PREPARED BY: TOJU EYETSEMITAN JUNE 2015

S E C O N D R I V E R N I G E R B R I D G E AT O N I T S H A - A S A B A I N A N A M B R A / D E LTA

S TAT E S N I G E R I A U N D E R P U B L I C P R I VAT E PA RT N E R S H I P S C H E M E

SECOND NIGER BRIDGE AT ONITSHA-ASABA NIGERIA UNDER PUBLIC PRIVATE PARTNERSHIP SCHEME

Infrastructure Development/Financing in Nigeria

PA

GE

| 2

Tanzania

Nigeria

Brazil

Egypt

India

Ghana

Kenya

China

South Africa

Malaysia

Singapore

Quality of Overall Infrastructure:

Nigeria Vs. Selected Emerging/Frontier Economies

2nd

117th

144th

29th

58th

69th

80th

86th

87th

88th

107th

Over the years, infrastructure projects in Nigeria have been financed majorly by the Federal Government, with attendant responsibilities for operation and maintenance. In recent times however, competing priorities coupled with steady population growth has strained the amount of capital allocation by the Government available for infrastructure development.

Although Nigeria has made evident progress in improving its infrastructure from increased budgetary allocation, recent reforms in various sectors and gradual reliance on the private sector for funding, adequately addressing the infrastructure challenges will require a substantially larger level of investment in infrastructure.

Nigeria currently invests around 7% of GDP on infrastructure, which is above the average for sub-Saharan Africa. Its core infrastructure stock currently stands at 35-40% of GDP which is significantly below the international benchmark of 70% of GDP. It is estimated that the country requires an annual investment of US$14.2 billion over the next ten years in order to bridge the current infrastructure gap.

In order to meet its infrastructure needs and to catch up with developing countries in other parts of the world, this study identifies and proposes Public-Private Partnership (PPP) as an appropriate platform for funding infrastructure projects which would ordinarily have been funded through federal allocation.

Given the large infrastructural deficit and scarcity of funds to sponsor capital projects, a redirection of Nigeria’s infrastructure development model in the medium to long term to capture PPP opportunities is highly imperative for sustainable growth.

Nigeria’s Infrastructure Sector Update

Source – Global Competitiveness Report - 2013

SECOND NIGER BRIDGE AT ONITSHA-ASABA NIGERIA UNDER PUBLIC PRIVATE PARTNERSHIP SCHEME

Second River Niger Bridge, Nigeria

The Federal Government of Nigeria, through the Federal Ministry of Works has proposed the construction of a second bridge across the River Niger between Onitsha in Anambra State and Asaba in Delta State (refer to Figures 1 - 6).

The bridge will be built south of the existing bridge and will provide an additional link between Asaba and Onitsha, having six lanes in total (three lanes in each direction). The total length of the bridge and access roads is approximately 12.5 km. The road and bridge will be a toll road on completion and will be used for commercial traffic while the old bridge will not be tolled and will be for the use of non-commercial traffic. Construction of the access road on the Asaba side of the river will require resettlement of households and a Resettlement Action Plan will be developed. It is estimated that the complete construction period will be four (4) years.

The FMW has entered into a Public Private Partnership with a Consortium made up of the NSIA Motorways Investment Company and Julius Berger. This contract is in the form of a concession so that the Consortium can manage the project for 25 years until it may be handed back to the Federal Ministry of Works.

The contract agreement for the construction of the bridge is in the form of a Design Build Operate and Transfer (DBOT) / Public Private Partnership (PPP) . The Consortium has been appointed as a private entity to ‘Design, Build and Operate’ the project during the concession period, allowing it to be transferred back to the FMW thereafter to operate.

Project Overview

Figure: 1

Figure: 2

SECOND NIGER BRIDGE AT ONITSHA-ASABA NIGERIA UNDER PUBLIC PRIVATE PARTNERSHIP SCHEME

Second River Niger Bridge, Nigeria

The proposed Second River Niger Bridge has sufficient motivation and the following advantages:

1. Reduces the strain on current bridge infrastructure;

2. Improves safety and security;

3. Eases traffic flow of transporters across this axis;

4. Improves health and security due to lower vehicle emissions which was exacerbated by the poor traffic management;

5. Creates opportunities for local residents within the commercial hub;

6. Improves the commercial viability of the immediate catchment area; and

7. Regenerates the social and economic life of the region.

Potential Problems the Project Aims to Solve

Figure: 3

Figure: 4

Potential Revenue Sources

Tolling of road users is the principal source of revenue.

A toll plaza section of approx. 500 m in length that would be wider than the typical road cross-section and would accommodate 20 lanes of traffic.

The station will be equipped with one toll cabin per lane.

This lane will is also equipped with a weighing station for trucks.

SECOND NIGER BRIDGE AT ONITSHA-ASABA NIGERIA UNDER PUBLIC PRIVATE PARTNERSHIP SCHEME

Second River Niger Bridge, Nigeria

Risk Allocation

Figure: 5

Figure: 6

Type of Risk FGN Concessionaire Shared

Design

Site

Construction

Completion

Force Majeure

Revenue

O&M

Performance

Political

Strategic

Key:

FGN – Federal Government of Nigeria