Sustainable Infrastructure: A Project Management Approach for PPP in Nigeria

1. Sustainable Infrastructure: A Project Management Approach to Public-Private Partnerships (PPP) in Nigeria Speaker: Kehinde Mosugu Editor: Tegan Mosugu

2. What is sustainable infrastructure? • The development that meets the needs of the present without compromising the ability of future generation to meet their own need.... (Brundtland Commission, 1987). • “ Sustainable infrastructure refers to the designing, building, and operating of these structural elements in ways that do not not diminish the social, economic and ecological processes required to maintain human equity, diversity, and the functionality of natural systems” (Community Research Connections, n.d).

4. Outlook on Nigeria’s Infrastructure • Infrastructure services are often inadequate to meet demand resulting in congestion or service rationing • Services are sometimes of low quality or reliability, while some areas are unserved • Inadequate infrastructure has had negative impact on our potential economic growth and general productivity. • Nigeria needs about NGN 1.1 quadrillion (US $3 trillion) in the next 30 years to fund infrastructure services Source: Trading Economics / Central Bank of Nigeria/National Integrated Infrastructure Master Plan (NIIMP)

8. What are public-private partnerships (PPP)? • Cross-sector collaboration : Public + Private sectors • Joint-venture arrangements that deliver projects faster within the defined time frame • Deliver quality infrastructure assets and/or services for the citizenry • Focus on outputs specification, project affordability, value for money, project efficiency, and equitable allocation of risks

9. Overview: Nigeria’s PPP Landscape • The Public Enterprises Act 1999 establishes a legal basis for privatization and commercialization of public enterprises • National Council on Privatization estimates: 70% of projects in Lagos State are expected to be PPP • Infrastructure Concession Regulatory Commission (ICRC) responsible for all PPP developments in the nation • 2017: An open data system for PPP projects was created for public viewing • 2018: ICRC presided over 22 PPP tenders • 2018 World Bank Data • $2.8 billion spent on the development of a gas pipeline • $2.5 billion spent on the development of Nigeria’s railway

10. Infrastructure Concession Regulatory Commission • Develops a transparent, efficient and equitable process for managing all aspects of PPP project implementation and monitoring • Safeguards efficient execution of any concession agreements or contracts entered into by the government • Ensures compliance with the ICRC Act by regulating PPP projects; ICRC Act assures that PPP projects ameliorate Nigeria’s physical infrastructure and economic development

11. PPP arrangements in Nigeria

12. PPP arrangements in Nigeria (cont.)

13. Projects & PPP Model Type

16. Challenges with PPP projects in Nigeria • Pushed too quickly and poorly structured • Laws and regulations governing PPP are not clear • Lack of capacity-building for ministries, departments and agencies • Inability to provide technical support for regulatory reform • Key stakeholders need more knowledge to plan, structure and implement complex PPPs • Lag time during service delivery as well as robust inefficiency

18. Key elements of a project management approach to PPP • Mitigates information asymmetry that arises during the course of the partnership • Government and private sector teams are so large that there is the tendency to work in silos • Serves as a nexus for the administrative logistics and designing mechanisms of coordination • Takes into consideration both the public sector’s legal perspective and the private sector’s profitability need • Spotlights the risks associated with implementing and executing the PPP • Difference in ‘rhythm’, specifically cash flow, red tape, assets, etc. Source: Project Management Institute, 2008

19. Advantages of adopting a Project Management approach to PPP • Benefits management plan • Establishes a clear and feasible roadmap, a greater return on investment • Improves stakeholder engagement • Factors stakeholder level of power and interest • Enhances market maturity • Improves credibility in PPP space • Improves maintenance culture and management practices • Handling of public infrastructure becomes efficient • Optimizes resource and capital allocation • Ensures that impact investing is at the forefront • Structures monitoring & controlling approaches

20. Conclusion/Recommendations • Adopt a project management approach to PPP projects; • This global practice would drive sustainable infrastructure that is a panacea for economic growth, social progress, and environmental protection. • Project management capacity building in all its entirety across all sectors should be encouraged and adopted in our national life; • This would make Nigeria more attractive to both local and foreign investments in our infrastructure market. • Project management should not be limited only to PPP project life cycle; it should be embraced even after the project closes to achieve long term sustainability