WHAT IS THE LEGAL FRAMEWORK FOR CONCESSIONS IN NIGERIA?

The article that precedes this dealt with the basics of Concessions and dwelt more in general terms. Today’s serves as a synopsis of some of the most important Nigerian Laws that may be related in one way or another to Concessions. The next and concluding piece will expose some of the key clauses in negotiating Concession Agreements.

Lets take a cursory look at some of our legislative bits and pieces:

Infrastructure Concession Regulatory Commission Act 2005

This is currently the mother of all Concession regulations as far as Federal Government projects are concerned. Section 1 empowers any Federal Government Ministry, Agency, Corporation or body to grant concessions for the financing, construction, operation or maintenance of any infrastructure.

This Act goes further to spell the do’s and do’nts that govern Concessions and sets up a Commission to regulate these Concessions. In as much as the Commission is yet to be emplaced, the Law in my opinion is one that ought to be complied with even in the absence of its enforcement mechanisms. When this Regulator is in place it is expected that the ICRC will become to Concessions what the Securities & Exchange Commission is to the Capital market.

Public Procurement Act 2007

This Act lays down rules for probity and transparency in the manner Government agencies enter into contracts. It also sets up the Bureau of Public Procurement that regulates all public procurement in accordance with the Act.

At first glance it may seem that the Public Procurement Act of 2007 has nothing to do with Infrastructure Concessions - the argument being that it should deal with “procurement” in the strict sense of “purchases” as we would generically know it in Nigeria. And some may say that a Concession is not really a purchase.

This argument falls apart on two counts.

Firstly in any Public Private Partnership (of which Concessions form a type) it is a settled fact that Governments are actually making a purchase: Government is buying the provision of a service to the public from the private sector investor.

Secondly, the Act itself in defining its level of coverage mentions three words: “works” “goods” and “services”.  I think that “works” will go beyond the traditional supply contracts that fall under “goods” or the typical consulting that falls under “services”. It will cover projects of any nature and magnitude.

One important part of the Public Procurement Act is the need for the issuance of a “Certificate of No Objection” by the Bureau of Public Procurement before the Federal Executive Council grants approvals to certain projects. This might be a minefield if parties do not take cognizance of it.

Utilities Charges Commission Act 1992

This Act basically established a Utilities Charges Commission that regulates prices on certain utilities. This means the price fixing between the Concessionaire and the Government agency should in certain instances obtain the blessing of this Commission. The Schedule to the Act mentions specific utilities: Nepa, Nitel, NNPC, Nigerian Airways, Nigerian Railway Corporation, Ferry Services Organizations, Nigerian Ports Authority, Road Transport Organizations, Nipost and such others as Commission determines from time to time.

Public Entp. (Privatization & Commercialization) Act 1999

This Act specifically sets up the Bureau of Public Enterprise (BPE) and gives them powers to privatize or commercialize certain Federal Government entities  listed in the Schedule to the Act. It follows that some of these entities will be commercialized by the grant of concessions and the BPE is the key driver of such a process. The Port Concessions is a good example at this time.

National Inland Waterways Authority Act

The National Inland Waterways Authority Act generally exercises ownership of the Inland Waterways which are vested in the Federal Government. The Act for example provides that no one can reclaim land from any Lagoon without the written consent of the National Inland Waterways Authority. It follows that if the Concession relates to a bridge or a motorway over an inland waterway, the National Inland Waterway may be on your radar in some way or the other - particularly if it involves dredging from the Lagoon.

Land Vesting Title Act

Talking more about dredging from the Lagoon, is the The Lands (Title Vesting etc.) Act which provides that all land reclaimed from Inland Waterways is the property of the Federal Government. Therefore this Act clearly prohibits a State or Local Government from purporting to grant a Concessionaire ownership of land reclaimed from the Lagoon in the course of the project. I am informed that there is a Federal High Court Judgement challenging this Act is some way or the other, but I have not been able to get the citation to cross check this fact.  This gives you some research to do then?

Highways Act 1971

Section 2 of the Highways Act empowers the Minister for Transportation to  build Toll gates, operate and collect Tolls on Federal Highways . It is therefore clear where the authority is as regards concessions that involve road tolling on Federal Highways.

The Lagos State Roads, Bridges and Highway Infrastructure Law 2005.

This law is restricted to Lagos state, it was enacted by the Lagos State House of Assembly as the legal framework upon which the Lekki–Epe Corridor Road Concession is based. It is to date the only Law that specifically deals with Road Concessions in Nigeria as compared to specific Road Concession Laws such as the California Toll Road Law or the United Kingdom New Roads & Streets Works Act 1991. This Law applies only to Lagos State Roads.

Closing this discourse is not a statement that these are the only legislations that have a bearing on Concessions in Nigeria – there are several others, and it gets wider as the subject matter of the Concession gets more interesting – mining, aviation, refineries etc.

Should you decide to embark on a voyage of further discovery, I urge you to do so, provided you kindly let me in on your discoveries!

Ayuli Jemide is the Lead Partner, DETAIL – a firm of commercial solicitors.