By Tony Obiechina, Abuja

National Insurance Commission (NAICOM) and the Infrastructure Concession Regulatory Commission (ICRC) have agreed to partner to implement insurance provisions for assets under public private partnership arrangements, as outlined in the law.This was agreed when the Commissioner for Insurance, Olusegun Ayo Omosehin paid a visit to the Director General of ICRC, Dr Jobson Oseodion Ewalefoh in Abuja yesterday.

According to the two agencies, the partnership marks a significant milestone in Nigeria’s infrastructure development. It was agreed that infrastructure projects are properly insured, in order to mitigate potential risks, protect investments, and promote economic growth.The Commissioner for Insurance stated that as the apex insurance regulator, NAICOM plays a crucial role in advising the government on insurance matters and ensuring the protection of strategic government assets.ICRC has been driving public private partnerships to fast-track infrastructure development in Nigeria and by working together, NAICOM and ICRC can ensure that insurance coverage for PPP projects is robust, reliable, and compliant with regulatory requirements.NAICOM said in a statement, “This partnership will likely have a positive impact on Nigeria’s infrastructure development, attracting more investments and promoting economic growth.”A joint committee was set to draw up modalities for the partnership and a strong statement for compliance with insurance requirements in any contract going forward will be collectively issued by January 2025.”

By Ubong Ukpong, Abuja

Stakeholders in the public procurement sector yesterday kicked against procurement Act amendment, seeking to punish contractors for unnecessarily delaying completion, or abandonment of projects awarded to them.Director General of the Bureau for Public Procurement (BPP), Dr.

Adebowale Adedokun and the immediate past Director General of the agency, Emeka Ezeh both told the House of Representatives committee on Public Procurement that there was no need amending the law to punish contractors, as such provisions were always contained in the contract. Dr. Adedokun said the Public Procurement Act, 2007 harmonized the existing government policies and practices by regulating, setting standards and developing the legal framework for Public Procurement in Nigeria to give room for competition and transparency.He said, “The intending amendment seeks to sanction contractors who delay in completion of contract within a stipulated time. This sanction globally is generally included in the conditions of contract and it is outside the intendment of the PPA.“The Public Procurement Act does not regulate contract implementation rather the standard condition of contract and contract of agreement regulates whatever transpires after a validly awarded contract.“In this regard, the clauses in the contract agreement prescribing sanctions for contractors as included in the Bureau’s Standard Bidding Documents should suffice. Therefore, the proposal to incorporate contract implementation procedures into the Public Procurement Act is overbearing and will negate the intentions of its establishment.“The Bureau, as the regulatory body and by the powers conferred on it by the Act, has issued Standard Bidding Documents and Standard Conditions of Contract, which are of global standards and have already catered penalty for erring contractors.“The Bureau, therefore recommends that the Committee should rather help in the proper implementation and enforcement of the existing laws by ensuring that funds for contracts awarded should be provided as and when due.“This is because the solution the amendment intends to provide is not a matter of law but rather of implementations, as a procuring entity who fails to release funds to a contractor for timely completion of a project, will be guilty of the contractor’s delay in completion of the project.“In view of the above, the Bureau respectfully request the committee to reconsider the amendment and seeks for the Parliament’s support for proper implementation of the Public Procurement Act to enhance efficiency in the public Procurement space in Nigeria.”The immediate past Director General of BPP, Emeka Ezeh also argued that even though the intendment of the proposed amendment on the surface seems noble and well meaning, it appeared focused on addressing an effect rather than the cause of an obvious challenge in our contracting environment.He said, “I will rather advise that the challenge be seen from a holistic picture Starting from needs assessment to projects design/preparation/projects scoping through adequate budgetary provision to procurement process (selection of contractor) to contract execution( project implementation).“The proposed amendment tends to focus on the last leg of the project delivery chain which is a contract management issue not usually covered by public procurement legislation. However, a project can be compromised at any of the stages leading to delay in completion.“For instance, if a need is not well articulated, the solution provided by the project could lead to the risk of abandonment or if the design was not competently done or due to time constraint detailed feasibility/engineering designs were not done, at the stage of implementation, issues of variations/augmentations could arise.“In the same vein, if during procurement, an incompetent contractor is selected due to abuse in the application of relevant guidelines, the project is destined to be at risk of delays.“Again, even if there were no risks up to contract award which is what the proposed amendment assumes, a project could be delayed due to nonpayment as and when due or due to new government fiscal policies that could impact on the cost of the project.“The delays in adjusting the contract sum to align with such policies could pose a risk to the project.“More importantly, the ill the amendment intends to cure is adequately contained as a standard provision in our standard conditions of contract. For every major project, this is part of the conditions of contract.“Any engineer or Quantity Surveyor or Architect worth his certificate knows this as a matter of fact. Professionally, it is called “liquidated damage” —which is a penalty imposed on a contractor subject to a maximum of 5%, usually for delay in completing a part or all of a project in line with the program of work except if the delay is due to force majeure or an extension of time duly granted by the employer through the engineer.”Chairman of the House Committee on Public Procurement, Unyime Idem said one mischief that has plagued the public procurement space in the country is the practice by contractors to delay projections unduly, intentionally, and without any fear of sanctions, adding that this mischief is driven by a number of factors, including incompetence of the contractors, non – prioritization of Federal Government projects, intention to apply for price variation, bad faith, compromise, absence of patriotism, economic sabotage, corruption, among others.He said members of the House have studied the difference in culture and approach in other jurisdictions when it comes to the issue of executing government projects, citing Egypt where contractors are required to work both day and night and all through the week as an example.According to him, through that practice, project time is reduced by about 50% to 60%, and a project that should ordinarily take 24 months may take 12 months or less, while in Nigeria, a project that should take 12 months may take a minimum of 5 to 6 years, with the chances of such projects being abandoned standing at about 70% to 75%.In addition, said over 90% of capital projects are eventually subjected to requests for variation, which in part is driven by the issue of delay and poor project management that results in increased costs, driven by factors like inflation and devaluation.He said, “While a contractor may argue that inflation and devaluation may impact its costs, it is expected that each contractor must have shown enough financial capacity, which would have contributed to the award of the contract.“It is therefore expected that the contractor should deploy the best project management practice by purchasing materials upfront and locking down prices, if possible.“I must also add that this culture of project delays preceded the current problem of inflation and devaluation. Hence, it is a problem that we now must address from a legislative perspective.“The instant problem impacts governance in Nigeria and has affected our ability to deliver the dividends of democracy to the Nigerian people.“We as legislators engage with our constituents, who are at the grassroots level, and when we are confronted with the issue of delayed and/or abandoned projects, we struggle to find answers and explanations.”

By David Torough, Abuja

The Presidency yesterday denied that it plans to impoverish northern Nigeria by the Tax Reform Bills.It has been said that if passed into law, Abuja, Lagos and Rivers will benefit to the detriment of northern states.The bill, which passed its second reading in the Senate last week, is facing strong resistance, particularly from Northern elite.

Groups like the Northern Governors Forum (NGF), Northern Elders Forum (NEF), the National Economic Council (NEC), and Senator Mohammed Ali Ndume have called for its withdrawal, arguing it neglects regional interests. The Special Adviser to the President on Information and Strategy, Bayo Onanuga reacted insisting that the bills are to better the lot of Nigerians.Onanuga said in a statement: “Instead, they aim to enhance the quality of life for Nigerians, especially the disadvantaged, who are trying to make a living.“Since the public debate around the transformative tax bills before the National Assembly began in the last few weeks, various political actors and commentators have tried to obfuscate the facts, deliberately misinforming and misleading the public.“Unfortunately, most reactions are not grounded in facts, reality, or sufficient knowledge of the bills. While some commentators have attempted to incite the people against lawmakers, others have polarized one section of the country against another.“The tax reform bills will not make Lagos or Rivers more affluent and other parts of the country, as recklessly canvassed, poorer.“The bills will not destroy the economy of any section of the country. Instead, they aim to enhance the quality of life for Nigerians, especially the disadvantaged, who are trying to make a living.”Speaking on Channels Television Politics Today, on Sunday, the Borno State Governor, Babagana Zulum cautioned that the tax reform bills could have significant consequences on millions of Nigerians.He said, “If the president wants to use his power to pass the tax bill, he may have his way, but it has its consequences on the people.“There are a lot of misconceptions. At NEC, we advised the Federal Government to pause for a moment in order to have deeper consultations with stakeholders.“We felt that the VAT provision in the tax law, which clearly stated that VAT allocation should be based on derivation… the proposed bills further stated that 60 percent of the VAT will be shared based on derivation.“I’m not an economist but based on the calculations that we did, only Lagos and Rivers states will benefit from this scheme. We did our own research and concluded that we would lose.”He said the north needs more time to consult and fully understand the bills.Similarly, former Vice President Atiku Abubakar on Sunday, called for objectivity and transparency in the conduct of the public hearing on the Tax Reform Bills.