The Nation Newspaper

Tag: Infrastructure Concession Regulatory Commission (ICRC)

  • Sirika confirms date for national airline

    The proposed national airline for Nigeria would be unveiled before the end of the year, the Minister of State for Aviation Sen. Hadi Sirika has confirmed.

    Sirika, a former pilot, gave the assurance while receiving the Outline Business Case Certificate of Compliance for the establishment of the airline from Mr Chidi Izuwah, the Director General, Infrastructure Concession Regulatory Commission (ICRC).

    The Minister said that the presentation of the Certificate was a testament on how far the project had gone.

    The proposed airline will gulp $8.8million preliminary cost and $300 million as take-off cost.

    The Nigerian government is not fully funding the airline as it has adopted midwifing it via the option of a Public Private partnership, to deliver a national carrier that would stand the test of time and be world class in operation and management.

    According to Sirika, Nigeria will receive the first set of five airplanes for the airliner on 19 December.

    The airline will make profit in three years after operations, he said.

    “We will make the investments and follow the business plan through private sector management.

    “We intend to get a 30 aircraft market in five years. But we will begin with five aircraft on the day of lunch. It was not clear whether an order has been made for the aircraft, but the minister in May met a team from Boeing in Abuja.

    “At Farnborough International Public Airshow coming July 18, 2018 in London, we will unveil the name, logo, colour scheme, the structure and the type of airplane about the national carrier.

    “We will also place the order for the aircraft at the event,” he said.

    Sirika explained that the government would step in to cover the funding gap at the onset and ease out thereafter.

    He said the government would not get involved in the management of the national carrier.

    He said Nigeria’s population of over 180 million people is huge enough to support aviation, adding that the airline would take advantage of Bilateral Air Service Agreement (BASA) that the country had with over 70 countries.

    According to him, it will also take advantage of the Africa Single Air Transport Market and will be the best player if the government gets it right.

    “But if we don’t, it will become a threat to us. But I believe we are on the right track.

    The minister also gave an assurance that the national carrier would not kill the domestic airlines operating in the country.

    The Director General of ICRC, Izuwah, said the presentation of the Certificate of Compliance was an official green light to proceed with the procurement process.

    He explained that the government would bring its contribution to kickstart the airline, adding that the amount of equity the partners would hold would determine government contribution.

    According to him, start up cost over the next three years is about $300 million, but pre-start-up is $8.8 million.

    “The rest of the investment will be equity injection which will happen in tranches because you do not need all the monies at once.

    External capital injection also depends on the profitability of the airline.

    “Though, you need that initial government financial to make it take off, but what is important is that the national carrier will be entirely private sector controlled.

    “There will be zero government interference. But if that happens, it invalidates the certificate and the entire process.

    “This is a bankable business, and the government will get a strategic partner who will invest in the national carrier and when we get through the bidding process, more facts will emerge.

    “The government will have to spend the pre-start up cost like the brand name, the office and other start up.

    “ It will be a world class airline with domestic, regional and international operations,” he said.

  • ICRC moves to resolve concession disputes between FAAN, MMA2

    ICRC moves to resolve concession disputes between FAAN, MMA2

    The Infrastructure Concession Regulatory Commission ( ICRC ) said on Monday that it will deploy everything within its ability to ensure the concession dispute between the Federal Airports Authority of Nigeria ( FAAN ) and Bi-Courtney Aviation Services is resolved.
    The Commission, which is saddled with the responsibility of monitoring and ensuring the efficient execution of all A Public-Private Partnership (PPP) projects entered  into by MDAs on behalf of the Federal Government said it has continued to engage Hadi Sirika, the Minister of State on Aviation since his  assumption of office on these challenges and believe they will be resolved soon enough in order to strengthen the relationship between the parties.
    Recall that the MMA2 and the Hotel and Conference Centre concessions awarded to Bi-Courtney Aviation Services Limited as a PPP project for the design, engineering, procurement, construction, completion, commissioning, operations and transfer has been  experiencing  several challenges.
    The terminal which took off in 2007 was given out in concession by FAAN, as representative of the federal government on Build, Operate and Transfer (BOT) basis, but while BASL insists that the concession agreement was for 36 years and that the General Aviation Terminal (GAT) belongs to the company in cognizance of the agreement, FAAN insists that it did not endorse 36 years for the concession but 12 years and that GAT was not part of the agreement.
    Speaking during a visit by the commission to MMA2, yesterday, Chidi Izuwah, acting Director General ICRC said he was aware of the challenges between the both parties adding that “We want to listen to both parties as an independent regulator, we want to physically access the situation and challenges on ground in order to Bette appreciate the positions by FAAN and Bi-Courtney and thereafter suggest possible line of action in resolving these issues.
    “We are interested in having an update from the parties on the performance of the related projects; we want to understand the challenges facing the operators, as well as the grantor of the contracts and the various steps taken towards resolving these challenges; we want to hear from the parties their requests to the government in ensuring the projects are efficiently implemented for the overall benefits to the government.”
    Also speaking during the visit, Wale Babalakin, Chairman , Bi-Courtney Aviation Services said if Nigeria intends to encourage private sector participation in the infrastructural development of the country it must abide by international regulations; government and its agencies must respect and abide by concession agreements.
    Babalakin denied the allegation that it was Bi-Courtney that drafted the concession agreement and also noted that the company was not the winner of the concession, but Royal Standerton, which was the preferred bidder; however, Bi-Courtney inherited the concession when the later could not meet the pace of work expected by the federal government.
    Also speaking on behalf of FAAN, Monica Alphonse, the Deputy General Manager, Public Private Partnership, said that GAT has never been part of the concession agreement and that the monopoly status that stated that no other airport terminal should be developed during the course of the concession period by BASL may have taken cognizance of the fact that the concession was for 12 years.
    Alphonse described such clauses that gave BASL such advantage as antitrust and pro-monopoly, adding that the agreement should have been renegotiated if the concession was designed for 36 years and noted, that “such agreement is repugnant to natural justice.”
    She said that FAAN was willing to ensure that the problem between it and BASL over the concession was resolved. BASL officials also spoke in the same vein.
  • National carrier will be private sector driven – Sirika

    National carrier will be private sector driven – Sirika

    The Minister of State for Aviation, Sen. Hadi Sirika, says the proposed national carrier will be private sector driven.

    He said that would avoid the mistakes that led to the failure of the defunct Nigerian Airways.

    Sirika stated this on the sideline of the ongoing International Civil Aviation Organisation World Aviation Forum on Wednesday in Abuja.

    The theme of the forum is “Financing the Development of Aviation Infrastructure.”

    He said that stakeholders had agreed on a Public Private Partnership ( PPP ) arrangement for the new national carrier.

    The minister explained the Federal Government was following Infrastructure Concession Regulatory Commission ( ICRC ) guidelines to ensure that due processes in the arrangement.

    According to him, government has appointed the Transaction Advisers to work out modalities for the carrier.

    He said that government intended to go into alliances or joint ventures with other aircraft manufacturers to increase the reach and number of routes of the national carrier.

    Sirika added that the planned improvement of airport and air navigation infrastructure would support the expected growth from activities of the new carrier.

    “The question of national carrier, we all have agreement that this national carrier can only survive and succeed if it is private sector led and driven.

    “Public Private Partnerships (PPPs) in Nigeria are guided by act of parliament which is the ICRC Act 2007 that spelt out how to go about doing all these things.

    “We will be following them diligently. But unfortunately, it is cumbersome but we are following it so that we don’t run afoul of the law.

    “African Development Bank and other companies are discussing with us on this matter.

    “We are yet to meet with other stakeholders but we expect to meet them during this conference and after then, we will go and do our road shows.

    “The key thing here is having something that will stand the test of time so that we don’t start and falter.

    “It has happened to Nigeria before. The Air Nigeria was founded and at some point, it died because of something that was faulty.

    “We have learnt our lessons and we are not going to repeat it again,” he said.

    Sirika admitted that one of the major challenges of air transportation in Africa was high taxes.

    He said that the issue of high taxes would be discussed as a critical factor to encourage investors.

    “The lower the tax, the more flights in and the more flights in, the more passengers, more jobs, more revenue and that is within our master plan.’’

    NAN

  • ICRC okays NOUN ’s N150m multi-functional center deal

    ICRC okays NOUN ’s N150m multi-functional center deal

    The Infrastructure Concession Regulatory Commission ( ICRC ) has approved the National Open University ( NOUN ) proposal to build and operate a N150 million multi-functional center using the Public Private Partnership (PPP) model.

    The acting Director-General of ICRC, Mr Chidi Izuwah made this known on Sunday in Abuja as he officially handed over an Outline Business Certificate, which gave NOUN the go ahead to look for private investors.

    Izuwah also urged Federal Government universities to embrace PPP as the solution to bridging infrastructure deficit in the education sector.

    “One of the biggest problems universities have is student accommodation and the best way to provide student accommodation around the world is to partner with the private sector.

    “We are working with a committee of Vice Chancellors to develop a framework to allow them partner with the private sector in this regard.

    “When you go to many universities and you see where our future leaders stay it will make you very sad.

    “So we want to bring in the private sector to provide affordable housing for our students and recover their money over a period of time,” he said.

    Izuwah said also that PPP arrangements would improve the education system and improve the future of Nigerians.

    Meanwhile, the Vice-Chancellor of NOUN, Prof. Abdalla Adamu said that the proposed multi-functional center, would be situated at the University’s Headquarters.

    He said it would comprise food courts, ICT centers, supermarkets, banking services among others.

    “The cost estimate of the projects is about N150 million. We are looking at a situation where a private investor will build the complex, operate for a couple of years and then transfer it to the university.

    “At the end of the day, it’s a win win for both parties,” he said.

    NAN

  • 2017 Budget: Fashola replies NASS, decries resort to name-calling

    2017 Budget: Fashola replies NASS, decries resort to name-calling

    The Minister of Power, Works and Housing, Mr Babatunde Fashola, has expressed concern over the reaction of the National Assembly to his observations on the 2017 Budget as passed by the legislature.

    Fashola had in a recent interview, complained that the legislators had in approving the budget, reduced funds for some key projects of his ministry and allocated the money to some frivolous ones.

    He had disagreed with the practice where the legislature unilaterally altered the budget after putting members of the Executive through budget defence sessions and committee hearings.

    According to him, it amounted to a waste of tax-payers money and unnecessary distortion of orderly planning, for the lawmakers to unilaterally insert items not under the exclusive or concurrent lists.

    Specifically, Fashola had said that the lawmakers altered the budgetary allocations for rehabilitation of Lagos-Ibadan Expressway, the Bodo-Bonny road and the Kano-Maiduguri road.

    Other projects whose funds were tampered with the national assembly, he alleged, were the second Niger Bridge and the long-drawn Mambilla Hydropower project.

    He said the allocations were diverted to construction of scores of boreholes and primary health care centres, which were never discussed during the ministerial budget defence at the parliament.

    But the spokespersons of the Senate and the House of Representatives, in separate responses, had accused the minister of spreading “half-truths” and making “fallacious’’ statements.

    They accused the minister of wanting to hold on to the projects he complained about in order that he may continue to award contracts.

    In a statement on Monday in Abuja, Fashola said it was sad that the lawmakers could resort to name-calling even without understanding the facts of what they were getting into.

    He insisted that there was no subsisting concession agreement on the Lagos–Ibadan expressway as alleged by the national assembly.

    He explained that what the Infrastructure Concession Regulatory Commission (ICRC) had was a financing agreement from a consortium of banks, saying that there was no fallacy or half-truth in the allegation that the budgets were reduced.

    “The spokespersons admitted this much and now sought to rationalise it by a concession or financing arrangement that has failed to build the road since 2006.

    “The biggest momentum seen on the road was in 2016,” the minister said.

    On the second Niger Bridge, whose 2016 allocation, the lawmakers claimed, was not spent and had to be returned, Fashola said, “this displays very stark and worrisome gaps in knowledge of the spokesperson about the budget process he was addressing.’’

    According to him, a budget is just an approval of estimates of expenditure to be financed by cash from the Ministry of Finance.

    He said that the Ministry of Finance did not yet release any cash for the 2nd Niger Bridge and that no money was returned.

    The minister said that the continuation of early works could not start in May, 2016 when the budget was passed because of high water level in the River Niger.

    He also dismissed the allegation that the ministry under him was holding on to projects that could be funded through Public-Private-Partnership (PPP) as a tissue of lies.

    On the budget for Mambila Power Project, which was slashed because it contained a whopping N17 billion for Environmental Impact Assessment (EIA), the minister said that there was indeed a “mis-description’’ of the expenditure.

    According to him, what was described as a Budget Head for EIA was actually the nation’s counterpart funding to the China- EXIM loan to fund the building of the project.

    He said that the information on the budget for Mambilla project was brought to his attention only after it had been slashed.

    “In any event, allegations of half-truths are only a flawed response to the constitutional and developmental issues that have plagued Nigeria from 1999 about how to budget for the critical infrastructure in Nigeria.

    “It shows the conflict between the Executive that wants to build big federal highways, bridges, power plants, rail and dams on one hand and a Parliament that wants to do small things.

    “The parliament wants to do things like boreholes, health centres, street lights and supplying grinding machines,” he said.

    “As long as budgets, planned to deliver life-changing infrastructure, are cut into small pieces, Nigeria will continue to have small projects that are not life-changing and big projects that have not been completed in 17 years.

    “If a project would cost N15 billion and the contractor gets only a fraction of that, then things won’t move.

    “Success should be defined by how many projects an administration is able to complete or set on the path of irreversible completion and not how many poorly funded contracts are awarded,” Fashola added.

     

  • N12b is required to complete Lagos airport road- ICRC

    N12b is required to complete Lagos airport road- ICRC

    Mr Aminu Diko, the Director General, Infrastructure Concession Regulatory Commission (ICRC), has said that N12 billion would be required to complete the Lagos Airport road rehabilitation project, News Agency of Nigeria (NAN) reports.

    A statement issued in Abuja on Tuesday by ICRC Head of Communications, Mrs Deborah Okafor, said Diko made the call when he led a management team on a courtesy visit to the Minister of State for Aviation, Sen. Hadi Sirika.

    Diko also said that a private investor had indicated interest in expanding the facility into eight-lane road with flyovers and that the procurement process was ongoing, after which construction would begin.

    He also called on the ministry to speed up work on the concession of Nigeria’s four busiest airports – Lagos, Abuja, Port Harcourt and Kano.

    Diko advised on the setting up of a Project Delivery Team and a Steering Committee to be chaired by the minister.

    “Public-Private Partnerships (PPPs) are complex and take time to consummate and so there is need to kick-start the process by quickly establishing the project team that would see to the engagement of a transaction adviser to manage the development and procurement stages.

    “This should go hand in hand with the convening of extensive stakeholders’ consultations to ensure the success of the project in view of resistance to the planned concessions by aviation unions.”

    Sirika, in his response, said that government did not have the required funds to revamp the country’s infrastructure, and so the ministry would continue to encourage private sector intervention in service provision in the aviation industry.

    He said that with a population of over 170 million and a 38 per cent return on investment, Nigeria ranked among the best locations to do business.

    Sirika said that the trend around the world was to use other people’s money for infrastructure development.

    He said there were plans by the ministry to promote the development of cargo airports to be co-located with existing ones and which would be maintained by the private sector.

    Sirika said that talks were ongoing with Bi-Courtney Aviation Services Ltd, the concessionaire of the Murtala Mohammed Airport Terminal 2, with a view to resolving all pending issues.