Advised Kepco Energy Resources Ltd on the financing of its acquisition of Egbin Power PLC. Provided support to the commercial law development program of the United States Department of Commerce in workshops leading to the publication of the book titled. 30 days after execution where an instrument is liable to an ad valorem rate. The main stages are: Selection of projects in each sector to be implemented on a PPP basis by the relevant ministry, department and agency (MDA) charged with the responsibility of regulating that sector. There is no limit to the number of hours an employee can work in a day. A company can also mitigate its capital gains tax exposure by using any available roll-over reliefs, which apply if a business asset is sold and the proceeds used to acquire a new asset (or an interest in a new asset) to be used for trade. This can be done as currently there are no thin capitalisation rules in Nigeria and parties can take advantage of this. London Court of International Arbitration Rules. Withholding tax of 10% on any dividend paid (unless it has a tax exemption), although if the recipient of the dividend is located in a country with which Nigeria has a double tax treaty, the rate would be reduced to 7.5%. Time or Duration Based Fees CHAPTER FIVE: Adjustment of Fees 5.1. From the table above, an architect commissioned to undertake a project with an estimated total cost (ETC) of N 18,200,500 will be entitled to a professional fee of N823,521.25 Nevertheless, the proportion of the above total fee payable to the architect is determined by the amount of work done. The entitlement of consultants to recovery from third parties in respect of additional costs or delays depends on the terms of their contracts and appointments. Specific laws govern procurement of goods and services in Nigeria. Webprofessionals in the Built Industry to develop an harmonised scale of fees. Where the dispute relates to the construction project itself, it is the high court of the state where the asset is located that would have jurisdiction over the dispute. Controversy is sprouting again among building sector professionals on the scale of fees being charged in the industry. The Nigerian Institute of Architects (NIA) was founded in 1960 as an association of. Table of Professional Charges 4.5. Fee proposed 10% of cost of Annual Services. Webprofessionals in the Built Industry to develop an harmonised scale of fees. In January 2021, the FGN signed a Memorandum of Understanding with a Portuguese construction firm Mota-Engil for the construction of the cross-border Kano-Maradi rail line which has an estimated construction cost of USD1.96 billion. WebFee is to be negotiated subject to a minimum of N50,000=. Debt providers include Development Finance Institutions, multilateral agencies, commercial banks, Export Credit Agencies. Cost is a vital element in every development. Fixed and floating charges over all the project company's assets and receivables, bank accounts. Under Nigerian Law, certain professionals must have obtained the relevant licences to engage in construction projects: Engineers must be licensed by the Council for the Regulation of Engineering in Nigeria (COREN) under the Engineers (Registration, etc) Act) (, Quantity surveyors must be licensed by the Quantity Surveyors Registration Board of Nigeria under the Quantity Surveyors (Registration, etc.) Extensive rehabilitation of the Lagos-Ibadan expressway, one of the largest road networks in Africa, the oldest expressway and busiest inter-state route in Nigeria. The proposed project is submitted to the Federal Executive Council (FEC) for approval. Contracts for the KanoJibia and Port Harcourtaiduguri lines were confirmed by the Federal Executive Council. The PPA also requires procurement to be conducted in a manner that is: Equitable for ensuring accountability and conformity with its provisions (with the aim of achieving value for money and fitness of purpose). Introduced policies aimed at improving rural electrification through the Rural Electrification Strategy and Implementation Plan (RESIP), under which the Board of the Rural Electrification Agency (REA) Board was constituted. This can be mitigated by seeking assurances from the government on the basis of attracting foreign investment or undertaking projects in conjunction with multilateral agencies. The main tax issues which arise on projects include whether there will be value added tax, the applicable rate of stamp duty on the transaction document(s), and transfer taxes in relation to land or other property. The Factories Act also provides that where an offence is committed by a body corporate, every director, manager, secretary or other similar officer of the body corporate is guilty of that offence and liable as if they had committed that offence unless they prove that the act or omission constituting the offence took place without their consent, knowledge, connivance or neglect. However, these are still subject to performance risks. The principal feature of the EIA Act is that it specifically requires that any public or private sector project must not be undertaken or started without a determination of its environmental effects. Approval of project documents by lenders. The Lagos State government has also partnered with Nigerian Mortgage Refinancing Company (NMRC) and private developers to construct and deliver 20,000 housing units to the state in the near future. In the few cases where contracts involving Nigerian parties provide for institutional arbitration, the parties tend to choose local Nigerian arbitration institutions such as the Chartered Institute of Arbitrators (UK) Nigerian Branch or the Lagos Regional Centre for International Commercial Arbitration. Some engineering, procurement and construction contracts for local projects are also drafted on the basis of the template developed by the International Federation of Consulting Engineers (. Sponsors and project developers often incorporate those requirements into a contract as part of the employer's requirements of the contractor. The contractors also obtain limited time warranties, typically between 12 and 24 months, from the original equipment manufacturers, which they pass on to the project owner. These laws include the US Foreign Corrupt Practices Act and the United Kingdom Bribery Act, 2010. Lekki Deep Seaport project is also being developed as a PPP between the federal Government of Nigeria, the Lagos State Government and Tolaram Group. WebLowe (2003) further stated that the value added of construction is in the range of 7% to 10% for highly developed economies and around 3% to 6% for underdeveloped economies. 2.50% Balance Guidelines for the Development of Local Content in the Nigerian Electricity Supply Industry. The contractual provisions that govern or limit liability include provisions dealing with any of the following: Indemnities on account of losses caused by delay. Contracts can also include clear definitions of the standard of performance expected and penalties for not meeting the standard. Another right of the client is to take physical possession of and secure the site. ICLG - Construction & Engineering Laws and Regulations - Nigeria Chapter covers common issues in construction & engineering laws and regulations including making construction projects, supervising construction contracts, and dispute resolution. It is common for a tender process to be carried out or for qualified professionals to be invited to submit bids or proposals in relation to private projects. The flip side of this is that an estimated loss scheme (liquidated damages) is also built into the contract to subtly compel the contractor to deliver on time and on budget. Some Nigerian construction contracts permit the owner to request the contractor to alter the works and services (or any part of them) through change orders, change requests, and change notices. Failure to stamp an instrument will render it inadmissible as evidence in any civil proceedings before any Nigerian court. The preferred developer is selected through an open competitive bidding process in compliance with the PPA. Time or Duration Based Fees CHAPTER FIVE: Adjustment of Fees 5.1. In other cases, the overall cap does not exceed the amount of the contract price. In the power sector, the caps in engineering, procurement and construction contracts range between 10% and 15%. Percentage Fee Scales 4.4. In February 2021, at commissioning of a 1.12 MW Captive Solar Hybrid Power Plant at the Abubakar Tafawa Balewa University, Bauchi which was executed under the Energizing Education Programme (EEP), the FGN stated that Nigeria intends to have 30% of its electricity supply from renewables by the year 2030. Where the assets to be used in a construction project are liable to VAT, the purchaser must pay VAT on the consideration payable for such assets at the rate of 7.5%. Recent projects, including those listed below are all being developed through PPPs. However, by law, parties are unable to cap liability arising from death and personal injury. WebConstruction projects are generally not exempt from VAT, and are liable to VAT at 7.5%. A change will enhance efficiency of the project's operations. The Labour Act provides that normal work hours are to be fixed by mutual agreement, collective bargaining, or by an industrial wages board. It is not unusual for contractors to exclude liability for indirect and consequential loss, except for specific items carved out in the contract. Draft EIA to be carried out and a report submitted to the DRP at the end of the project conceptual design and will form the basis for approval by the DPR of the detailed engineering design. Controversy is sprouting again among building sector professionals on the scale of fees being charged in the industry. On 16 August 2021, the President signed the long awaited Petroleum Industry Bill into law. The Lagos-Ibadan Standard Gauge rail began commercial operations in 2021. f) PSGS 6: Letting/Real Estate Brokerage/Agency. Generally, a Nigerian national does not require any authorisations to work in Nigeria. The EIA must be approved by the Department of Petroleum Resources (DPR). There are 3 stages of payment. This Scale was used for the next 14 years until 1992 when it was revised. The FGN is taking steps towards reducing the infrastructure deficit through increased spending as part of a 30-year infrastructure plan (National Integrated Infrastructure Master Plan) (Infrastructure Plan) with a target date of 2043, which aims to bring Nigeria's infrastructure stock to the GDP level recommended by the World Bank. Nigeria LNG Train 7 project is an ongoing expansion of the Nigeria LNG Terminal at Bonny Island, Nigeria. However, in international projects, the project company is usually wholly owned by the sponsors through a holding company incorporated in a tax-friendly jurisdiction. On the basis of the President's directive that every seaport should have complementary rail infrastructure, we expect to see more developments in this sector in other states in the medium to long term. The scope of such caps is usually fixed by commercial terms with the relevant acceptable exclusions, which may be extended beyond the norm, based primarily on the risk allocation mechanism of the project. In addition to local Nigerian laws, some foreign anti-corruption and anti-bribery laws have extra-territorial effect and may apply to certain categories of persons in relation to actions that are connected with Nigeria. There are other non-compulsory insurance products, such as erection all risk insurance, that a contractor or project company will typically procure. Most construction contracts contain step-in right provisions that impose an obligation on the contractor to assign the subcontract to the employer in certain circumstances, for example, if the main contract is terminated. The PPA contains detailed provisions in respect of the procurement process, including the principles, planning, implementation and general conduct of public procurement. Where the project involves the provision of utilities, the project company will usually prefer to impose absolute obligations on the contractor (to the effect that the completed project must be fit for a particular purpose and remain fit for a specified period). Legal or equitable mortgage on all of the project company's interest in the project site, land and buildings and fixed plant and machinery. During 2020 and 2021, parties have increasingly sought to declare force majeure events caused by COVID-19. For projects in the public sector, parties are mandatorily required to comply with procurement rules and regulations. A change in applicable laws and standards necessitates such change. The Pension Reform Act 2014 imposes an obligation on employers to obtain life insurance cover for all their employees. 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