By John Alechenu
ABUJA: The Federal Ministry of Works has reviewed guidelines for private sector participation in Nigeria’s road infrastructure development under the Highway Development Management Initiative (HDMI).
According to the ministry, the review was designed to strengthen the concession policy for concessionaires and attract private sector funding and investments.
Details of the review which included an addendum, were made public by the Minister of Works, Engr. David Umahi, after a two days meeting with stakeholders including concessionaires, which ended in Abuja, yesterday.
Part of the new addendum states among other things: that the concessionaires “shall construct compulsory facilities which shall include CCTV and solar streetlights, rest areas and any other additional facilities needed to improve travel safety and comfort of travelers on the entire project route.”
He explained that the aim of the meeting was to develop a more realistic, transparent and productive approach to financing in the construction and maintenance of road projects under Public-Private Partnerships.
In a statement signed by the Minister’s Special Adviser (Media), Barr. Orji Uchenna Orji, Umahi identified certain articles and clauses in the existing concession agreements executed on 23rd May 2023 that required review.
The review he explained, included clauses in both the original concession agreement and the proposed addendum to ensure: “value for money, strengthen long term collaboration, transparency and accountability as well as degravitate potential Put- Call Option Agreement and litigation.”
During the meeting, the minister raised issues such as: Put-Call Option Agreement (PCOA), additional facilities, performance security, shifting of encumbrances on site, the role of the independent engineer, competing road/alternate road, change in project scope, revision of toll fees, force majeure and stakeholder consensus building to ensure active citizenship participation in the effective take-off of project construction, tolling and maintenance.
Umahi recalled that some contractors were already on some of the project sites before concessionaires signed the concession agreements and that innovations had been introduced to add value to the works sector , hence, the need for a review of the existing agreement and its addendum.
He listed some of the requirements for the concessionaires to activate the implementation of their projects, to include: their obligation to ensure mutual termination of existing contracts before taking over their respective sites, the need to show evidence of their capacity and readiness, including proof of source of funds for the project, payment of all outstanding debts owed to the existing contractors, evidence of technical and financial competence, and availability of company or partner’s equipment.
The Minister restated that the ministry would not disengage any existing contractor from the site in any of the projects unless the conditions precedent are complied with by concessionaires.
The minister’s team at the meeting included: the Honourable Minister of State for Works, Bello Muhammad Goronyo,, the Permanent Secretary Secretary Cabinet Affairs Office of the Secretary to the Government of the Federation, Dr. Emanso U. Okop, the representatives of the Federal Ministry of Justice, and the Federal Ministry of Finance.
Others included: the Debt Management Office, Bureau on Public Procurement, Infrastructure Concession Regulatory Commission, Bureau of Public Enterprises, the team from Public-Private Partnerships Unit of the Federal Ministry of Works and directors of key departments.
Concessionaires who were in the meeting included: Africa Plus/BAAECC, Africa Finance Corp, Morta-Engine, Morta-Engil, Balosh Integrated Services, LIB Concession and Greg Jane Int. Limited.
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