Only $2.21 million has, so far, been spent on the Second Niger Bridge, contrary to rumour doing the rounds that the $700 million meant for its construction has been spent.

This was disclosed by the Managing Director and CEO of the Nigeria Sovereign Investment Authority (NSIA), Mr Uche Orji, in Lagos, on Thursday, while briefing the media on the update on the bridge in Lagos.

According to Uche, “to date, NSIA has spent a total of $2.21million on consultancy services on the two phases of the Project –$247,586 on the due diligence phase; and $1.96 million on the project development phase.
“These services have included work in the following areas: legal, financial, technical and engineering and environmental and social impact advisory, provided by various credible and well-recognised Nigerian and international professional services firms.”

He said the agency, acting through its wholly-owned subsidiary, NSIA Motorways Investment Company (NMIC), is collaborating with the Federal Ministry of Works and Julius Berger Investments (JBI) as joint sponsors on the financing, development and construction of the project.

“The bridge, estimated to gulp $700 million by 2012 estimates, is billed for completion in 48 months,” he said.
The 11.9km length bridge, the NSIA boss explained, was structured as a public-private partnership (PPP) and would be constructed and operated on a design, build, finance, operate and transfer (DBFOT) basis.

Uche said the total consultancy services cost so far is less than one per cent of the estimated project cost.
“Whilst there is no standardised benchmark for transaction costs, the European Investment Bank (EIB) 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 per cent of the capital value of the relevant project in Ireland, the Netherlands, Portugal and the United Kingdom.

“This EIB survey estimate does not include costs related to contract monitoring and renegotiation in the operational phase of the relevant projects,” he explained.

Uche expressed concern that the NSIA had yet to receive any additional funding from the initial $1 billion it received from inception, but nonetheless struck a positive cord that it had in its possession about $550 million it was managing for government agencies, including the Debt Management Office (DMO).