ICRC to Strengthen Financial Evaluation for PPP Projects
By Patience Ikpeme
In a bid to ensure that public-private partnership (PPP) projects are not delayed, the Infrastructure Concession Regulatory Commission (ICRC) has announced that it will now evaluate the financial capabilities of potential concessionaires alongside their business cases before approving projects.
This move aims to forestall situations where project execution is hindered due to financial challenges.
This disclosure was made by the Director General of the ICRC, Dr. Jobson Oseodion Ewalefoh, during a courtesy visit to the Minister of Marine and Blue Economy, Adegboyega Oyetola in Abuja. According to Dr. Ewalefoh, the Commission will now take a more rigorous approach to financial evaluations to ensure that only capable investors can take on PPP projects.
“The Commission will henceforth evaluate financial capabilities of potential concessionaires along with their business cases to forestall a situation where project execution is delayed,” Dr. Ewalefoh stated.
Dr. Ewalefoh further emphasized the Commission’s commitment to pursuing all PPP projects that have already been approved by the Federal Executive Council (FEC) but have yet to commence. Some of these projects, he noted, were approved as far back as 2006, particularly in the port sector under the Ministry of Marine and Blue Economy.
Citing an example of a dry port project approved in 2006 but still stalled, he indicated that the ICRC would re-evaluate such projects to understand the reasons for the delays and work towards reaching a resolution.
“We are here to discuss with your ministry the potentials that we have and to understand the issues with some of the concessions that have been done before. We need to brainstorm and move things faster for our country,” he said during his visit to the minister.
Dr. Ewalefoh highlighted the Commission’s recent efforts to streamline its processes to accelerate PPP projects, ensuring that transactions are completed in record time. While the Commission is eager to start new PPP projects, it is also focused on optimizing existing ones to ensure they deliver value.
He urged the Ministry to collaborate with the ICRC in re-evaluating all PPP projects approved by the FEC more than a year ago but which have yet to begin. This re-evaluation will help identify challenges and determine if adjustments or terminations are necessary.
“We have come up with what is called ‘Condition Precedent to the Effectiveness of any PPP Contract’. This means that during negotiations, there will be a clear timeline to reach ‘financial close,’ which is the point when funds for project financing become accessible. Whether it’s three months or two years, once that time lapses without progress, the agreement stands terminated,” Dr. Ewalefoh explained.
However, he clarified that the goal of this policy is not to deter investors but to ensure that only serious investors with the financial capacity to deliver are considered, saving the government time and resources.
In response, the Minister of Marine and Blue Economy, Adegboyega Oyetola, agreed that many stalled projects were due to the inability of concessionaires to secure the necessary funds. He confirmed that his ministry had already written to these concessionaires and found that access to funding was the primary challenge.
“The solution to that is to have only very serious investors that have access to funds and not just a good business case,” the minister stated.
Mr Oyetola assured the ICRC of his ministry’s full support in accelerating PPP projects within the blue economy sector, adding that several new projects are already in the pipeline and would soon be forwarded to the ICRC to begin the PPP process.
