In a proposed law that would possibly repeal the Infrastructure Concession Regulatory Commission (Establishment, etc.) Act,2005, the Federal Government is working out strategies to attract additional investments into the country and enhance Private Public Partnerships (PPP) into the economy to stem off looming distress.
Members of the House of Representatives are expected to commence debate on the bill which specifically seeks to establish the Public Private Partnership Regulatory Commission (PPPRC) as stipulated in section 44(1) of the new legislative framework.
The Bill is designed to stimulate the economy and create jobs.
The objectives of the PPPRC Bill, as spelt out in section 1(5) include: to facilitate private sector investment in the provision of new and existing infrastructure and other public assets in an effective and efficient manner. The Bill also seeks to attract private and public finance resources for investment in necessary social services, relevant to national development.
It further aims to ensure the provision of reliable public services by deploying private sector skills in project financing, risk management, project planning, as well as the use of new technologies to ensure greater efficiency and value for money in the provision of public infrastructure and services.
Betty Apiafi (PDP-Rivers) who sponsored the Bill, explains that it also seeks to “strengthen and enhance the supervisory role of the Commission and effectively position it in regulating the participation of the public and private sectors in the financing of construction, development, designing, operation or maintenance of infrastructure or development projects of the Federal Government through PPP arrangements and other related matters.”
In the bid to stimulate investment, section 33 of Part VII provides that the “Federal Government may approve the grant of financial incentives or investment support to any approved project on recommendation of the PPP Commission.
“The financial incentives or investment support include: equity participation by public infrastructure entity in cash or in kind, not exceeding 49% of the total equity investment in the relevant project, direct subsidies, reduction or exemption from certain fiscal regimes and the granting of loans and other similar support to specific projects and other incentives, as may from time to time be approved by the government.”
To discourage default by participating consortia, section 8 provides that “where a consortium participates in a bid, the consortium shall give an undertaking that all members shall be bound jointly and severally under the contract.”
Section 11 also mandates that “any concessionaire that has been granted a concession shall make payments to the public infrastructure entitled, of such sums and at such intervals, from the proceeds realised from the implementation of the concession, as may be provided in the agreement.”
Section 12 also provides that a special concession account which shall be credited money accruing to the government, and from which shall be defrayed, monies to be paid in respect of the concession scheme.
In a bid to protect the interest of the investor, Section 15 provides that “agreements under this bill shall not be suspended, stopped, cancelled or altered, except as provided for in the contract, or under the provisions of this bill.”
The Bill seen by BusinessDay, lists some of the sectors of interest as power plants, highways, seaports, airports, canals, dams, hydroelectric power projects, water supply, irrigation, telecommunications facilities, railways and interstate transport system.
Others are: land reclamation projects, industrial estates or township development, housing, public infrastructure entity buildings, tourism development projects, trade fair complexes, warehouses, solid wastes management, satellite and ground receiving stations, information technology networks and database infrastructure, education and health facilities, sewerage, as well as drainage, dredging, among others.
Projects envisaged under the bill include: ‘Design-Build-Finance-Operate (DBFO); Build-Own-Operate (BOO); Buy-Build-Operate (BBO); Lease-Develop-Operate (LDO); Land Swap Agreement (LSA); Build-Operate-Transfer (BOT); Build-Own-Operate-Transfer (BOOT); Build-Lease-Operate-Transfer (BLOT) and Build-Transfer-Operate (BTO) and Management Contract.
