NIQS seeks private sector-led infrastructure financing
As a measure to close the nation’s infrastructure gap estimated to cost about N3trillion yearly, quantity surveyors have advocated the adoption of private sector led project financing in the construction industry.
In Nigeria, project finance is still very much in its infancy and despite pressing challenges; positive trends are beginning to emerge. With Nigerian commercial banks being majorly short term lenders and not suitable for long-term investment projects, the private sector is expected to become increasingly involved in the creation of financing solutions to develop Nigeria’s declining infrastructure.
The President, Nigerian Institute of Quantity Surveyors (NIQS), Mrs. Mercy Iyortyer who spoke at the two-day national workshop organised in Lagos by the body, themed: “ Finance and Development of Capital Projects- Emerging Solutions”, said the option has become necessary following the high demand of construction and the dwindling fund occasioned by the fall in oil prices and other macro economic factors.
She stressed that infrastructure deficit would be recorded in Nigeria’s history as one of its most urgent concerns and her ability to deal with this challenges will no doubt define her future economic trajectory.
According to her, Nigerian government at all levels have traditionally financed the construction of infrastructure projects such a roads, bridges, power plants, airports, railways, ports and the like from their fiscal budgets with little or no support from the private sector, however this approach of project financing, she said, is unsustainable considering the present economic pressures on the fiscal budget.
“It is therefore imperative to turn to Project Finance Options as a way to develop Nigeria’s Infrastructure projects”, she noted.
Mrs. Iyortyer also stressed the need for professionals to consider emerging solutions to these challenges and to benchmark other countries such as China and Dubai, who have had success stories in this area.
She said: “ Progressively, project finance is being recognized as the best method of developing capital projects in Nigeria despite the associated risks and challenges of volatile economic activities.
Quantity surveyors, she said already have an understanding of the measurement of cost and value with the necessary combination of financial analytical skills and market knowledge. However, in order to take steps towards acquiring expertise in capital project finance and development, such set of core skills and competencies have to be broadened significantly.
No matter the high cost of providing these services, potential investors are normally willing to engage specialists to provide this service gap for achieving their investment portfolio.
She also extolled the Lagos state governor for blazing the trail by engaging about 350 professionals to extend the dragnet of monitoring illegal development since incidence of building collapses is becoming common in Lagos through the State Building Control Agency (LASBCA).
This process is to flush out quacks from construction sites considering the damaging roles they play in the incidences of collapsed buildings.
In his remarks, Lagos State Governor, Akinwunmi Ambode, represented by Akin Francisco, an architect stressed the urgent need for professionals in the built environment to proffer solutions to the financial needs for capital projects.
In his first lecture on “Alternative Methods of Infrastructure Deliver: The Quantity Surveyor Perspective”, the Chief Quantity Surveyor, Strategic Business Development, Julius Berger Nigerian Plc, Mr. Adewumi Akinpelu, said the Public Private Partnership model is an agreement for the delivery of the public good and must be viewed as an economic decision rather than political decision.