Case Study Background

CHAPTER SIX: Case Study One: Analysis of Results

Introduction (6.1)

Case Study Background (6.2)

Nigeria’s Federal Government PPP Procurement Process (6.3)

Rationales for Stakeholder Management (6.4)

Stakeholder Management Steps (6.5)

Roles of Partners in Stakeholder Management (6.6)

Enablers of Stakeholder Management (6.7)

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A brief background of the case study, a major road project is presented in this section. The section is sub divided into three: project background; project partners; and the research participants.

6.2.1 Project Background and Information

The road transportation project is a 30-year Design, Construct, Finance and Operate and Transfer (DCFOT) PPP arrangement between a state government in Southern Nigeria and a special purpose vehicle (SPV). The project is a brownfield project that was conceived to ease travel in the state. To give the project a legal backing, the state government passed a law legalising the concession of roads and bridges and also established a PPP office to regulate and supervise PPP projects.

The project is a 6 lane (3 on each side) road with a total length of about 50km that cuts across different communities. The project was estimated at over 137 billion naira (US$450 million) and concession of the project started officially in November 2008 and will terminate in November 2038 (Office of Public-Private Partnership (OPPP), 2012). Construction commenced in 2008 with an initial 5 year completion plan. The first phase of the project was completed in 2011 and thereafter, tolling on the first phase of the road commenced in the December, 2011. Subsequently, the second toll plaza was opened in 2nd March 2012. However, due to public outcry, tolling on the second toll plaza was suspended and is free to motorist under a shadow toll arrangement in which the government pays the concessionaire based on the number of vehicles that use the road. Thus far, over 10km of the road has been completed and construction is on-going on the remaining length.

The road transportation project has been recognised as a viable project and won several international awards. However, the tolled road has experienced some challenges such as public opposition and litigation since it was opened. The main cause of public opposition was inadequate stakeholder engagement prior to the commencement of the project (Dada and Oyediran, 2016). To this end, the government set-up a stakeholder committee comprising public sector officials, the SPV and leaders of affected local communities to address issues raised by the local communities. The committee sat for some months and submitted its report to the state government. Consequently, public protests on the project have waned. However, after a few years, the concessionaire proposed to the government to increase the toll due to the devaluation of the currency (naira) and inflation which has impacted on the overall cost of the project. Devaluation of the currency was not envisaged during the early phase of the project. Against this backdrop, the government has announced its intention to buy back the concession after a series of negotiation with the concessionaire in order not to

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burden road users (Punch, 2013). This project consists of some partners and will be explained in the next section.

6.2.2 The Project Partners

There are two organisations that are involved in the concession agreement: the state government; and a special purpose vehicle (SPV). The state government has a Public Private Partnership office that represents it and responsible for PPP projects. The PPP office signed the concession agreement for the project on behalf of the state government. The SPV is made up of different partners: a company responsible for engineering, procurement and construction apart from toll equipment; a project management company; toll Infrastructure company responsible for the procurement and management of tolling equipment; and an ICT company responsible for the design, fabrication, delivery, installation and commissioning of all toll management IT systems and equipment.

6.2.3 The Research Participants

The research participants for the case study comprise of 4 public sector officials, 1 private sector official, and 5 leaders of local communities. Table 6-2 shows the background details of the participants. All research participants were and/or are part of the stakeholder engagement exercise for the project. All but four of the research participants were part of the stakeholders’ committee which was inaugurated by the state government after the protests. The backgrounds of the participants were carefully considered before their selection. The participants were involved in the project and stakeholder management activities, hence their views and opinions are reliable in providing useful insight into the PPP procurement phases and stakeholder management in the project. Also, the views of the participants provide valuable answers to the research questions.

Table 6-2 Background of research participants

Type of Stakeholder Stakeholder ID Stakeholder Position

Internal

Public sector official 1 Senior Officer Public sector official 2 Senior Engineer Public sector official 3 Senior Officer Public sector official 4 Senior Officer Private sector official Senior Officer External

Community Rep 1 Community chief

Community Rep 2 Chairman of a community association

Community Rep 3 Community leader

Community Rep 4 Community youth leader

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In addition to the interviews, several documents such as stakeholders’ committee report (2010), Environment and Impact Assessment (EIA) reports and PPP manual for the state were reviewed and analysed and the observation of the researcher also formed part of the data analysis for the case study. The chapter proceeds to present findings of the case study. Findings of the study are structured to reflect the state PPP procurement process and themes of the conceptual framework (Section 4.6). The themes are: rationale for stakeholder management; stakeholder management steps; roles of the project participants; and enablers of stakeholder management. Findings under these themes are presented and explained in subsequent sections of the chapter.