The federal government has set new conditions in the concession policy for concessionaires to enhance funding and private sector participation in the road infrastructure development under the Highway Development Management Initiative, (HDMI).
The minister of Works, Engr. Nweze David Umahi, during a meeting with stakeholders and concessionaires stressed the need for a more realistic, transparent and productive approach to financing in the construction and maintenance of road projects under Public-Private Partnerships.
The minister in a statement by his special adviser on Media, Barr. Orji Uchenna Orji after a two-day meeting in his office identified certain articles and clauses in the existing concession agreements executed on 23rd May 2023 that needed to be reviewed both in the original concession agreement and the proposed addendum to ensure value for money, strengthen long term collaboration, transparency and accountability as well as degravitate potential Put- Call Option Agreement and litigation.
He raised issues for discussion including the issue of Put-Call Option Agreement (PCOA), additional facilities, performance security, shifting of encumbrances on site, the role of the independent engineer, competing road/alternate road, change in project scope, revision of toll fees, force majeure and stakeholder consensus building to ensure active citizenship participation in the effective take-off of project construction, tolling and maintenance. He recalled that contractors were already on some of the project sites before the signing of the concession agreement by concessionaires.
He noted further that innovations had been introduced to add value to the works sector , hence, the need for a review of the existing concession agreement and its addendum.
According to the statement, Umahi listed some of the requirements for the concessionaires to activate the implementation of their projects to include; their obligation to ensure mutual termination of existing contracts before taking over their respective sites, the need to show evidence of their capacity and readiness, including proof of source of funds for the project, payment of all outstanding debts owed to the existing contractors, evidence of technical and financial competence, and availability of company or partner’s equipment.
The minister restated that the Federal Ministry of Works would not disengage any existing contractor from the site in any of the projects unless the conditions precedent are complied with by concessionaires.
He therefore, presented the full details of the proposal of the Federal Ministry of Works on the matters of concern in the existing concession agreement inherited from the past administration.
He maintained that the essence of the review was to ensure that the concessionaires comply with the best practices and the innovations introduced by the Renewed Hope administration of President Bola Ahmed Tinubu.
He read the draft review as prepared by the Federal Ministry of Works, clause by clause and page by page.
“Part of the new addendum he presented was that the concessionaires shall construct compulsory facilities which shall include CCTV and solar streetlights, rest areas and any other additional facilities needed to improve travel safety and comfort of travellers on the entire project route.”
He subjected all the issues and concerns raised to extensive deliberation by the stakeholders, including the Minister of State for Works, Hon. Bello Muhammad Goronyo, Esq, the Permanent Secretary Secretary Cabinet Affairs Office of the Secretary to the Government of the Federation, Dr. Emanso U. Okop, the representatives of the Federal Ministry of Justice, Federal Ministry of Finance, Debt Management Office, Bureau on Public Procurement, Infrastructure Concession Regulatory Commission, Bureau of Public Enterprises, the team from Public-Private Partnerships Unit of the Federal Ministry of Works and directors of key departments as well as the concessionaires who were in the meeting including Africa Plus/BAAECC, Africa Finance Corp, Morta-Engine, Morta-Engil, Balosh Integrated Services, LIB Concession and Greg Jane Int. Limited.
In his remarks, the minister of State for Works tasked the concessionaires on commitment to the extant laws and regulations necessary for them to achieve the objectives of the HDMI.
He praised the passion and sense of patriotism of the minister of Works. Other stakeholders aligned themselves with the impression of the minister of State for Works on the efforts of the ministry in strengthening the concession agreement. The concessionaires also made contributions that aligned with areas of their concern.
Umahi in his closing remarks, said the articles and clauses as reviewed during the meeting would be exposed to the principal stakeholders (Heads of relevant MDAs) within seven days for further and final deliberation and that each of the concessionaires should communicate their acceptance of the agreement as reviewed or communicate the Federal Ministry of Works on grey areas so that such concerns would be reviewed in a meeting of the principal stakeholders.
