Second Niger Bridge to cost more

In from Ali Smart ….
The budgeted amount for the completion of the Second Niger Bridge is expected to increase, Ripples has learnt.
Confirming this development on Wednesday, the Nigeria Sovereign Investment Authority (NSIA) warned that the cost of completing the bridge will increase from the initial US$700 million or (N117.9 billion).
Although the NSIA was not specific on what the final cost of completing the bridge will be, it however said “the final project cost would naturally be affected by exchange rate fluctuations and other variables.”
According to the NSIA, “the project was initially estimated to cost N108billion excluding duties and VAT, (if duties and VAT are included, the project cost is N117.9billion). This was equivalent to US$700million at the then prevailing exchange rate of N154/$. The final project cost would naturally be affected by exchange rate fluctuations and other variables.”
To date, NSIA said it has spent a total of US$2.21million on consultancy services on the two phases of the Project – “US$247,586 on the due diligence phase; and US$1.96million on the project development phase.”
These services, it said, include work in the following areas: “Legal, Financial, Technical & Engineering and Environmental & Social Impact Advisory, provided by various credible and well-recognised Nigerian and international professional services firms.”
The NSIA said the total consultancy services cost so far is less than one percent of the estimated project cost, stressing that “whilst there is no standardized benchmark for transaction costs, the European Investment Bank’s Economic and Financial Report No. 3 of 2005, indicates that, on the average, the level of transaction cost for the procurement phase of PPP projects is over 10 percent of the capital value of the relevant project in Ireland, the Netherlands, Portugal, and the United Kingdom.”
This EIB survey estimate the NSIA said “does not include costs related to contract monitoring and renegotiation in the operational phase of the relevant projects.”

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NSIA said its technical consultants on the Second Niger Bridge “have been instrumental in value-engineering the project and reducing the initial project cost to the current level.”
It is expected that the Second Niger Bridge would be constructed and delivered in 48 months. When completed, the 11.9km bridge and adjacent roads will have six (6) lanes with teach direction.
It would be recalled that under former President Goodluck Jonathan, the government made a N30billion commitment to the project.

Meanwhile, construction work on the Second Niger Bridge may be further delayed as the Federal Government has said it is currently reviewing the contract sum for the project to justify the cost.

The Director-General, Infrastructure Concession Regulatory Commission, Mr. Aminu Diko, in an interview with State House correspondents on Wednesday, after briefing President Muhammadu Buhari in the Presidential Villa, Abuja, said the ICRC was currently withholding the certificate of compliance for the project.

He said the certificate was being withheld because of many issues regarding the project, adding that the commission was engaging the Ministry of Works on how to resolve the issues.

Specifically, he said the ICRC had asked the ministry to review the cost of the project with a view to justifying it.

He also identified the clamour for compensation by owners of the land where the project is being sited as one of the pending issues.

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