Over $3.9bn expected from private sector investment as FEC approves infrastructure projects for concession
Some key Federal Government investments across the country are billed to generate over $3.9 billion additional funds following approval for them to be sold to private investors.
These moribund infrastructure projects have for years become drain pipes to government funds necessitating the need to give them out to private sector operators with requisite experience to manage them. The concession is in line with Federal Government’s policy on public-private partnership (PPP) agreements, aimed at allowing private sector operators manage some non-performing government projects for efficiency and better service delivery.
The action, which follows accepted public bidding procedure, is being midwifed by the Infrastructure Concession Regulatory Commission (ICRC) in collaboration with relevant government ministries, departments and agencies (MDA).
Section 1 (1) of the ICRC Act, 2005, states that any Federal Government MDA involved in the financing, construction, operation or maintenance of infrastructure by whatever name called may enter into a contract with or grant concession to any duly pre-qualified project proponent in the private sector for the financing, construction, operation or maintenance of any infrastructure that is financially viable or any development facility of the Federal Government in accordance with the provisions of the Act.
In line with this, the Federal Executive Council (FEC) Wednesday, approved the Full Business Case in respect of the Bonny Deep Water Port Project, Port Harcourt Industrial Park, the Nigerian Correctional Service Shoe and Garment Factory Aba and the Port Harcourt – Maiduguri Narrow Gauge project, respectively, for concession.
This development allows the respective ministries to proceed to commercial close and eventual signing of concession agreement with successful investors expected to generate over $3.9 billion to the national treasury. The approval formed part of the outcome of FEC meeting in Abuja, yesterday.
Speaking on the development, Chidi Izuwah, director-general/chief executive, ICRC, told BusinessDay that the Bonny Deep Water Port has the potential to bridge the maritime infrastructure gap and boost economic activities along the South-South, South-East, North-Central and North-East geo-political zones. “It would also ease pressure on the Western Ports (Apapa and Tin Can Island), which at the moment handles about 90% of container and cargo traffic into the country,” he said.
Similarly, he said the Port Harcourt Industrial Park, a strategic investment in the South-South region, with the China Civil Engineering Construction Corporation (CCECC) as proponent, has the potential to generate massive revenues, create employment opportunities and help in transferring knowledge and skills to Nigerians.
On the Aba Shoe factory, he said it would produce boots and ankle shoes with annual installed capacity of 200,000 pairs per annum and would be equipped with sewing and moulding workshops, and a total of 239 employees would be engaged at project inception.