• Monday, May 27, 2024
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BusinessDay

World Bank to restructure $115m support credit to ICRC

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The World Bank has said that it would restructure the $115 million adaptable programme loan granted the Infrastructure and Concession Regulatory Commission (ICRC) of Nigeria, on account of poor implementation.

In a report titled “Implementation Status and Results, Nigeria Public/Private Partnership Programme (P115386)” and relating to the $115 million adaptable programme loan granted the commission in 2011, the World Bank declared that the commission’s performance was unsatisfactory, specifying that ICRC has failed in its implementation.

This has prompted the Bretton Woods institution to downgrade the project and order the restructuring of the credit.

Prior to this, the commission has since February 18, 2011 signed Memoranda of Understanding (MoUs) with the ministries that are to benefit from the facility. These are the ministries of Works, Transport, Aviation, Power and the Federal Capital Territory, FCT.

The commission, according to the World Bank, has failed to develop a project pipeline for the projects that are to benefit under the support credit and this has created a challenge in accessing the credit. Owing to this, the credit has been dormant since its approval in March 2011.

The ICRC’s failure, BusinessDay was told, has prompted a high level discussion between the World Bank and the ministers with the aim of building a credible PPP pipeline.

The concession commission was established by the Late Umaru Yar’ Adua administration to accelerate investment in national infrastructure through private sector funding. It is expected to assist the Federal Government and its Ministries, Departments, and Agencies (MDAs) to implement and establish effective Public Private Partnership’s (PPP) process.

Specifically, the ICRC is created  to build a pipeline of public infrastructure investment projects using the ministries, departments and agencies that are high priorities for FGN and which can attract private sector investment.

The APL, approved by the board of the World Bank on 17 March 2011 and became effective December 15, 2011, is to run till 29 December 2017. It is a regular International Development Association (IDA) credit with maturity period of 40 years and a grace period of 10 years.

The project to which facility is attached has three components. They are Capacity Building and Legal/Regulatory Reform, which cost $39.60 million, PPP Preparation and Transaction Advisory Support, costing $62.70 million and the Project Implementation and Monitoring and Evaluation, to which $7.90 million was approved.

The APL is to increase private investment in Nigeria’s PPP infrastructure market and specifically the core infrastructure sectors. The development objective for Phase one is to establish effective institutional and technical mechanisms and instruments for origination and development of PPP projects.

Under the overall rating in the report, number ISR 8552, the current rating shows that ICRC progress towards the Project Development Objective (PDO) is unsatisfactory, while the overall implementation progress is moderately unsatisfactory. Overall, the World Bank said the risk is high.

ICRC has refused to comment on this development despite several calls and email requests to it.

An e-mail request for the commission’s reaction was directed to Gbenga Odugbesan, its spokesper

son on March 3, 2013 in addition to several telephone calls. No response has come from him or the commission till the publication of this report.

A top official in the office of the Commission’s Director-General confirmed the World Bank’s plan to restructure the project, raising fears that the credit might be cancelled.

World Bank credit could be cancelled if the leadership of the unit in charge of the project is changed before the credit is drawn, or the project and the credit are dormant. According to him, both developments had happened on the projects. The credit was approved and became effective in 2011 but has since gone dormant. Also, the leadership of the team has changed.

John Speakman, World Bank Team Leader on the project, in the Implementation Status Overview e-mailed to BusinessDay, observed that the PPP project has been effective since December 2011 and the facility available to ministries and government agencies who wish to implement PPP projects under their ministries.

“However, few ministries have come forward with project proposals, although a large infrastructure gap exists in Nigeria. Developing a project pipeline has therefore remained a challenge for the project and no demonstrable progress has occurred since then”.