Nigerian authorities hope to raise some private sector capital, majorly in equity and partly bonds to partly fund the on-time completion of the second Niger Bridge which was stalled for several years on account of politics and lack of funds.
The private capital would be raised sometime in 2020, but the Nigeria Sovereign Investment Authority (NSIA) which is main project financier has already injected the first N33 billion on the main works of the contract from the $650m Presidential Infrastructure Development PIDF announced by President Buhari in May.
Following the release of the PIDF, work has commenced earnestly on project and the handlers now assure that the bridge would be ready for usage by February 2022.
During a site tour of the project at both the Onitsha and Asaba ends, the NSIA Chief Executive, Uche Orji said for the first phase of the project which comprises a bridge and an 11.9 kilometer stretch, the funding structure is such that involves the PIDF, NSIA and third party funding.
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“The private sector funding by 2020, is both equity and bonds,” Orji said. “There is a financing plan that involves a bond programme, but we believe that by the time we go to the market to raise capital, we
would raise a significant part of it as equity alongside bonds but in the moment, all options are on the table for financing,” he added.
The project has reached 16 percent completion and currently engages 820 direct workers, authorities at the Julius Berger, who are the main handlers of the project told BusinessDay at the site.
The project commenced fully following in September 2018 following the release of the $650m Presidential Infrastructure Development to the Nigeria Sovereign Investment Authority (NSIA) to fund the project.
The federal government, announced in May that it was releasing the $650million to fund five critical projects the projects which had suffered suffering cost variations over the past few years, including the 2nd Niger Bridge, Lagos-Ibadan Expressway, East-West Road, Abuja-Kano Road and Mambilla Hydroelectric Power.
Uche explained that the coming of the $650m PIDF did not change the project’s financing structure in any way but that it is an additional funding. He also mentioned that they are expecting a second $650 million tranche of the PIDF.
“We have gone from the early works, one, two, three, four and now the main works.
“The commitment we have secured from the contractor is that we would start to see what looks like a visible sign of the bridge with slabs and so on next year, so it is not a cheap project, we are looking at N220 billion.”
In most places, it takes seven years just to plan and there are still many challenges that we have not addressed yet.
Most of the issues on compensation, rights of way for some of the places have been addressed, at least for the places where work is undergoing now, but some of the issues are also still in the future for the government to address.”
He also assured that there is huge commitment of NSIA to inject up to $300 million for the entire projects that they are working on.
He said, “Already, three projects are in construction: Second Niger Bridge: A greenfield construction of an 11.9km, 2×3 lane Greenfield highway connecting Asaba (Delta State) and Onitsha (Anambra State).
The project is vital for the development of the region. The Lagos – Ibadan Expressway involves the rehabilitation, reconstruction and expansion of that corridor.
“The 127 km highway links the city of Lagos with Ibadan and proceeding onwards to connect the northern region of the country. It is among Africa’s most important roadways.”
On the Abuja-Kano expressway, he said the project entails the modernization of 370 kilometers of road.
“It is a critical part of the A2, which is a main artery within Nigeria’s transportation grid, enabling the movement of people and products from the north to the south and vice versa.
Speaking on the Mambilla Hydro-Power Project, which is also being funded by the PIDF, Orji said it entails a 3050 MW Hydroelectric Power facility located in Sardauna Local Government of Taraba State.
“On East-West road, the Project entails the construction of a 30km
dual-carriage way spanning from Oron in Akwa Ibom State through to
Calabar in Cross River state. The road will serve as a transit
corridor for the movement of heavy equipment for oil exploration and
production in the Chad Basin.
He said the Authority was pleased with the progress recorded so far on the projects.
“Leveraging the financing model adopted by Government under PIDF,
completion-related risks on account of funding have been eliminated.
“Further, the model affords efficiency on project delivery and fund
performance while allowing for value engineering which ensures
completion at a reasonable cost and within the planned project
timeline. It is expected that in the long-run, these investments would help improve Nigeria’s economic growth forecast.”
Commenting on the project, the Obi of Onitsha, Nnaemeka Achebe who also jointly inspected the bridge showed excitement that the work had finally commenced after so many years
According to him, “The bridge will melt the heavy traffic that is
usually felt daily as Onitsha is a paramount corridor. It’s a national project.
“President Buhari is doing well to put it on course. Nigeria will be
transformed once the five projects are completed,” he said.
“The design has been there over the years but somehow it has not materialized.
“We all have to keep working together.
“If you have any problem, let us know. The Council supports the
project. As regards security, we will do our part and government will do its part,” he assured.
Frederick Weiser, Project Director of the Second Niger Bridge being
handled by Julius Berger assured on the on-time completion of the job by February 28, 2022.
“Two dredgers are already on site. Pillars have been done during the
early stage. 820 people are working here. But it’ll increase to 1,200 later. We’ve a good relationship with the host community. 28 February, 2022 is the completion date subject to funding availability,” he said.
