• Thursday, December 07, 2023
businessday logo


IPPs, PPPs and concessioning: Nigeria’s new honey pots?



With the ushering of civil and democratic rule in 1999, the Obasanjo’s administration (1999-2007) introduced some far-reaching innovative policies and institutional frameworks to ‘move Nigeria forward’ from its very highly disappointing developmental trajectory. For example, Nigeria was under nearly two decades of military rule from December 1983 until May 29, 1999.

During the period of military rule, the nation’s critical infrastructures cutting across all sectors of the economy were allowed to deteriorate and collapsed. For example, the nation’s epileptic electricity or power sector, the death-trap federal highways and state road networks respectively, the comatose rail system, the mere consulting hospitals and the moribund educational facilities are still in bad shapes in terms of service delivery, efficiency and effectiveness.

So much have been said in countless fora and written about in various types of media over the years to date. What came out of all these efforts geared towards examining and addressing the national malaise were a number of sectoral and economy-wide policy suggestions and recommendations.

This piece is an attempt to briefly examine how these development concepts or frameworks have feared in Nigeria. I begin first, with the IPPs and PPPs in Nigeria’s quest for reforming its comatose power sector. For example, Nigeria opened up its power sector to private sector participation in electricity generation and distribution while leaving transmission to the public sector (i.e. Government-owned and controlled) under the 2004 Power Sector Reform Act.

At the same time, the Act also allows for joint public-private partnership (PPP) investment in generation and distribution of power by local and foreign investors. For instance, in Aba, Abia State, there exists an IPP project being implemented by a private firm owned largely by a former Nigerian Minister of Science and Technology and presently, President Jonathan’s Presidential Adviser on Power, Bart Nnaji.

Furthermore, there is an independent power generation project in Akwa Ibom State arranged by the government and some local/foreign investors and is being implemented under IPP/PPP model framework. Similarly, there is also a petroleum refinery project in Lagos State conceived by the Lagos State Government and the Nigerian National Petroleum Corporation (NNPC) in partnership with a consortium of Chinese investors to be sited in the Lekki Peninsula Free Trade Zone. It is one of the typical projects conceived under PPP arrangement.

And, examples of infrastructure concessioning arrangement include those in the Nigerian maritime ports, Airports and Federal Highways amongst others. Thus far, several licences have been issued by the nation’s respective statutory regulatory bodies for building of petroleum refineries, power generation plants and distribution and provision of other critical infrastructures under these model frameworks all over the country.

However, my observation regarding these creative special development delivery vehicles is that, more often than not, Nigerians are been short-changed where any of these types of arrangement is already in place, being proposed and/or is about to be implemented. For example, the power sector has been the most vulnerable in this regard.

For instance, state governors are daily been flooded with dubious and outright unrealizable proposals regarding development of solar power, wind power and bio energy projects by those I consider as brief-case carrying overnight ‘home-grown’ and Nigerians in Diaspora ‘experts’ and ‘investors’.

Take for example, a number of power generation and critical infrastructures projects that have been conceived and pushed through by these overnight ‘experts’ and ‘investors’ under IPP, PPP and Concessioning frameworks in a number of States of the Federation are experiencing one hiccup or another, largely as a result of deceits and falsehood in-built into these projects in order to enrich the private bank accounts of those associated with these projects.

However, for space constraint, I am not going to go into the specifics of naming and providing detailed analysis of specific instances or projects being executed by some state governors or the Federal Government of Nigeria under these scandalous circumstances. Moreover, many of such projects are already known to the public.

Nevertheless, the on-going projects are suffering from what I consider being outright scams and/or they have been turned in what I call Honey Pots. Hence, they are most likely to end up in same way as the very sad familiar ubiquitous abandoned ‘white-elephant’ projects across the nation.

In other words, there is an urgent need to seriously carryout technical and financial audits of these on-going projects and the proposed projects awaiting approvals of state governors or the presidency as the case may be. This is with a view to determine their desirability, feasibility and viability in the interest of the common good.

In conclusion therefore, it is high time the various executive arms of governments at all levels, the independent statutory regulatory bodies and the relevant legislative over-sight committees both in the states and the national assemblies woke up to their respective statutory responsibilities in order to halt and/or sanitize the on-going scams and fraudulent activities in the guise of IPP, PPP and critical infrastructures concessioning in Nigeria.

Nigeria cannot afford to continue squandering its very scarce financial resources in the face unfulfilled provision of basic needs of life to its teeming population. Enough is enough of the on-going unchecked developmental scams and frauds taking place in all the three tiers of governance in Nigeria in collaboration with some unpatriotic Nigerian and foreign private ‘experts’ and ‘investors’