LATEST PUBLIC-PRIVATE PARTNERSHIP INITIATIVE IN NIGERIA´S CAPITAL ABUJA, STYLED “LAND SWAP INICIATIVE”

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Posted on May 22, 2013 by afribull under Current Opportunities
foto caratula land swap

INNOVATIVE APPROACH TO HOUSING IN FCT ABUJA

 The land swap model simply means that developers will be awarded a percentage of large hectares of land for the provision of engineering infrastructure.

The essence of the land swap model is to give an investor a particular percentage of land in a district in exchange for the provision of infrastructure in the entire district.

To understand the rationale for this arrangement, we need to know the exact situation of things in Abuja. At the moment, Abuja is highly congested; it is literally exploding with population activities. If nothing is done, the Abuja master plan will be incurably distorted in such a way that, in ten years time, many people will no longer recognize the once beautiful city.

Way out: Develop new districts. But hundreds of billions of Naira which the FCT can hardly afford will be required to provide engineering infrastructure in the form of roads, drainage systems, water supply, social amenities, etc in these districts.

The problem is that if we want to wait for the traditional way of funding these projects through government budget, we may wait forever. Even with the best of budgets, it will take nothing less than 10 years to complete ongoing projects, a situation the minister finds unacceptable.

What to do? The minister Bala Mohammed and his team at the FCT had to put on their thinking caps to evolve a “paradigm shift”. The Hon Minister says “the land swap arrangement is in fact, trying to actualize the land reform policy under the transformation agenda project. It is going to catalyze real property development in the entire capital because here you are discouraging people to come and start asking for single allocations of land but you are encouraging people to get ownership of homes.”

The Result: The land for infrastructure swap model! The paradigm shift is to now place emphasis on house ownership as obtained in developed countries rather than the craze for land allocation as is in the past. His words: “the emphasis is not on allocation of land to a person but ownership of the house because what is most important is the roof over your head with the little document so that you as an individual can create capital”

Senator Bala Mohammed´s vision and the land swap initiative have received unequivocal endorsement from Nigeria´s leading property developers, some of whose firms are angling for a slice of the Abuja land pie. They explained that in an era of budgetary constraints, accelerating real estate development in Nigeria while benchmarking global best practices could only come through private investments and expertise.

Conclusion: A total of nine districts are involved in the land swap model. These are: ketti North, Sheretti, Ketti, Sherreti Chechi and Waru Kpozaika. Others are Burum, Burum West, Ketti East and Gwagwa Districts.

Senator Bala Mohammed has underlined greater transparency, public sector realignment, training and retraining of civil servants, policy consistency and continuity as paramount desiderata for the success of the program. The Minister is of the view that by exposing the middle class to ownership of houses, the land swap initiative will bring down rents and kill off land speculation.

NIGERIA OPENS ITS DOORS TO FOREIGN INVESTMENT THROUGH PUBLIC- PRIVATE PARTNERSHIPS

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Posted on April 28, 2013 by afribull under Nigeria
Real Estate, Federal Tenders

PUBLIC PRIVATE PARTNERSHIPS AND INFRASTRUCTURE

Public-Private Partnerships (“PPPs”) have globally been a suitable model for undertaking infrastructure projects for decades. Most developed nations such as; India, United States… kick- started their economies by accelerating their infrastructure and capitalising on it. Late President J.F. Kennedy of the United States of America once cited “America has good roads, not because America is rich, but America is rich because it has good roads.”

Public–Private Partnership (PPP) can be described as a legally-binding contract between the government and private businesses. A PPP arrangement provides assets and delivers services by allocating responsibilities and business risks among the various partners. In this arrangement, government remains actively involved throughout the project’s life cycle, while the private sector is more responsible for commercial functions such as project design, construction, finance and operations. This distinction of responsibilities is secured by agreements.

PPPs have been used to develop large transportation infrastructure projects, including roads, railways, transit systems, seaports and airports. They have also been used in the energy sector, water system, gas sectors… and as well as asset-based projects including; health care, education, etc. The United Kingdom, Australia, Ireland, Colombia, Canada, India, among others, serve as reference of countries that accelerated their infrastructure through Public-Private Partnerships. (See: www.partnershipsuk.org.uk)

PUBLIC PRIVATE PARTNERSHIP IN NIGERIA

Recently, infrastructure development has been playing an important role in Nigeria’s goal to attain social and economic stability. The federal government and all state governments have undertaking infrastructure as the priority of their administrations and policy enactments. Infrastructure generally has to do with the fixed provision of tangible assets that implies the provision of Housing, Power (electricity), Transport, Communication and Technology.

Nigeria’s huge natural and human resource gives it the potential to become Africa’s largest economy and a major player in the global economy. The present government of Nigeria has the mission to position Nigeria as one of the top 20 economies in the world by the year 2020.

Notwithstanding, the country’s huge infrastructure deficit has significantly constrained economic growth and development, therefore reflecting the need to accelerate the development of an infrastructure, comparable to those of other emerging economies such as Brazil. This development of Infrastructure and related investments are critical in achieving and sustaining a high double-digit annual growth rate, which is necessary for Nigeria to achieve its mission 2020.

Given the huge finance needed and the drive necessary for development, the Nigerian government does not have the requisite capability to achieve this on its own and among other options has embarked on the use of Public Private Partnerships (PPPs) for infrastructure development, thus addressing the challenges constraining the growth of the Nigerian economy.

The aim of the Federal Government’s programme for PPP is the creation of new infrastructure and the key expansion and refurbishment of existing assets at the federal level.

Nigeria’s policy on PPP consist of developing regulatory and  monitoring institutions so that the private sector can play a greater role in the provision of infrastructure, while 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 PPPs will enhance efficiency, accessibility and improve 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; and it will ensure that the transfer of responsibility to the private sector follows best international practice and is achieved through open competition.

Nigeria took a bold step towards accessing the benefits of PPPs with the enactment of the Infrastructure Concession Regulatory Commission (Establishment) Act (“the ICRC Act”) in 2005.

The ICRC Act seeks to provide for the participation of the private sector in financing, construction, development, operation, and maintenance of Federal Government infrastructure or development projects through concession or contractual arrangements. The Infrastructure Concession Regulatory Commission (ICRC) and its Governing Board were then established to regulate, monitor, and supervise the concession and development projects.

The key strategic objective for the Infrastructure Concession Regulatory Commission (ICRC) is to accelerate investment in national infrastructure through private sector funding, while assisting the Federal Government of Nigeria and its Ministries, Departments, and Agencies (MDAs) to implement and establish effective Public Private Partnership’s (PPP) process.

The Public-Private Partnerships Initiative and structure in Nigeria could be displayed as a step towards achieving a transparent and open economy, serving as a gate-way to foreign capital investments on infrastructure in the region.

BMI FORECAST NIGERIA INFRASTUCTURE INDUSTRY REAL GROWTH FOR 2013

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Posted on January 28, 2013 by afribull under Nigeria
AHMADU BELLO WAY, ABUJA

AHMADU BELLO WAY, ABUJADespite recording a real growth of over 10% in the construction industry in 2012, BMI has published in its latest forecast, estimating a real growth of 10% for the construction industry in Nigeria for the year 2013.

The report indicates that the growth of the industry will be strong-driven by investment, the consumer sectors, as well as a growing oil sector powered by historically high prices.

It also stated the persistent risks hindering the implementation of major projects, ranging from deep-rooted corruption, violence perpetrated by militant Islamists and retaliatory forces and a vast yet still inefficient bureaucracy. To be able to sustain long-term growth in the country, the report stressed the need for the country to press ahead with the ambitious and necessary economic and business environment reforms, also uttering the need to develop a plan that can address the root causes of violence in the Niger Delta and the Middle Belt.

BMI Explains Few of the 2012 Awarded Key Projects That Would Assist to Spur Economic Growth:

  • Nigeria’s minister of Aviation has announced the plan to construct a new international airport in Abuja. The planned airport would thus join a fleet of already ongoing projects within the airport transport subsector: we already note the $683 million construction of five new terminals at five different airports across the country awarded to China Civil Engineering Construction Corporation, as well as, the redevelopment of five existing terminals, approved by the government in February 2011.
  • Nigerian Infrastructure Development Company Bi-Courtney Highway Services (BCHS) has announced that it is to begin its redevelopment of the Lagos-Ibadan Expressway. The US$559mn project involves the reconstruction of both existing carriage ways, as well as the addition of two more carriageways in each direction between the Lagos-Sagamu interchange. BCHS has been awarded a 25-year concession contract to manage the expressway, which links Lagos with Nigeria’s western states.
  • Intels Nigeria was awarded a contract by the Nigerian government for Phase 4 of the Onne Port Complex at Port Harcourt in Rivers State. The $370.5 million project includes land reclamation, the widening of the channel entry, the construction of three new berths and the Federal Ocean Terminal, and the enhancement of existing facilities at the port. Intels, which has already completed the first three phases of the project, will undertake the work in order to allow the port to handle an increase in gas and oil shipments.
  • The Nigerian government and General Electric (GE)’s have signed an agreement to help Nigeria to develop 10 GW of additional electrical-generating capacity, amid a push to privatize the failing state-run Power Holding Company of Nigeria (PHCN). This provides some optimism in terms of tackling the country’s epileptic power supply.
  • Attempts to unbundle and privatize power utilities previously owned by the state’s Power Holding Company of Nigeria (PHCN) is almost a reality. Nigeria’s state-run power utility has been split into six generation and 11 distribution companies, and in September 2012 Nigeria announced the winning bids for five state-owned electricity plants. The preferred bidders now have six months to make full payment before the plants are handed over. Disposal of the remaining generation company (Afam) has been delayed after some controversy. Preferred bidders for the 11 distribution companies were announced in October 2012.
  • Another step forward in restructuring the economy and realizing Nigeria’s vast wealth is the cabinet’s approval of the long-awaited final draft of the Petroleum Industry Bill (PIB). The PIB should bring more regulatory certainty and could unlock billions of dollars in investments in the country’s oil and gas industry.

Report by AFRIBULL.

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