INTRODUCTION
In February 2024, the Federal Executive Council, under the directive of President Bola Ahmed Tinubu GCFR, approved the implementation of the recommendations in the Oronsaye Report.
Among these recommendations is the proposed merger of the Infrastructure Concession and Regulatory Commission (ICRC) with the Bureau of Public Enterprise (BPE), which will consolidate the oversight of PPPs, concessions, and privatisations under the National Council for privatisation (NCP), chaired by the Vice President of Nigeria.
This reform, if fully implemented, with the necessary legislative action, promises to be the most significant overhaul of Nigeria’s framework for the procurement of Public-Private Partnerships (PPPs) and infrastructure concessions at the federal level in the last twenty years.
INSTITUTIONAL AND REGULATORY FRAMEWORK FOR PPPS AT THE FEDERAL LEVEL
The Ministries Departments and Agencies of the Federal Government of Nigeria are generally responsible for project identification, prioritisation, development, and implementation within their respective sectors, they work in tandem with the regulatory agencies to facilitate successful PPP outcomes.
However, there are broadly two ways set out in the laws for federal PPP projects to be delivered i.e. taken from project identification through to commercial and financial close, when the contracts are signed between the government and the private sector party and the financing is approved and disbursed by the lenders.
These avenues for procurement are the ‘BPE route’ and the ‘ICRC route’ and they were established by the two governing laws: The Public Enterprises (Privatisation and Commercialisation) Act of 1999 and the Infrastructure Concession Regulatory Commission Act of 2005.
Infrastructure Concession Regulatory Commission Act 2005 (ICRC Act) is the law enabling and governing the participation of the private sector in the financing, construction, development, operation, or maintenance of infrastructure or development projects of a Federal Government Ministry, Agency Corporation or body through concession or contractual arrangements.
The ICRC Act establishes the Infrastructure Concession Regulatory Commission (ICRC), tasked with overseeing concession agreements and ensuring compliance.
Conversely, the Public Enterprise (Privatisation and Commercialisation) Act 1999 (PEPC Act) governs the partial or full privatisation and commercialisation of public enterprises in Nigeria. The PEPC Act established the National Council on Privatisation (NCP) under the chairmanship of the Vice President with the power to approve public enterprises to be privatised and commercialised. The PEPC Act also created the Bureau of Public Enterprises(BPE) with the mandate to implement and execute the NCP’s policy on privatisation and commercialisation as well as concessions by way of commercialisation.
Apart from the two main laws discussed above, the Public Procurement Act of 2007, which establishes the Bureau of Public procurement is also quite critical. This is the law and the body that oversees all public procurement processes including PPP project procurement, and ensures that all procurement methods, whether through the ICRC or the NCP, complies with legal and procedural requirements that safeguards public funds and promotes competition among bidders.
REGULATORY AMBIGUITY
The authorization of both the ICRC and the BPE to engage in concessionary activities has crystalized into the existing dichotomy between the ICRC and BPE, by presenting a maze of overlapping regulatory responsibilities. This ambiguity has confounded investors and stakeholders involved in PPPs in deciding the route to embark on in originating, bidding and closing PPP projects in Nigeria.
Although the ICRC route grants significant autonomy to Ministers and the heads of Ministries, Departments and Agencies (MDAs) to shape the entire process, and even to expedite transactions concerns linger over bid quality and project sustainability. For instance, is there a sufficient minimum mandatory scrutiny to ensure competitiveness and as a result ensuring the success of the best possible technical and financial bids with the most value for money under the ICRC bidding process?
Conversely, the NCP/BPE route is a rather slow process due to the multiple active committee approvals projects must receive at the level of the BPE and the NCP from the various inter al technical committees and from the Ministers and stakeholders in Council.
Recent directives such as the Presidential Directive of September 2020 issued by the Secretary to the Government of the Federation have attempted to clarify responsibilities between the agencies.
Under the Order, the ICRC is to serve as the regulatory Agency for PPP transactions, with powers to inspect, supervise as well as monitor projects and process, on order to ensure compliance with relevant laws, policies and regulations while the BPE shall be responsible for the concession transaction process and to act as the counterparty on behalf of the Federal Government alone or in conjunction with relevant MDAs on all infrastructure projects being developed on a public private partnership basis.
Despite the Federal Government’s efforts in streamlining the functions of the ICRC and BPE, operational disputes still persist.
CONCLUSION
The potential merger of the (CRC) with the Bureau of Public Enterprise (BPE) represents a significant step towards enhancing the clarity and efficiency of Public-Private Partnership (PPP) procurement in Nigeria, particularly at the federal level. For investors, both domestic and foreign, this merger holds the promise of streamlining regulatory processes, reducing ambiguity, and fostering a more conducive environment for infrastructure investment.
By consolidating regulatory oversight under a single entity and aligning institutional frameworks, the merger aims to provide investors with greater certainty, transparency, and consistency throughout the PPP project lifecycle. Moreover, the synergy between the ICRC and BPE, under the umbrella of the National Council for Privatization, chaired by the Vice President, is poised to facilitate stronger policy coordination and strategic direction, bolstering investor confidence and attracting much-needed capital for critical infrastructure development.
In the next part of this series we will examine the framework for executing PPP projects at the state or sub-national level, and the complexity of delivering projects across diverse regularly landscapes.
