Prior to adjournment for the Easter, an Ad hoc committee of Nigeria’s House of Representatives with a specific mandate to investigate the leasing and concession of some federal government-owned properties sat and announced at its inaugural meeting that it will leave no stone unturned as it strives to deliver on its mandate. JOSHUA EGBODO writes on the expected outcomes
$5.7bn loss revealed
Apparently alarmed by the reported loss of about $5.7 billion to the nation’s economy due to “unfavorable and non-transparent agreements” since the federal government’s leasing and concession policy, a move targeted at revenue generation improvement, the committee said the task before it was enormous.
On Tuesday December 21, 2020, the House passed a resolution on a motion, on the “Need to investigate the governing leases of federal govemment—owned assets”, subsequently constituted the panel.
Speaking at the inaugural meeting of the committee penultimate week, its Chairman, Hon. Dan Asuquo said that in the aviation sector alone, the federal government is reportedly “losing over $90.5 million annually due to the shoddy agreements between the Federal Airports Authority of Nigeria (FAAN) and its concessionaire at both local and international wings of the Murtala Muhammed Airport (MMA) Lagos”.
He said a similar situation obtains in the maritime sector where the Nigerian government has concessioned 26 ports to private companies. “The tenures of the NPA concession agreements range from 15 to 25 years and the estimated revenue to government from the concessions is estimated at over $6.54 billion over the period. However, JV companies have allegedly only realized an estimated sum of $3 billion since 2005, out of the total sum.
“The story and picture of the scenario is the same in almost all federal government agencies where concession agreements were entered into with private companies”, he disclosed.
Good policy, but…
According to the lawmaker, paucity of funds may have compelled the federal government of Nigeria to contemplate selling off some of its assets as well as lease or concession others to enable it raise funds for budget implementation.
“This is a laudable policy. However, we are worried that the lease and concession of Federal Government assets may be compromised where there is no oversight. We are therefore convinced that there is an urgent need to review all lease and concession contracts on federal government assets, with a view to expunging all sales provision and enacting new ones in line with the current state of affairs to be determined by market forces”, Asuquo said.
He explained that the committee will adopt a work plan and strategies necessary to conduct an in-depth investigation into all leases and concessions of assets with a view to plugging leakages and enhancing government revenue generation for budget implementation, especially in the face of dwindling crude oil revenue over the years.
Original government’s intention
The committee leader offered some insight into what the federal government may have conceived, as stated that “For our own purpose, a lease may be viewed as a contract under which the Federal Government rents out its property to private companies for a specified period and in exchange for regular payments”, while “a concession, on its part, Is a contract that gives a company or concessionaire the exclusive right to develop and or operate an infrastructure facility within a government jurisdiction or on another firm’s property for a stated time and under specified conditions.
“In other words, a concession is a type of Private Public Partnership (PPP) where ultimate ownership of assets or infrastructure remains with the government while part of the commercial risks of providing and operating the assets or infrastructure ls transferred to a private concessionaire.
“The major advantage of a concession is that it allows certain public assets (for which private ownership is economically inefficient and politically not possible) to be maintained and operated efficiently by private players. The Federal Government of Nigeria has been using this PPP model to anchor its efforts to diversify the economy….”.
The lawmaker went further to cite categories of public infrastructure that benefited from PPP to include power generation plants, power transmission distribution network, roads and bridges, sea ports, airports, railways, inland container depots, logistics hubs amongst others.
Failed outcomes?
Despite the original good intentions of the government, it is seemingly to many, including the committee that the outcomes may have fallen short of the desired outcomes. “Beautiful as these (policies) may sound, it has been discovered overtime that the realization of the federal government’s objective may become a tall order if appropriate checks and balances are not put in place by way of oversight”, Asuquo reiterated the need for the parliament to step in.
Specific action targets
In the words of the chairman, he said going in tune with the terms of reference handed the panel, it will among other things; work towards ascertaining whether due process was followed in the concession agreements as well as ensure that subsequent concession agreements that will be entered into by the Federal Government follow due process.
Also, the committee explained that it will look at the market value when the agreements were made vis-a-vis the
present market value; and further track payments into the Concession Account to make sure that the Federal Government is not short-changed out of its entitlements under the agreements.
In its determination to find out if the concessionaires are fulfilling their own obligation in the concession agreements especially as it pertains to servicing and maintenance of assets; Asuquo said the panel will seek to examine the duration and status of lease/concession agreements with a view to noting the agreements that have elapsed and due for renewal, and as well, find out if the concessions were awarded to companies that have the technical, financial and managerial capacity to do so.
Assurance of fair hearing
Like many other probe panels of the House, Asuquo at the inaugural meeting of his committee said all stakeholders expected at the its investigative hearing will enjoy chances to offer their inputs in the spirit of the constitutional guaranteed rights to fair hearing. “Let me use this opportunity to inform stakeholders and the general public that this investigation is not intended to witch-hunt any firm or consortium. It is rather an opportunity to put the nation on the path of sustainable growth, development and economic recovery which posterity will be proud of”, he stated.
Will the probe yield the expected result?
The parliament is currently on break for the Easter, and will hopefully be back in action from April 13, 2021, with high expectations in the minds of many followers of the development that the Ad hoc panel may swing into the probe proper. The big question however has remained, whether the exercise will truly expose the much rumoured sleazes in the concessions, and or lease of federal government-owned property for the period under review. Only time will tell.
