public private partnerships turbo charging lpg use6 learning from others oil companies setting up 60...
TRANSCRIPT
Public Private Partnerships &
Turbo Charging LPG Use
Engr. Chidi K. C. Izuwah Snr.DIRECTOR GENERAL/CEO
INFRASTRUCTURE CONCESSION REGULATORY COMMISSION26th- 27th November, 2019
at the Joint collaboration of NLPGA & LPG Summit, Federal Palace Hotel Lagos
1. Africa Infra Regulator
2. FoI Award – No. 1
3. Public Service Innovation Award – No.1
Recognition
3
DICON Sur JV PPP 25th October
4
Lekki Financial Close 23rd October
Table of Contents
• Learning from Others and Leadership Commitment
• The PPP Imperative
• Framework for PPPs in Nigeria
• PPP Advantages
• PPPs & Turbo Charging LPG Use
• LPG industry challenges in Nigeria
• Infrastructural gap in the LPG supply chain
• PPP Opportunities in LPG industry
• Advantages of Private Partnerships in the LPG industry
• Benefits of PPPs
• Nigeria’s PPP Journey
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Learning from Others
Oil companies setting up 60 LPG bottling plants under PPP mode
A bottling plant has many such sets with annual capacity of 120,000 tonnes per
annum while small private bottling plants would have the capacity of 30,000 tonnes
per annum each.PTI|
Dec 21, 2018, 09.20 PM IST
Read more at://economictimes.indiatimes.com/articleshow/67198063.cms?from=mdr&utm_source=contentofinterest&utm_medium=text&utm
_campaign=cppst
Private-Public Partnership LPG
Projects in Myanmar: Have the Floodgates
Finally Opened?— March 10, 2018 0 337
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“…..We also have a huge infrastructure deficit for which we require foreign capitaland expertise to supplement whatever resources we can marshal at home. Inessence, we seek public private partnerships in our quest for enhanced capital andexpertise.”
EXCERPTS OF SPEECH OF PRESIDENT MUHAMMADU BUHARI ON
AUGUST 23, 2015
Leadership Commitment
The PPP Imperative
Wide Infrastructure Gap
Growing demand for private sector participation in infrastructure
Small and depleting Government
resourcesUrgent need for alternative
funding of Infrastructure
A Public-Private Partnership is a contractual agreement between a public agency (federal, state or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility (Nat. Council on PPP USA)
Definition
The goal is to combine the best capabilities of the public and private sectors for mutual benefit
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ArrangementBetweenpublic&private
ProvisionOfservicesforpublicbenefitby
privatepartner
InvestmentsInand/ormanagementofpublic
assetsbyprivatepartner
TimePeriodForaspecifiedtime
RiskSharingOptimallybetweencontractingparties
StandardsFocusonqualityofservice/
performance
PaymentsLinkedtoperformance
7 Essential Conditions That Define Public Private Partnerships
Source: IDECK India
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The Infrastructure Concession Regulatory Commission Act(Establishment Etc,) Act 2005.
In 2009, the Federal Executive Council (FEC) approved a National Policyon PPP which provides guidance on PPP project structuring.
Presidential Circular of September 2013 directing All MDAs to engagewith the FMoF and ICRC PRIOR to commencing PPP projects. MDAs toestablish PPP units
Annual Report to the President presented every year in June.
Transparency and Competition
Framework for PPPs in Nigeria
Framework for PPPs in Nigeria
ICRC’s Functions:qRegulate Public Private Partnership (PPP) procurement by:
a. Guiding MDAs in structuring PPP transactions for both green field and brown field infrastructure – Pre Contract regulation
b. Taking custody of all executed agreements and ensuring compliance-Post Contract Regulation
qIssue PPP regulations and guidelinesqCollaborate with state governments to develop a sustainable nationalframework
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PPPs are Fundamentally Different
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Formal contract between public and private partner (over the years duration the service will be provided) – usually multiple years durationEntered through competitive procurementUsing output specification – government specifies ‘what’, private sector can define ‘how’With suitable risk allocation between partiesPutting private investment at riskWith regulation or contract management of performance of the private partner
ExampleGovernment defines output = connection to let 1,000 vehicles p.d. travel between islandsGovernment tenders for best solution over 30 years – e.g. ferry, tunnel, bridge??Government enters 30-year contract with private companyPrivate company designs, builds, finances bridge, then operates and maintains it for 30-yearsPrivate company receives payment if the bridge works and is available for trafficGovernment checks on safety and availabilityIf the bridge is closed, or unsafe, the private company looses money
PPP Advantages (1)
• What each party brings to a PPP
Legislation
Subsidies &Guarantees
Land
Rights of wayLong term vision
Operation &Maintenance
Design &Build innovation
Capital
Access to the market
Financing
Users
Public
SectorConcession
(SPV)
Private
Sector
Revenue
PPP Advantages (2)
• What each party gets from a PPP
Social function
PeopleMobility
Taxes
Economic development
Associatedbenefits
Environment protectionTime/cost savingService Quality
Concession
(SPV)
Private
Sector
Users
Public
Sector
Design & Construction Contract
OperationContract
Servicing of Debt
Incomes
Profit
PPPs & Turbo Charging LPG Use
Benefits of Public Private Partnerships(PPPs)
• Maximizes the use of each sector’s strength• Reduces development risk• Reduces public capital investment• Mobilizes excess or underutilized assets• Improves efficiencies/quicker completion• Improves service to the community• Improves cost effectiveness• Shares resources• Shares/allocates risks• Mutual rewards
Current per capita consumption of LPG in the region
LPG industry challenges in Nigeria
• Continuous deforestation as over 50% of households that still rely on firewood as cooking fuel.
• Prohibitive fee structures ( duties, importation procedures and fees)
• Nigeria is a net exporter of LPG in Africa, producing over 2 MTPA, and barely consumes 15% of the volumes while exporting the rest.
• Significant latent unmet demand
• Poor Infrastructure networks ( road networks, rail networks, etc)
Infrastructural gap in the LGP supply chain
ü Production/Supply : sub-standard products from some supply sources
ü Bulk transportation : Inefficiencies in shipping operations, inadequate low-draft vessels
ü Bulk storage : inadequate bulk storage facilities
ü Inland transportation & distribution: inadequate transportation infrastructure ( road networks/functional pipelines/rail network)
ü Cylinders & Accessories : no functioning cylinder manufacturing plant in-country
ü Retail Outlets : in adequate and unevenly spread receiving terminals, limited jetty availability
*Source: Nigeria LNG presentation
PPP Opportunities in LPG industry
1) Facilitate investments along the supply chain
2) Gas Infrastructure Financing ØMarketing Traders and shippers (Bulk supply) ØManufacturers of LPG Cylinders ØManufacturers of tanks/ appliances ØGas processing aggregation partnershipsØTerminal/Storage infrastructure investorsØGrowth of new entrants and plants ØSignificant demand
Advantages of Private Partnerships in the LPG industry
ü Enhancement of foreign capital
ü Private sector expertise and innovation
ü Eliminate subsidy burden - cars
ü Job creation
ü Tax base expansion
ü Increased competition amongst domestic LPG industry.
ü Encourage foreign trade with other countries with regulated imports and exports.
ü Economies of scale will ensure prices are reduced
ü Enhancement of technology that will bring about efficiency and safer practices
ü Reduce the debt burden of the country
PPP ENABLING ENVIRONMENT SUPPORT INITIATIVES
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• Nigeria Integrated Infrastructure Masterplan/ERGP
• Presidential Infrastructure Development Fund
• Ease of Doing Business (Accelerated PPP Procurement Process )
– RfQ/RfP
– Single Cabinet Approval
• Annuity PPPs
• Nigerian Sovereign Investment Authority (NSIA) and Third Party Infrastructure Guarantee Fund(InfraCredit)
• Amendment of ICRC Act
• PPP Units in MDAs
• Governance Documents – Ideck of India
• Federal Roads and Bridges Tolling Policy
• Standardization Efforts (Business Case, Contracts etc)
Nigeria’s PPP Journey
• As at 8th July, 2019, there are 69 post-contract PPP projects under implementation atthe ICRC Projects Disclosure Portal (www.ppp.icrc.gov.ng or www.icrc.gov.ng). Theportal is the first disclosure portal in the world, established in collaboration with theWorld Bank.
• As at July, 2019, there are 138 pre-contract projects at Development and Procurementphases at the ICRC website (www.icrc.gov.ng).
• Between 2010 and 2018, under the regulatory guidance of the ICRC, the NigerianGovernment has approved PPP projects worth almost USD8 Billion.
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PPP DASHBOARD
Screen shot of the Disclosure Portal
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MMA2 Airport and Ports Concession
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AFTER
BEFORE
Garki Hospital Abuja
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Three Large Hydro Power Plants
PPP Accomplishments
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1. Lekki Deepwater Port Financial Close
2. FMWPH Rooftop Solar PPP
3. Warehouse in a Box Medical Stores
4. NIWA Onitsha River Port
5. Ibom Deepwater Port Close to Commercial Close
6. PPP Portals for MSME, CRFN
7. Gurara 0 & M
8. Silos
9. AKK Pipeline and Central Railway Line Expansion
10. Farm Mechanization PPP
11. Ecowas Biometric Card
12. Warri Itakpe Line to Warri Deepsea Port
Every morning in Yankari, a Gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a Lion wakes up. It knows it must outrun the slowest Gazelle or it will starve to death.
It doesn't matter whether you are a Lion or a Gazelle... when the sun comes up, you'd better be running.
Infrastructure Concession Regulatory Commission
Plot 1270 Ayangba Street, Area 11 Garki Abuja, FCT, Nigeria. Email: [email protected], Website: www.icrc.gov.ng,
Phone: +234 94609600
Thank You