typical BOT Structure The final responsibility for service delivery continues to remain with the public sector BOT-Toll Road Project GRANTING AGENCY Concession Agreement FINANCIERS Equity Investors Lenders, Guarantors Insurers FINANCIERS Equity Investors, Lenders, Guarantors, Insurers SPV Service Tolls ROAD USERS Design Risk Demand, Traffic, Construction Risk Operational Risks Traffic/Revenue & O&M Design Construction O&M DESIGN Contractor Consultant FMW CONTRACTOR Contractor CONSULTANT 58 CONSTRUCTION CONTRACTOR

59 THE KEY PPP PRINCIPLES BEING DRIVEN BY NIGERIA Value for Money Ensure project appraisals take into account not only cost but also risks and service quality Public interest Adequate and prior consultation with endusers 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. 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 infrastructure have the capacity to manage the commercial processes involved and to partner on equal basis with their private sector counterparts. FMW 59

60 ROAD INFRASTRUCTURE COMPENDIUM For more Information, you can Download for free the: Road Infrastructure & Related Development in Nigeria An Investor s FMW 60

61 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. Goodkuck Ebele Jonathan, GCFR under the Transformation Agenda of the country, with good returns on investments. FMW 61

62 THANK YOU FOR YOUR ATTENTION! FMW 62