Only N14 Billion Has Been Spent On 2nd Niger Bridge So Far...

Only N14 Billion Has Been Spent On 2nd Niger Bridge So Far – NSIA (DETAILS)

By Vanguard on September 4, 2015
Photo Credit: BigStock

The Nigerian Sovereign Investment Authority, NSIA has said that it has only spent about N14 billion on the second Niger bridge project. The money include N10 billion, a part of N18.3 billion so far released by the Federal Government for the project, which has been disbursed for early construction work and $2.21 million, about N4.4 billion which has been expended as consultancy costs on the project.

In a statement made available to Vanguard, NSIA said $247,586, about N49 million has been spent on the due diligence phase of the project while $1.96 million, about N3.9 billion has been spent on the project development phase as consultancy services fees. These services, it noted, have included work in “legal, financial, technical and engineering and environmental social impact advisory, provided by various credible and well-recognised Nigerian and international professional services firms.”

Firms engaged in the consultancy services during the due diligence phase included: “FBN Capital as financial advisor; Murty International Limited as technical advisor; White & Case (UK) as legal advisor; WSP Group Africa, (South Africa) as technical advisor and Zephyrgold International (Nigeria) as technical advisor.”

On the project development phase, “Africa Finance Corporation (Nigeria) was engaged as financial advisor; Clifford Chance, UK and Templars (Nigeria) as legal advisors; Allot Nigeria Ltd and Takedo International, UK as traffic advisors; WSP Group Africa, (South Africa) as technical advisor and Aurecon (South Africa) as Environmental consultant.”

According to NSIA, the amount expended on consultancy services so far is less than one per cent of the estimated total cost of the project which was initially estimated to cost N108 billion excluding duties and Value Added Tax.

This is contrary to recent outcry by Edo State Governor, Mr. Adams Oshiomhole that about N140 billion had been expended on the project and that $700 million was surreptitiously moved from the Sovereign Wealth Fund, SWF, for the same bridge.

Oshiomhole had in a statement on Monday alleged that N140 billion had been spent on the second Niger bridge project. He had insisted that he will not back down on his claim that the Jonathan administration expended N140 billion on the yet to be completed second  Niger Bridge in Anambra State. He had equally maintained that the sum of $700 million was surreptitiously moved from the Sovereign Wealth Fund, SWF, for the same bridge, which has not risen above the foundation stage.

NSIA said under the Public Private Partnership, PPP arrangement for the project, the Federal Government made a N30 billion commitment to the project while the consortium is expected to raise the remaining funds for the project from Nigerian and international lenders and equity providers.

It said, the federal government has so far released N18 billion of which N10 billion has been disbursed for early construction works.

The statement reads: “NSIA assembled a team of Nigerian and international advisers with proven capabilities and global experience in Public Private Partnership, PPP infrastructure projects to ensure the Project gets first-class advisory services. These consultants were engaged through a rigorous and competitive procurement process.

To date, NSIA has spent a total of US$2.21 million on consultancy services on the two phases of the Project – US$247,586 on the due diligence phase; and US$1.96million on the project development phase. These services have included work in the following areas: Legal, Financial, Technical & Engineering and Environmental Social Impact Advisory, provided by various credible and well-recognised Nigeria and international professional services firms. Total consultancy services cost so far is less than one percent of the estimated project

“Whilst there is no standardized benchmark for transaction costs, the Europe, Investment Bank’s Economic and Financial Report No. 3 of 2005, indicates that, on the average, the level of transaction cost for the procurement phase of PPP projects over 10 per cent of the capital value of the relevant project in Ireland, the Netherland, Portugal, and the United Kingdom. This EIB survey estimate does not include costs related to contract monitoring and renegotiation in the operational phase of the relevant projects.

“NSIA’s technical consultants on this Project have been instrumental in value engineering the Project and reducing the initial project cost to the current level.

NSIA has put in place a multi-stage approval process for all disbursements, and which all payments involving construction are made only after approval by a third party engineering firm, which matches work completed against amounts due.

“NSIA has had promising engagement with potential lenders, which include many international investors. NSIA is rated by the US-based Sovereign Wealth Fund Institute as one of the most transparent sovereign wealth funds in the world. NSIA continues to uphold and abide by the highest standards of corporate governance, accountability and integrity.

“In this regard, NSIA’s accounts are audited by PricewaterhouseCoopers (PwC) and made publicly available within the first 90 days of the new calendar year. The 2013 and 2014 Annual Reports are available on NSIP website,”

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