Introduction: From Infrastructure Deficit to Sustainable Infrastructure Governance (A case of Benin-Asaba highway project)
By Olanrewaju O. Ogunmilua (PhD)
Nigeria’s infrastructure deficit has made Public-Private Partnerships (PPPs) and concession arrangements increasingly important instruments for mobilising private capital, expertise and operational capacity for public infrastructure. Roads, ports, airports, railways, power infrastructure, healthcare facilities, housing, water systems and other public assets can benefit from private-sector participation where government alone may not have sufficient fiscal space or technical capacity. The scale of the requirement is not seriously in dispute. The Infrastructure Concession Regulatory Commission (ICRC) has put the national infrastructure deficit at approximately $2.3 trillion, with yearly investment requirements in the region of $100 billion, and no realistic reading of the federal appropriation cycle suggests that budgetary provision alone will close a gap of that magnitude within a generation.
The central question, however, should not simply be how government can attract private investment. It should be how government can ensure that private participation produces value for money, transparency, competition, affordability, service quality and long-term public value. Consequently, this brings concessioning directly into the debate on Nigeria’s public procurement reform.
Nigeria established the Infrastructure Concession Regulatory Commission (ICRC) under the Infrastructure
Concession Regulatory Commission (Establishment, etc.) Act 2005 to provide the institutional framework for Federal Government PPPs and concessions, with the Commission itself becoming operational in 2008. Its mandate includes taking custody of concession agreements and monitoring compliance with their terms, ensuring their efficient execution and supporting the complex PPP process. Section 4 of that Act further provides for award through competitive public bidding. At the same time, the Bureau of Public Procurement (BPP), established under the Public Procurement Act 2007, occupies the central regulatory position within Nigeria’s public procurement system, and it is the BPP that issues the Certificate of ‘No Objection’ evidencing that a bidding process was open, transparent and compliant with prescribed rules and guidelines.
The challenge is therefore not to ask whether BPP or ICRC should administer concessions. The more constructive question is: How can Nigeria clearly integrate procurement governance and PPP/concession expertise so that the two institutions reinforce rather than duplicate each other? The United Kingdom provides an important comparative lesson. Under the UK’s Procurement Act 2023, which received Royal Assent in October 2023 and took effect on 24 February 2025, concessions are now brought within the general public procurement framework, replacing the standalone Concession Contracts Regulations 2016 that preceded it. The UK model therefore demonstrates how concession-specific rules can coexist within a single procurement architecture, and Nigeria can learn from this experience without abandoning its own specialised PPP institution.
Public-Private Partnerships and infrastructure concessions were introduced into Nigeria’s infrastructure development strategy with a compelling proposition: government does not have to finance every infrastructure project from the public purse. Instead, private capital, technical expertise and commercial discipline can be mobilised to develop and operate public infrastructure while government retains strategic ownership and oversight. This is particularly attractive in an economy where competing demands for public expenditure include healthcare, education, security, agriculture, social protection and climate-resilient infrastructure. But there is an important question that Nigeria must now confront: When a concession fails, who ultimately pays?
The recent crisis on the 125-kilometre Benin–Asaba Highway provides a timely case study, and the answer it has produced is an uncomfortable one. The corridor was concessioned for 25 years on a Design, Finance, Build, Operate and Transfer (DFBOT) basis under the Highway Development and Management Initiative (HDMI), on the express understanding that it would be financed by the private sector and kept off the Federal Government’s balance sheet. Yet in September 2026 the Federal Government found itself ordering emergency works on that same corridor, at its own cost. The episode raises a fundamental procurement-reform issue: a concession may remove immediate expenditure from the government budget, but it does not necessarily remove the financial risk from taxpayers, which is precisely why the collaboration between the BPP and the ICRC matters.
2. The Benin–Asaba Case: What Went Wrong?
The sequence of events is worth setting out carefully, because the governance lesson lies in the sequence rather than in any single incident. According to the Federal Ministry of Works, the Federal Executive Council approved the concession of the Benin–Asaba Highway to the Benin–Asaba Expressway Concession Company Limited (BAECC), the special purpose vehicle of the Africa Plus Partners (Nigeria) Limited Consortium on 16 January 2023, on a DFBOT basis for a concession period of 25 years inclusive of a three-year construction period. The ICRC announced the approval of nine HDMI corridors, Benin–Asaba among them, on 19 January 2023. The Concession Agreement was executed on 23 May 2023. By late 2023, however, macroeconomic volatility, inflationary pressures and rising financing costs had necessitated an Addendum to the Concession Agreement, following which a comprehensive review was undertaken by the Ministry in collaboration with the ICRC, the Federal Ministry of Finance, the Federal Ministry of Justice, the Debt Management Office, the Bureau of Public Enterprises and the Federal Ministry of
Environment. The corridor was formally handed over to the concessionaire on 23 March 2025, with a Commencement Order issued thereafter and a completion period publicly put at 30 months. Worthy of note is that the construction clock did not start at approval; it started more than two years later.
The financial picture is less clear than it ought to be, and that lack of clarity is itself part of the problem. At the point of approval, the ICRC projected concession-period revenue of approximately ₦1.589 trillion over the 25 years for this single corridor. The capital value of the transaction, by contrast, has been described inconsistently in the public domain: civil society organisations reviewing HDMI records have pointed to a preliminary bulletin estimate in the region of ₦65 billion for a 100-kilometre scope alongside later public descriptions of a ₦228 billion transaction over 125 kilometres. That, in a transaction of this size and duration, is not a minor administrative gap: a concession whose value cannot be stated with confidence cannot be appraised for value for money, either at award or at termination.
This is perhaps the most important lesson from the Benin–Asaba experience. When a project is concessioned, government may legitimately state that it is seeking to reduce reliance on annual budgetary allocations. Indeed, the Highway Development and Management Initiative was created precisely to attract sustainable private-sector investment and reduce dependence on government budgetary expenditure for federal highway development. That is economically sensible. But public-sector accounting should distinguish between direct budgetary expenditure and total fiscal and economic exposure, because the absence of direct government funding does not automatically mean the absence of taxpayer exposure.
Events from August 2026 bore this out. Following an inspection of the corridor on 25 August 2026 with the Governor of Edo State, the Minister of Works, Senator David Umahi, publicly faulted the concessionaire’s conduct and capacity, referring to warnings previously issued by the project’s Independent Engineer. The allegations reported by the Ministry included the scarification of stable asphalt surfaces without prompt reconstruction, the engagement of personnel considered unqualified, slow progress, substandard work and traffic management that had produced severe gridlock along the route. On 7 September 2026, the Federal Controller of Works in Edo State stated at a press briefing in Benin City that the Ministry was considering measures to terminate the concession, citing alleged breaches of several provisions of the agreement. It should be recorded, in fairness, that these are allegations by one party to a contract in dispute; the concessionaire’s representatives, for their part, publicly asked for further time and engagement, and the matter had not been adjudicated at the time of writing.
What followed on 9 September 2026 is the part that ought to concern procurement professionals most. The Ministry announced immediate emergency intervention on the affected sections, stating that the situation had reached a point where overall public interest had to take precedence over the existing concession arrangement. The reason the intervention had to be announced in those terms is instructive: under the concession agreement, the Federal Government required the concessionaire’s consent before it could intervene on the road, and that consent was withheld. The Ministry therefore directed the deployment of major contractors to all three sections of the corridor with the cost of the emergency works borne by the Federal Government, and ordered a redesign of the route for reconstruction in reinforced concrete pavement. The Minister himself has since remarked publicly that the terms of the agreement left the government disadvantaged. In other words, the Federal Government paid to repair a road it had concessioned in order not to pay for it, and had to override a contractual consent requirement to do so.
3. Concession Failure Is Also a Procurement Failure
It would be too simplistic to describe the Benin–Asaba episode solely as a contractor failure. If the concessionaire genuinely lacked the technical, financial or managerial capacity to perform the contract, an equally important question arises: how was the concessionaire assessed before contract award, and how much consultation took place with the BPP at inception? This takes the debate directly back to procurement. Prequalification and evaluation should establish technical competence; financial capacity; relevant infrastructure experience; availability of qualified personnel; project-management capability; financing arrangements; previous performance; litigation and default history; consortium capability; equipment capacity; capacity to mobilise within the required timeframe; and environmental impact assessment together with compensation arrangements for affected communities. A company can be legally incorporated and financially attractive on paper without necessarily possessing the capability to execute a complex highway project. The Minister’s recent call for concessionaire competence to be properly established before contracts are awarded therefore points to an important procurement reform issue, and it indicates clearly where the BPP ought to have been brought in.
There is a second, quieter lesson in the sequence. The agreement was renegotiated by Addendum within months of execution because macroeconomic conditions had shifted, and the site was not handed over until nearly two years after signature. Contract-management capacity, not merely award integrity, determines whether a 25-year arrangement survives its first shock. This is not to say that renegotiation is always a failure; long-tenor infrastructure contracts must be able to absorb genuine changes in circumstance. It is to say that the capacity to appraise, price and document those changes is a procurement competence, and it must sit somewhere in government by design rather than by improvisation.
4. What the United Kingdom Has Done Differently
The UK’s reform provides an important lesson in institutional integration. The Procurement Act 2023 repealed the Concession Contracts Regulations 2016 and brought concessions above the applicable threshold within the same procurement framework as other public contracts, while retaining concession-specific provisions and flexibilities. Concessions are treated as ‘special regime’ contracts: they are covered procurements, subject to the Act’s processes and procedures, but certain obligations that make little sense in a concession context are carved out, among which are the requirement to set and publish key performance indicators and the provisions on payment terms and payment reporting. The design principle is worth stating plainly, because it is the principle Nigeria needs rather than the drafting. Concessions can involve high-value infrastructure and essential public services, and should therefore, as a general rule, be exposed to competition in order to secure best value for money. The UK accordingly treats concessioning not merely as a financing mechanism but also as a public procurement and public-value exercise.
There is a lesson here for Nigeria. A concession may involve billions of naira of private capital, but the underlying asset remains connected to a public purpose. Therefore: private financing should not mean reduced public procurement governance. Indeed, the opposite should be true. The longer the concession and the greater the public asset involved, the stronger the need for transparent procurement, professional contract management and effective public oversight.
One of the most valuable lessons for Nigeria concerns the valuation of concession contracts. Under section 4 of, and Schedule 3 to, the UK Procurement Act 2023, the general valuation rules do not apply to concessions; instead, the contracting authority must estimate the value of a concession as the maximum amount the supplier could expect to receive as a result of the contract. That estimate must take in the total revenue likely to be received, including income receivable from the contracting authority and from exploitation of the works or services charges levied on users, for instance and it is revenue rather than profit, so it is not reduced by the supplier’s expected costs. Other forms of remuneration, among which are premiums, fees, commissions and the receipt or sale of assets, must also be brought into the valuation. This is extremely important. Suppose government awards a 25-year road concession and the private operator expects to collect substantial toll revenue over that period: the economic value of the transaction cannot be assessed merely by saying, “government is not spending public money.” Government may have transferred a valuable public revenue stream or asset-use right to the private operator. Placed beside the ICRC’s own projection of approximately ₦1.589 trillion in concession-period revenue on Benin–Asaba, the point ceases to be theoretical.
Consequently, Nigeria should develop a comprehensive concession valuation methodology covering expected user revenues; government payments; subsidies; guarantees; tax concessions; availability payments; minimum-revenue guarantees; asset transfers; renewal and extension options; ancillary commercial revenues; land or development rights; and termination compensation, among others. The full economic value of the concession should be established before approval and procurement, and it should be disclosed in a form that survives ministerial changes and press cycles alike. This should become an essential component of the Nigerian business-case process.
5. The Nigerian Institutional Gap: The Interface Between BPP and ICRC
The most important reform issue is not necessarily the existence of two institutions. It is the possibility of overlapping or insufficiently defined mandates. The ICRC itself recognises that its PPP procurement process interfaces with BPP procedures, stating that while section 4 of the ICRC Act outlines the bidding process for PPP procurement, the Commission applies BPP-set procedures for bid submission, bid opening and bid evaluation. That is an interface established by practice and guidance rather than by a single, jointly issued and publicly available instrument, which is exactly the sort of arrangement that performs adequately in ordinary conditions and poorly in contested ones. This creates a compelling case for a formal BPP–ICRC Concession Procurement Protocol, setting out, inter alia, who certifies prequalification criteria for concessions, at what point the Certificate of ‘No Objection’ is issued in a PPP transaction, how a Full Business Case interacts with procurement records, and which institution leads on post-award performance review.
Institutional design, however, only carries a system so far; people execute it. The government’s concessionmanagement team should include professionally qualified procurement officers, alongside lawyers, engineers, accountants, economists, financiers and PPP specialists. This is where the professionalisation of the Procurement Cadre becomes strategically important. Procurement should not end when the concession agreement is signed. Procurement professionals must remain part of the contract-management ecosystem throughout the life of the concession through renegotiation, through variation, through performance disputes and, where it comes to it, through termination.
6. Nigeria Should Adapt the UK Model, Not Copy It
The United Kingdom’s experience demonstrates the benefits of integrating concession procurement into a broader procurement architecture. But Nigeria has a different institutional environment, a different fiscal position and a different market of prospective concessionaires. The appropriate Nigerian solution is therefore not to abolish the ICRC or simply reproduce the UK Procurement Act. Instead, Nigeria should combine UK-style procurement integration with the specialised PPP architecture the ICRC already provides, anchor that combination in the BPP’s procurement regulatory authority, staff it with professional procurement capacity, and bind the whole to strong lifecycle contract management. Taken together, these produce a more mature Nigerian concession system, and they do so by strengthening what already exists rather than by starting again.
7. Conclusion
From the foregoing, it is evident that concessioning should not be viewed simply as a mechanism for government to obtain private money for infrastructure. It is a mechanism for government to combine public assets, private capital, technical expertise and commercial discipline in pursuit of public value. That makes governance critical. Nigeria already possesses two important institutions: the BPP for public procurement governance and the ICRC for PPP and concession expertise. The reform opportunity is to define their relationship more clearly. The UK experience demonstrates that concessions can be brought within a common procurement framework while retaining concessionspecific rules and flexibility, and Nigeria can draw from that lesson while retaining its own institutional strengths.
The ultimate objective should not be merely to increase the number of PPPs or concessions awarded. It should be to ensure that every concession delivers a demonstrable value-for-money proposition for the Nigerian people. If Nigeria can institutionalise these principles through a strengthened Public Procurement Act, a modernised ICRC Act and a unified BPP–ICRC concession governance framework, concessioning can become more than a response to infrastructure financing constraints. It can
