Boston, MA -- (ReleaseWire) -- 04/30/2013 -- Investment continues to flow into the Nigerian construction sector. This is reflected in the recently announced 6.5% GDP growth over 2012, a political agenda of economic reforms, and the continued unbundling and privatisation of the state-run Power Holding Company of Nigeria (PHCN). Thus, in line with our forecasts, Nigeria continues to see strong growth within its construction sector and we anticipate an annual average real growth of 7.0% between 2013 and 2017. However, we also continue to highlight the persistent risks hampering the implementation of major projects, ranging from deep-rooted corruption, violence perpetrated by militant Islamists and retaliatory forces, and a vast yet still inefficient bureaucracy.
Key developments include:
- Roads & Bridges: Nigerian infrastructure development company Bi-Courtney HighwayServices (BCHS) has begun its redevelopment of the Lagos-Ibadan Expressway. The US$559mn project involves the reconstruction of both existing carriageways, as well as the addition of two carriageways in each direction between the Lagos-Sagamu interchange. BCHS has been awarded a 25-year concession contract to manage the expressway, which links Lagos with Nigeria's western states.
- Airports: Nigeria's Minister of Aviation has announced the plan to construct a new international airport in Abuja. The planned airport would thus join a fleet of already ongoing projects within the airport transport subsector: we already note the US$683mn construction of five new terminals at five different airports across the country awarded to China Civil Engineering Construction Corporation, as well as the redevelopment of five existing terminals, approved by the government in February 2011.
- Ports: Intels Nigeria was awarded a contract by the Nigerian government for Phase 4 of the Onne Port Complex at Port Harcourt in Rivers State. The US$370.5mn project includes land reclamation, the widening of the channel entry, the construction of three new berths and the Federal Ocean Terminal, and the enhancement of existing facilities at the port. Intels, which has already completed the first three phases of the project, will undertake the work in order to allow the port to handle an increase in gas and oil shipments.
- Energy & Utilities: Attempts to unbundle and privatise power utilities previously owned by the state's Power Holding Company of Nigeria (PHCN) have started to bear fruit. Nigeria's state-run power utility has been split into six generation and 11 distribution companies, and in September 2012 Nigeria announced the winning bids for five state-owned electricity plants. The preferred bidders now have six months to make full payment before the plants are handed over. Disposal of the remaining generation company Afam has been delayed after some controversy. Preferred bidders for the 11 distribution companies were announced in October 2012.
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