1. 9/18/2015 1 Legal Issues With Railway Public Private Partnerships In Nigeria CWC NIGERIA INFRASTRUCTURE CONFERENCE ABUJA, November 18, 2009 Ayuli Jemide, Lead Partner.

2. 9/18/2015 AYULI JEMIDE, Lead Partner,2 3 Major Issues 1.Relevant Legislations 2.Issues arising from the NRC Act 3.Key Railway Assets

3. 9/18/2015 AYULI JEMIDE, Lead Partner,3 Relevant Legislations 1.The Constitution 2.Nigerian Railway Corporation Act 1955 3.Infrastructure Concession Regulatory Commission Act 2005 4.Utilities Charges Commission Act, 1992 5.Railway Bill (Pending Legislation) 4. National Transport Commission Bill (Pending Legislation)

4. 9/18/2015 AYULI JEMIDE, Lead Partner,4 Constitution Exclusive List Federal Roads Maritime Aviation Mines & Minerals Railways ? Nuclear Energy Concurrent List Electric Power Industrial, Commercial & Agric Dev. Education Residual List Urban planning Transportation State Roads Water Housing Health

5. 9/18/2015 AYULI JEMIDE, Lead Partner,5 Nigerian Railway Corporation Act 1955 Does the NRC Act provide a proper framework for NRC to engage in a PPP with any private Sector proponent?

6. 9/18/2015 AYULI JEMIDE, Lead Partner,6 Nigerian Railway Corporation Act 1955 oVests all Railway Infrastructure in NRC from a “Vesting Day”

7. 9/18/2015 AYULI JEMIDE, Lead Partner,7 Nigerian Railway Corporation Act 1955 NRC has the following exclusive rights: 1.Right to Sell, Lease or Dispose of Property. i.e “operating leases” of railway assets. 2.Right to Enter into Maintenance or Repair Contracts. 3.To Enter into Agreements for any Service.

8. 9/18/2015 AYULI JEMIDE, Lead Partner,8 Nigerian Railway Corporation Act 1955 4.To Enter into Agreements for the Payment, Collection or Apportionment of Rates, Fares or Charges. 5.Right to Set Fares. 6.To Carry on Any Business necessary or desirable for its purposes.

9. 9/18/2015 AYULI JEMIDE, Lead Partner,9 Nigerian Railway Corporation Act 1955 NRC has a general rights to delegate its powers or duties under the NRC Act to “any person” subject to the approval of the Minister. S17NRC has a general rights to delegate its powers or duties under the NRC Act to “any person” subject to the approval of the Minister. S17

10. 9/18/2015 AYULI JEMIDE, Lead Partner,10 Nigerian Railway Corporation Act 1955 Is there a Framework for State or private persons to construct and operate a Railway in Nigeria?Is there a Framework for State or private persons to construct and operate a Railway in Nigeria?

11. 9/18/2015 AYULI JEMIDE, Lead Partner,11 Nigerian Railway Corporation Act 1955 S29 – “Construction of Railways by Persons other than the Corporation”S29 – “Construction of Railways by Persons other than the Corporation” “It shall be unlawful for any person without the consent of the Corporation to construct or operate a Railway for public carriage of passengers or goods within Nigeria”

12. 9/18/2015 AYULI JEMIDE, Lead Partner,12 This is currently the only window for States and private proponents to establish green-field railway infrastructure. NOTE: Railway Bill would expand this window considerably when passed into Law.

13. 9/18/2015 AYULI JEMIDE, Lead Partner,13 Some Issues With The Window 1.No framework for granting consent: -Tenure? -Fees? -Who owns Railway at end of tenure? – Lagos Light Rail project may set some precedents to go by in the months to come.

14. 9/18/2015 AYULI JEMIDE, Lead Partner,14 Some Issues With The Window 2.Does the NRC “consent” include the right to sub- delegate the railway operations? It has been suggested that: -NRC consent should contain a right to sub-delegate or -NRC should co-sign any Concession agreement between a State and subsequent Concessionaire?

15. 9/18/2015 AYULI JEMIDE, Lead Partner,15 Some Issues With The Window 3. What would be a PPP under the ICRC Act? a)NRC co-signs a subsequent Concession Agreement between the State entity/private entity and a subsequent concessionaire? b)NRC gives consent to a private person c)NRC gives consent to a State Government d) NRC engages the private sector to provide a service

16. 9/18/2015 AYULI JEMIDE, Lead Partner,16 Some Issues With The Window 4.Who should regulate? States or NRC? -Are the current NRC regulations adequate for an Urban Mass Transit Railway system in year 2009? -Does NRC have the manpower to regulate Urban Mass transit? -Should NRC pass separate regulations for Urban Mass Transit or for each State transaction?

17. 9/18/2015 AYULI JEMIDE, Lead Partner,17 Some Issues With The Window 4.Can the “Primary Enforcer” model work in Nigeria? Primary Enforcer means delegation of the right to enforce as distinct from the right to regulate o Note that Section 58 entitles the Minister to make Bye-Laws for regulation of railway operations

18. 9/18/2015 AYULI JEMIDE, Lead Partner,18 Some Issues With The Window 5. Would Lenders in their Security package not be very interested in entering into “Direct Agreements” with NRC rather than the State entity?

19. 9/18/2015 AYULI JEMIDE, Lead Partner,19 Railway Assets Asset structure of components of the railway assets determine deal mechanics: -Transaction structure -Financing -Tenure of Concession -Allocation of Risks -Insurance mechanics -Handover and Buy back mechanics

20. 9/18/2015 AYULI JEMIDE, Lead Partner,20 Railway Assets BOT - Assets owned by Concessionaire for a Concession period Management or Service Concession – Concessionaire owns no railway asset Lagos Light Rail Model - Govt owns the tracks & Stations, whilst concessionaire owns the rolling stock

21. 9/18/2015 AYULI JEMIDE, Lead Partner,21 Railway Assets 1.Tracks - Are they in place? -Who owns them? - Is there a need for rehab or expansion?

22. 9/18/2015 AYULI JEMIDE, Lead Partner,22 Railway Assets 2.Right of Way -Commercialisation opportunities can increase PPP viability - Some countries have used their Railway Right of as Tourism assets

23. 9/18/2015 AYULI JEMIDE, Lead Partner,23 Railway Assets 3.Stations - - Shall we treat them as real estate? -How can they be used as deal sweeteners?

24. 9/18/2015 AYULI JEMIDE, Lead Partner,24 Railway Assets 4.Rolling Stock – Is Concessionaire providing some or all? - If they exist what value is placed on them? - Serviceable condition? - Shall we provide for Buy back? - Whole life costing is essential

25. 9/18/2015 AYULI JEMIDE, Lead Partner,25 Railway Assets 5.Personnel – Existing at the time concession commences? - Engaged by Concessionaire? How are they transferred in both situations? At the beginning and at end of concession period? -What liabilities do they come with at each point. -Should they be a contractual obligation to train Nigerian personnel during the concession period?

26. 9/18/2015 AYULI JEMIDE, Lead Partner,26 Railway Assets 6.Operational Licences/Approvals – What needs to be obtained? -What is transferable at beginning and end of concession?

27. 9/18/2015 AYULI JEMIDE, Lead Partner,27 Railway Assets 7.Intellectual Property - Patents, Trademarks, etc Are they transferred? When? How? Are they transferred? When? How?

28. 9/18/2015 AYULI JEMIDE, Lead Partner,28 Conclusion Railway Concessions are not a one size fits all. Every transaction is tailor made!

29. 9/18/2015 AYULI JEMIDE, Lead Partner,29 THANK YOU FOR LISTENING!