INVESTMENT OPPORTUNITIES IN NIGERIA’S
TRANSPORTATION SECTOR: ROAD INFRASTRUCTURE
Presented
by
Arc. Mike O. Onolememen
Honourable Minister of Works
Federal Republic of Nigeria
at
The Business and Investment Summit,
Dorchester Hotel, London
31st July, 2012
INTRODUCTION
 Nigeria has a total land area of about 925,000 sq. Km and a Population
of 167 Million People.
 Total Road Network: 200,000 km, out of which 65,000 km are paved.
 90% of all inland transportation is by road.
 The Federal Government has embarked on programme of road
rehabilitation, re-construction, expansion and construction of major
arterial highways.
 The major source of funding for the programme has been the annual
budgetary provision. In last two years a yearly estimate of $1.1bn was
provided in the budget (as against annual funding requirement of a
minimum of $2.6bn )
 The shortfall makes it imperative for the FMW to source for alternative
funding in order to keep the roads in good condition and plan for
future growth.
ROADS INFRASTRUCTURE: GATEWAY TO
NIGERIA’S ECONOMIC PROSPERITY
Ownership Structure
Economic Service Structure
10%
18%
Federal Roads
16%
66%
State Roads
Local Govt. Roads
20%
70%
CURRENT SUPPORT BY DEVELOPMENT PARTNERS
The Federal Roads Development Programme (FRDP):
 A $330m IDA credit operations support by the World Bank Group
 A 32.6m (GBP) Nigeria Infrastructure Advisory Facility ( NIAF) by DFID
 A $27m AFDB credit aimed at improving the efficiency of PPP projects.
PUBLIC PRIVATE PARTNERSHIP (PPP)
 The PPP model now complements Government funding of
infrastructure.
 Appropriate institution/policies such as the Infrastructure Concession
and Regulatory Commission (ICRC), Public Procurement Act, National
Tolling Policy and National Policy on PPP exist to guide all aspects of
PPP project development and implementation.
 The FMW has since developed Outline Business Cases for viable and
bankable major highways (Brown fields) and proposed new alignments
(Green fields) in the nation to attract the private sector and direct
foreign investments in the sector.
 The ICRC has provided the enabling environment for prospective investors.
There is competitive and transparent bidding process in line with the Public
Procurement Act and the National Policy on PPP
 Some preliminary analysis emanating from viability studies on some roads
indicates need for FGN support in terms of Viability Gap Funding (VGF) to
make the projects profitable for investors. This is in line with international
best practice.
LIST OF VIABLE HIGHWAY PROJECTS FOR
PPP OPPORTUNITIES
S/N
ROADS/BRIDGES
DISTANCE
REMARKS
ON-GOING PPP HIGHWAY PROJECTS
1
Lagos – Ibadan Expressway
106 Km
Awarded concession being
renegotiated to meet new
challenges
2
Gutto – Bagana Bridge across Benue River
1.35km Bridge
& 65 Km Road
Concession is being
reviewed to meet new
challenges
PPP PROJECTS UNDER PROCUREMENT
1
Construction of 2nd Niger bridge at
Asaba/Onitsha
2km
Appointment of TA has
received a “No Objection”
from BPP, and awaiting
FEC’s approval.
2
Access Road to Murtala Mohammed
International Airport Road, Ikeja, Lagos
2.8 Km
Appointment of TA has
received a “No Objection”
from BPP, and awaiting
FEC’s approval.
3
Construction of a bridge over River Niger at
Nupeko, Niger State
950m
OBC concluded by the TA.
LIST OF VIABLE HIGHWAY PROJECTS FOR
PPP OPPORTUNITIES (CNTD.)
S/N
ROADS/BRIDGES
DISTANCE
REMARKS
PROPOSED PPP HIGHWAY PROJECTS WITH OBC COMPLETED
1
Enugu – Port Harcourt Dual Carriageway
210 Km
OBC completed by
the TA.
2
Lagos – Isewin – Kishi – Kaiama Road
414 Km
OBC completed by
the TA.
3
Kiama – Bahama – Koaje – Gwambu – Fokku – Sokoto 631 Km
Road
OBC completed by
the TA.
4
Construction of a bridge over River Benue at Buruku,
Benue State
OBC completed by
the TA.
5
Construction of a bridge over River Benue at Ibi along 880 m
Shendam - Wukari Road.
1 Km
OBC completed by
the TA.
LIST OF VIABLE HIGHWAY PROJECTS FOR
PPP OPPORTUNITIES (CNTD.)
S/N
ROADS/BRIDGES
DISTANCE
REMARKS
PROPOSED PPP HIGHWAY PROJECTS WITH FEASIBILITY /VIABILITY STUDIES YET TO COMMENCE
1
Bodo-Bonny Road with a bridge across Opobo
channel to the Island of Bonny in Rivers state
39 Km
OBC studies to be
carried out.
2
Ilorin-Jebba-Mokwa-Kaduna Road
3
Keffi-Awkwanga-Lafia-Makurdi Road
597 km
OBC studies to be
carried out.
4
Lokoja-Ajaokuta-Ogbulafo-9th Mile Road
160 Km
OBC studies to be
carried out.
5
Akwanga-Jos Road
218 Km
OBC studies to be
carried out.
6
Dualization of Enugu ( 9th Mile ) – Otukpo – Makurdi
Road
261 Km
OBC studies to be
carried out.
7
Dualization of Owerri – Aba Road
60 Km
OBC studies to be
carried out.
OBC studies to be
carried out.
LIST OF VIABLE HIGHWAY PROJECTS FOR
PPP OPPORTUNITIES (CNTD.)
S/N
ROADS/BRIDGES
DISTANCE
REMARKS
PROPOSED PPP HIGHWAY PROJECTS WITH FEASIBILITY /VIABILITY STUDIES YET TO COMMENCE
6
Phase I : 2nd Lagos outer ring Road; Tin Can Island –
74 Km
Igando – Lagos/Otta road interchange – Lagos/Ibadan
expressway
OBC studies to be
carried out.
7
Phase II : 2nd Lagos outer ring Road; Lekki – Ikorodu –
- Shagamu/ Benin expressway
OBC studies to be
carried out.
25 Km
PROCUREMENT OF THE 2ND NIGER BRIDGE
LINKING ANAMBRA AND DELTA STATES
Description
Action by
Expected Date
2012
2013
1 2 3 4 5 6 7 8 9 # # # 1 2 3 4 5 6 7 8 9 # # #
Return of proposals for Transaction Advisory
Services
Techn. Advisors / FMW
12th April 2012
Commencement of Transaction Advisory Services
Techn. Advisor
14th May 2012
Return of Outline Technical Proposals by Bidders for
Techn. Advisor
Concession
28th May 2012
Commencement of full ESIA by TA
Techn. Advisor
4th June 2012
Submission of Draft OBC by TA
Techn. Advisor
23rd July 2012
Issue of Request for Proposal (RFP) for the
Concession
Techn. Advisor / FMW
6th August 2012
Return of Financial Proposals for Concession
Bidders
30th October 2012
Submission of Evaluation Report and Selection of
Preferred Bidder
Bidders
12th November 2012
Completion of ESIA
Bidders
18th February 2013
Submission of Full Business Case to FEC
Techn. Advisor / FMW
26th February 2013
Commercial Close
Preferred Bidder
10th June 2013
Financial Close
Preferred Bidder
5th August 2013
PROCUREMENT OF THE MURTALA MOHAMMED
INTERNATIONAL AIRPORT
Description
Action by
Expected Date
2012
2013
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 # # #
Return of proposals for Transaction Advisory
Services
Techn. Advisors / FMW 12th April 2012
Commencement of Transaction Advisory Services Techn. Advisor
14th May 2012
Return of Outline Technical Proposals by Bidders
for Concession
Techn. Advisor
28th May 2012
Submission of Draft OBC by TA
Techn. Advisor
23rd July 2012
Issue of Request for Proposal (RFP) for the
Concession
Techn. Advisor / FMW
6th August 2012
Return of Financial Proposals for Concession
Bidders
30th October 2012
Submission of Evaluation Report and Selection of
Preferred Bidder
Bidders
12th November 2012
Submission of Full Business Case to FEC
Techn. Advisor / FMW
26th November 2012
Commercial Close
Preferred Bidder
4th March 2013
Financial Close
Preferred Bidder
1st April 2013
NIGERIA MAP SHOWING LOCATIONS OF
SOME PLANNED PPP PROJECTS
BRIDGE OVER RIVER
BENUE AT IBI
RIVER NIGER BRIDGE
AT NUPEKO
MURTALA MOHAMMED
INT‘L AIRPORT ROAD
RIVER KATSINA ALA
BRIDGE AT BURUKU
2ND NIGER BRIDGE AT
ONITSHA/ASABA
ENUGU-PORTHARCOURT
ROAD
BRIDGING THE ROAD INFRASTRUCTURE GAP
The FMW has developed a new plan for Green field projects; The Strategic
Highway Investment for Transformation (SHIFT) Program:
 The Golden Triangle Super-Highway is conceived to improve the
nation’s highways stock and provide the much needed support for the
economy.
 The Project will be driven by the private sector.
 Federal Government to provide the Right of Way (ROW) and offer
guarantees in form of Viability Gap Funding (VGF) on uneconomical
stretches along the route.
 Project represents a Paradigm Shift in Infrastructure Development.
 It entails a Shift in Institutional Structures.
 It represents a Shift in Mechanism for financing roads.
 It highlights a Shift from Public to Private Sector leadership in the
development of road infrastucture.
SHIFT PROGRAMME
(WHAT WE ARE CURRENTLY DOING)
S/N
Action
Finance
Comments
1
Completion of On-going projects at
advanced stages of completion
FG/SURE-P
On-going
2
Routine and Periodic Maintenance of
Federal Roads
FG/5% FUEL
SURCHARGE
On-going
3
Rehabilitation of Federal Roads
FG/SGs/Multi-lateral
Agencies (AfDB;
World Bank)
On-going
4
Upgrading of Major Federal Trunk
Roads
PPP
Feasibility studies
On-going
5
Greenfield Projects (Golden Triangle
Super-Highway)
PPP
Detailed Route
identification
On-going
6
Lagos Outer Ring Road
PPP
Design Completed
7
Institutional Reforms
FMW, BPE,
World Bank & DFID
Process On-going
GOLDEN (ECONOMIC) TRIANGLE SUPER-HIGHWAY
KAN
O
FUNT
UA
ZARI
A
BIRNIN
GWARI
KADU
NA
SAMINA
KA
JO
S
MINN
A
MOK
WA
BIDA
ABUJ
A
ILORI
N
LAFIA
OGBOMO
SHO
LOKOJ
A
OSHO
GBO
MAKUR
DI
IBAD
AN
OTUK
PA
ORE
LAGO
S
ENUG
U
BENI
N
ONITS
HA
OKIG
WE
WAR
RI
OWE
RRI
YENAG
OA
PORTHARC
OURT
UMUA
HIA
AB
A
LEGEND
PROPOSED GOLDEN
(ECONOMIC) TRIANGLE
SUPER-HIGHWAY
SUPER-HIGHWAY LINKS TO
MAJOR CITIES
KEY FEATURES OF THE GOLDEN (ECONOMIC)
TRIANGLE SUPER-HIGHWAY







4 to 6 lanes; entirely new super-highway
Connects key economic hubs in the country
Within 1hr of 30 cities and state capitals
Crosses or within reach of 20 states of the Federation
It will add approx. 5,000km to the national network of roads in
Nigeria
It will ensure the provision of world leading services on public
highway facilities as well as attract Real Estate development along
the ROW
Attraction of Direct Foreign Investment and Private sector finances
with return on investment through tolling (PPP’s)

New economies will be created along the super highway corridor (e.g.
tourism in the coastal alignment)

Precedence: High growth economies: China, India, Brazil, Malaysia
etc
CONCLUSION
 The Nigerian government has created an enabling environment for
infrastructure development through the use of Public Private
Partnerships (PPP).
 PPPs in the infrastructure sector will leverage on available huge
private sector funds (DFI’s) to fill the funding gap in providing
infrastructure in the country.
 Investment through this new approach for development of road
infrastructure in Nigeria presents a lot of opportunities to local and
international investors and will lead to a boost in the economy of
the country and good return on investment for potential investors.
THANK YOU!