Paul Idornigie SAN C.Arb

…Legal Resource Center

Deregulation of Infrastructure

Deregulation of Infrastructure

In the past, it was thought that it was the sole responsibility of governments world-wide to provide infrastructure. Many reasons accounted for these. Essentially it was thought that the capital outlay for the provision of infrastructure was high for the private sector to bear and that public utilities (infrastructure) were public goods. Today, we are witnessing a world-wide revolution in the provision of infrastructure. This is essentially because of the paradigm shift – movement from the provision of infrastructure by government to the private and the governments only creating an effective regulatory.

Professor Idornigie was Head of Council Secretariat (Company Secretary) and General Counsel, Bureau of Public Enterprises, Abuja, Nigeria from August 2004 to February 2009 and attended all the meetings of the National Council on Privatization (NCP) from 2003 to February 2009. He was involved in the drafting of the Electric Power Sector Reform Act 2005 and incorporation of Power Holding Company of Nigeria Plc (PHCN) and the initial 18 successor companies that are being privatized. He was also involved in the drafting and negotiation of the lease agreements (concession) of the over 24 ports terminals in Lagos, Warri, Calabar and Port Harcourt.

His involvement in privatization in Nigeria cuts across all sectors of the economy – oil and gas, steel and aluminium, extractive industries, telecommunications, oil service companies, insurance, transport, paper mills, sugar companies, hotels, solid minerals, cement, motor vehicles and truck assembly plants. Indeed, he was involved in the drafting of the Reform Bills (The Federal Competition and Consumer Protection Bill, Ports & Harbours Bill, Petroleum Industry Bill, Nigerian Railway Corporation Bill, National Postal Sector Reform Bill, National Transport Commission Bill, Roads Sector Reform Bill and Inland Waterways Bill). These Bills were drafted between 2003 and 2006 and as at August 2012 they are yet to be passed into law.
Cited in Mody A (ed) Infrastructure Delivery: Private Initiative and the Public Good, Economic Development Institute Studies of The World Bank, The World Bank, Washington, D.C., 1996 p xiii. environment. In other words, movement from government as a provider to government as a regulator.

Infrastructure services are critical inputs in the provisions of goods and services and significantly affect the Productivity, cost and competitiveness of the economy. Policy decisions regarding their provision and sector development have ramifications throughout the economy . Indeed the boundaries between the public and private sectors are the most important political issues of our time.

There is hardly a discussion today on the provision of infrastructure without reference to de-regulation or their provision by the private sector. It is safe to assert that the primary responsibility to provide infrastructure rests on the public sector and that more than 70% of the responsibility still rests on the public sector. Consequently, the public entities must continue to make budgetary allocation for the provision of infrastructure.

Privatization in its broader sense has been used to reform and de-regulate the economy either solely or in combination with other instruments. However, the reform initiative undertaken by the Federal Government of Nigeria will be incomplete without institutional changes in terms of passing the reform bills that have been drafted by the National Council on Privatization/Bureau of Public Enterprises since 2003 . The Federal Government must learn how to retreat from the provision of infrastructure and strengthen regulatory institutions. The thrust of this chapter, therefore, is the de-regulation of infrastructure.

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