FG saves N500bn in privatisation of port infrastructure — DG, BPE
The Director-General of the Bureau of Public Enterprises, Mr Alex Okoh, has said that the Federal Government saved over N500billion from the privatisation of the ports infrastructure.
He made this assertion during a webinar session on “Public-Private Partnership as an alternative financing model in the maritime sector” hosted by the Nigeria-South Africa Chamber of Commerce and sponsored by SIFAX Group recently.
Okoh who was represented by Director, Infrastructure and Public-Private Partnership, Department of the Bureau of Public Enterprises, Amaechi Aloke, said involving the private sector saved the government a fortune.
According to him, the government has been able to make N538billion in a space of 11 years after the privatisation.
“One can say that the involvement of the private sector in the ports has paid off to the government. Based on our reviews, we can see from the slides that more than half a trillion has been generated either in the form of fees paid, throughput fees, investment in infrastructure, investment in other equipment.
“As a result of these, tax paid to the government came to a total of N538billion between 2006 and 2017. That is the kind of money the government would have lost if it had not done the reform in the sector.”
He explained that the government reformed the port structure in 2006 to make Nigeria a major destination for trade in the sub-region.
The Director-General, however, reiterated the need for an increase in the private sector involvement in the financing critical infrastructural development in the maritime sector in order for the industry to become a major revenue earner for the Federal Government.
Citing the success of the port concession as a justification for more private sector funding, wherein he revealed that the federal government’s revenue from the sector had more than doubled ten years post-concession, Okoh posits that competing needs for government’s lean resources has also made PPP a welcome option.
The BPE DG further revealed the Federal Government has simplified the PPP process which now allows for private sector players to scout for projects that can be financed through PPP model.
In his words: “The Bureau of Public Enterprises has been entrusted with a significant part of the PPP responsibilities in Nigeria through the Federal Government’s circular of September 2020. What this means in effect is that players in the country’s maritime and other key sectors of the economy can identify and suggest projects to the government through the BPE or relevant MDAs.
“Once these projects are examined, approval will be given to the relevant parties to undertake an appraisal, feasibility study or outline of a business case which will be scrutinised by the government. Thereafter, a tender will be published.
“The benefit of this is that the originator of the project will be allowed to provide a matching offer with that of the highest bidder and if the party is able to match this offer, they will be declared the preferred bidder.”
He urged the private sector to carefully identify the gap in transport infrastructures in the nation’s maritime sector and work towards providing solutions to these gaps.
Okoh noted that such investments in and around Nigeria’s ports will help reduce the high shipping and terminal charges and local transport to warehouse costs which will, in turn, make the country’s port more competitive and business-friendly in comparison to other African countries.
In his remarks, Group Executive Director, Corporate Services, SIFAX Group, Mr Bode Ojeniyi said the sponsors of the webinar, says that the subject matter was timely and germane given the huge infrastructural deficit in the sector that could be addressed with PPP.
He, however, urged that the government should do better at making the country more business-friendly by removing the crippling bureaucratic bottlenecks that are currently making investments in any sector very unattractive.
