We’re strengthening PPP to end education, power, health challenges – ICRC DG
MICHAEL JOSEPH OHIANI, a lawyer, was recently confirmed by the Senate as director-general/CEO of the Infrastructure Concession Regulatory Commission (ICRC). A pioneer staff of ICRC, he was previously the team leader, Executive Unit at the Debt Management Office (DMO) where he participated in bilateral negotiations and projects management. He spoke to OBINNA NWACHUKWU in Abuja on what the commission is doing to end Nigeria’s infrastructure deficit, the significance of functional public-private partnerships and other issues. Excerpts:
Before your confirmation as DG, you were in acting capacity for a while, what would you say were milestones achieved during your period of acting as the director-general of ICRC?
First, let me say that we had a lot of projects within the period. A lot of MDAs came to us for support and advice. We were able to reach the commercial close in respect of Onitsha Port. We have worked with the NCC in respect of the revenue assurance system. These are some of the projects we have done and we stick tenaciously to the aviation road map which we want to consummate before the end of this administration in terms of actualising the concession of the four terminals; Lagos, Abuja, Port Harcourt and Kano. Also, we want the national carrier to be on stream. All these were done during the time I started acting.
We have also been able to ensure that the PPP programme is made friendly. What quite a number of people complain about over the years is that PPP is very strenuous, that before you can consummate a project, it takes quite a long time. So, what we have done is that we looked at the areas that can be made a bit flexible without compromising the essence of PPP principles; the transparency in PPP, the issue of who emerges as a leader. All these are what we have done.
We have also been working with BPE too. And in all these things, my own attitude is that, the issue of diplomacy, you don’t have to have any rancour with any MDA. We have been working with all the MDAs, when you bring a project, we look at the dynamics and what it will bring to the table, what it will bring to Nigeria in terms of employment and revenue. That’s my own drive and once I see that we then look at what are the defects in your OBC (Outline Business Case).
Fortunately, my predecessor got an in-house financial modeller. So, I will sit with him and say look, I have one philosophy which I inherited from Dr. Mansur Muktar during the actualisation of debt relief. He said, “if there is a problem go and solve it and don’t bring bureaucracy to say because of this or that you were not able to solve the problem”. So that was how we were able to exit debt from Nigeria when I was in DMO. I also brought that philosophy into my operation here in ICRC.
Once you bring a project here I look at the importance, what it will bring to the life of an ordinary Nigerian and see how we can make it work not how we are going to kill it.
Once you bring a project here I look at the importance, what it will bring to the life of an ordinary Nigerian and see how we can make it to work not how we are going to kill it
Now that you have been confirmed, what new things are you bringing to the table?
One of the things I intend to do is to make the staff very happy. To carry them along, ensure that their welfare is taken care of because a happy workforce enables you to work harder. Haven said that I need to prioritise new projects.
One of the pet projects I have in mind is smart training. Smart training in the sense that coming from Covid-19 we noticed that you can be at a far distance and still be in tune with what your peers are doing as it is done in other climes. So we are looking at that, to work with the ministry of education so that the issue of e-library is done in all the universities both federal and state owned universities. You know our scale of preference is the federal but in doing that we will also collaborate with states. Just like when they set up the Sovereign wealth fund, when the states saw the need for it they keyed into it. We will work with the Governors Forum so that they will also key into it.
Another project is how to stem medical tourism. Experience has shown that a lot of funds are wasted outside this country on medical bills. A lot of Nigerians travel even as nearby as Ghana for treatment that could be done here. As I speak with you now we are working with the NNPC, they have submitted 5 OBC’s and we have already treated one. They want to establish state of the art hospitals in each of the geopolitical zones of the country. So, if we can do that, it will go a long way in stemming medical tourism. Also if you go to our universities you will think that there is a ratio for pots and stoves because in the hostel every student has his or her own pots and stoves displayed in the open. This is not conducive for learning.
We have started working with many of the federal universities to see that we upscale students’ accommodation. We are already in discussions with the University of Abuja, Uyo, Enugu and others. So, we are going to look into this and ensure that students’ hostel accommodation is sorted out. What we need to do is to bring in PPP; the private sectors to invest in students’ accommodation. This will involve the construction of new ones and the rehabilitation of existing ones to make them conducive for learning.
The other aspect we intend to go into is to solve the issue of power in the country. Right now, there is a huge problem in that sector. Because, power is very key to some of the things we want to achieve. In this respect, we are working tirelessly with the ministry of water resources; they have quite a number of dams all over the country. We want to have (a proper) energy mix, we should not rely solely on gas, we should have thermal as well as coal plants. We intend to work with the ministry of Mines and solid minerals development on this. In China, even in South Africa they use coal for power, they are resorting back to coal. Why should we not use coal? Based on recent technology all we need to do is to take into cognizance the ozone layer and the atmospheric pollution.
You mentioned medical tourism, and that takes me back to what ICRC has been doing or has done. One, there is the issue of Garki General Hospital Abuja, a federal government project in which ICRC played a role. Also in 2019, ICRC made known plans to concession 12 federal hospitals and that brought some furore because some workers kicked against it. So, first, what is ICRC doing in terms of ensuring sanity as far as Garki Hospital is concerned, then what is the state of concession of the 12 federal hospitals?
In respect of the Garki General Hospital, it is a federal hospital. It is owned by the FCT. It is one of the legacy projects we inherited. Legacy project in the sense that it was done before ICRC came into being. However, by our Act we take custody of the agreement and the contract. Suffice it to say that the concession agreement fully petered out in the sense that it went through the full process of the 15-year period. The duration of the concession came to an end in the first quarter of 2022.
What is happening now is that we want to see how we can have a seamless transition from the concessionaire back to the guarantor so that there is no disruption of services. So that is the issue that is being worked out. Because when it was done like I told you it was a legacy project, there was no proper hand back clause. For every concession we always insist on a hand back clause.
What hand back clause entails is that, before the expiration of the period, the two parties would take stock of what is on ground; the equipment that you have been using over the years, the state you have to put them in before the federal government takes back its asset. That is the process that is being done. The government did not terminate the contract as it is erroneously being canvassed in some quarters.
Those currently managing the place must have spent millions of dollars to put it in the current condition. While the agreement said 15 years, if the operator has done well, is it not possible to find a way to allow that person to continue?
I quite agree with you that a lot has been spent. That’s the essence of the hand back clause. The hand back clause states that both parties will evaluate what has been invested. Have you been able to recoup your investment? If you have not been able to recoup your investment how many more years should be given to you to recoup your investment? If you have recouped your investment, is the guarantor ready to take over?
These are the issues to be discussed because we don’t want a concession in perpetuity. That’s why we have been discussing it with both parties. We have met with the FCT, we have also met with the concessioner. We are discussing with them to see that the whole of this thing is resolved amicably.
What about the 12 federal hospitals?
On the issue of the 12 federal hospitals we have been given an OBC. What we said is that there should be a pilot scheme because when you want to concession a hospital you don’t want a situation where you would leave the entire project in the hands of one person. So that’s one of the issues the federal ministry of health is working out with the proponents that look, go to each of the federal medical centres, discuss with them and see the areas that need government intervention because ICRC is not the owner of any of the projects, it’s the ministry.
Not only that, it is also very key that you sensitise and carry along all the stakeholders, including the doctors and those that use the facility. So, we have done some studies to show that look, the tariff we have been paid will not be more than what we are currently being paid and we are ensuring the doctors and other workers that no job will be lost, that what they’re going to do is to identify areas that need private sector intervention. The private sector will provide the equipment and run them for a period of time. Then, when the budgetary provision is given to you, you devote it to areas that the private sector would not want to invest in. These are the models we are working on and as soon as they are completed we would concession the 12 federal hospitals. But we don’t want to jump the gun.
The major problem we have with our infrastructure is lack of proper planning. The other issue is absence of funds from the capital market for infrastructure development.
When do you expect this project to be delivered because it has been on since 2019?
When it started, the equipment was bought through traditional procurement and there were no clauses for maintenance. So, those are the areas we have to work on and see that you have a sustainable PPP. As you are aware, in social infrastructure, there is not much money. In addition, you have to get liability gap funds where there is the need and all these have to be added in the budget. So you have to take a holistic analysis to ensure that when you come out you are able to have a very sound, sustainable project. That’s what I have in mind.
Nigeria and many other African countries are suffering from an infrastructure deficit. What do you think is the reason for that?
The major problem we have with our infrastructure is lack of proper planning. The other issue is absence of funds from the capital market for infrastructure development. I said proper planning in the sense that we used to have first development plan, second development plan, third development plan (in that manner). But during the military period we jettisoned the issue of development plans.
When you don’t do proper planning, there is no way you can address your infrastructure issues. For example, if you go to the UK and give birth, you must register the baby. If you don’t register the child, when the child grows up he/she can’t access their facilities. Why is it so? It is so because they have to plan for it. If you go to Lagos; Victoria Island, a lot of those areas used to be government houses. We had liaison offices of state governments but today, many of those places have been turned into commercial outfits. So, electricity consumption planned for those areas has expanded. If you go to some states, you now discover that the landlords will wake up today and decide to add two, three storeys to their buildings without government approval. That presupposes there will be an increase in consumption of electricity.
Once you don’t make appropriate planning, you can’t have sufficient infrastructure. So, that’s what the federal government has noticed. In fact, we just re-launched the revised national integrated master plan and ICRC played an important role. The pioneer DG mooted the idea that if you want to grow your infrastructure you need to have an integrated master plan.
You also discover that we don’t have a robust capital market. It is recently that the CBN is doing something about that. CBN has come up with the infrastructure fund. We also have over N5 trillion that if you have a properly developed project it will be supported with. Also there is now an infrastructure bank and other development banks in the country.
Don’t you think that even the ones we have already are not doing very well, for example the roads, rails, water system. I think if they are being managed well there won’t be ICRC. Isn’t it right to say that they are being concessioned because they are not doing well?
I beg to disagree with you in the sense that our population is about 215 million now so that puts pressure on our infrastructure. Hence, we need to increase our infrastructure. How do you do that? You have to create an enabling environment for the private sector to invest, you can’t do it alone. That is why we have ICRC to ensure that, especially section 11 of our Act, says that once you go through the gamut of our processes, no government will arbitrarily terminate your concession.
For instance, we are currently embarking on HMDI (Highway Development and Management Initiative), wherein we are going to concession 12 roads to the private sector under our PPP project. Right now, the government is negotiating with the preferred bidders. What we want to do is to free government resources from these 12 roads and let the private sector invest and maintain them. Government has no business doing business. When this project is completed, the amount that is freed from annual budgetary provisions will be used to care for other roads and you need to know that the roads that belong to the federal government is about 35 percent, it is the state and local governments that have the greater responsibility of maintaining many of the roads.
You are reported to have come from a rich background. Is your attitude to life and work influenced in any way by that?
Yes, what it has taught me is that I don’t see wealth as anything because as a child I was exposed to wealth. However, my father instilled discipline in us to the extent that when I was growing up, I used to go to my father’s cold store to sell fish before going to school. And you must account for every fish sold. That instilled integrity and fiscal discipline in us.
During holidays, we would go to my father’s farms and his filling station to sell fuel. Even when I was in university, I still went there. You do that before you get your stipends. Then the poultry, during long holidays, I also went to the poultry. So, I am exposed to all these things.
Then, the secondary school I went to, we had Bishop Ajomu, he was a disciplinarian. A very disciplined person that even teachers couldn’t come late. That is the reason one would notice if I have a meeting, I go there five minutes to the time. Those are the philosophies that have moulded me over the years; believing in the sanctity of labour, discipline and also taking into consideration my own background that some of my brothers are Muslims, some are Christians.