One of the functions of the Bureau of Public Procurement is to prepare and update standard bidding and contract documents. There are 3 stages of payment. There is also no compulsory levy to fund local infrastructure. Key member of the team that advised Stanbic IBTC Bank PLC, as Lender's counsel, with respect to an USD11.3 million medium term loan facility advanced for the refinancing of a residential real estate development in Durunmi, Abuja. Harmful Waste (Special Criminal Provisions, etc.) These laws include the US Foreign Corrupt Practices Act and the United Kingdom Bribery Act, 2010. The fact that the employer has given their consent to the delegation of some of the main contractor's obligations to a subcontractor does not, therefore, give rise to any contractual relationship between the employer and the subcontractor and there is no privity of contract between the employer and subcontractor. An EIA must be undertaken where the extent, nature or location of a proposed project or activity is likely to have a significant effect on the environment. Equity funding can be provided by project sponsors, private equity funds, impact investors and individuals. Professional fees in building projects Structural engineering fees Rp200,000 to Rp 300,000 per square metre MEP (mechanical, electrical and plumbing) design fees Rp120,000 per square metre Quantity Surveyors fees Rp60,000 per square metre This was submitted by the Association of Consulting Engineers in Nigeria and the Nigerian Society of Engineers to the Council for the Regulation of Engineering in 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. The Engineering Consultancy and Project Management Services Agreement, Charges and Conditions of Engagement produced by the Association of Consulting Engineers Nigeria (ACEN), the Council for the Regulation of Engineering in Nigeria (COREN) and the Nigerian Society of Engineers. N60m (estimated project cost) multiplied by a minimum of 7.5% (scale of fees for new projects). Where an instrument is executed outside Nigeria, stamp duty must be paid within 30 days from the date on which the instrument is first brought into Nigeria. In some cases, a project company may procure a single project insurance package and by virtue of the project agreements, share the benefit of the insurance cover with different project service providers. There are other non-compulsory insurance products, such as erection all risk insurance, that a contractor or project company will typically procure. Typically, they are based on the FIDIC Silver Book. However, the application of these fee scales is usually not mandatory and parties can instead agree that a lump sum will be paid in instalments at agreed milestones or generally agree on a satisfactory fee payment structure. Parties are free to determine the scope, nature and term of their contracts to the extent that the terms of those contracts do not breach the laws of Nigeria. Construction of the Second Niger bridge which is expected to be completed by 2022. Professional bodies are formed as an association of professionals which enhance, control, and regulate the activities of its members. Other sanctions imposed under the EFCC Act include the forfeiture of assets (both within and outside Nigeria) and the freezing of bank accounts maintained by a person accused of the commission of a financial crime. In addition, the NMWA does not apply to establishments that employ less than 25 persons, or in which people are employed on a part-time or piece-rate basis. Advance Fee Fraud and Other Related Offences Act 2006. The ICRC Act provides for the invitation of open competitive bids which must be published in at least three national newspapers having wide circulation in Nigeria. If passed, the proposed legislation will establish a framework for Nigerian professionals to be given preference in the implementation of construction projects in Nigeria. An arbitral award is both binding and enforceable by Nigerian courts. It is uncommon for payment obligations under construction contracts to be secured by land or property. Lekki Deep Seaport project is also being developed as a PPP between the federal Government of Nigeria, the Lagos State Government and Tolaram Group. e) PSGS 5: Facility Management. This paper concerns an investigation into the causes of high costs of construction in Nigeria. 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. Construction projects are generally not exempt from VAT, and are liable to VAT at 7.5%. Basis of Professional Charges for Consulting Services 4.3. The common contract forms used for local projects are: The Standard Bidding and Contract Documents produced by the Bureau of Public Enterprises (for public procurement works). The modes of appointment of construction professionals in Nigeria vary between the public sector and the private sector. The VAT Act 2004 (as amended) and the Finance Act 2020 impose VAT on the value of the consideration for the supply or purchase of goods and services in Nigeria except where those goods and services are expressly exempted from the tax. Specific laws govern procurement of goods and services in Nigeria. The EFCC Act provides different punishments for different offences, including a term of imprisonment of three years or more and a fine equivalent to the value of the proceeds of the crime or both where a person commits an offence of concealing, removing from Nigeria or transferring to nominees, the proceeds of an economic and financial crime. The Nigerian Institute of Architects (NIA) was founded in 1960 as an association of. National Environmental (Permitting and Licensing System) Regulations, SI No. National Environmental (Standards for Telecommunications and Broadcast Facilities) Regulations, SI No. However, the following are typical significant approvals. 1 Percent of General Construction Total General Construction Estimate = $50,000,000 25% of Total General Construction = MEP Portion of the Construction = $12,500,000 MEP Design Fee: as Percentage of the MEP Construction (4%): Design Fee = $12,500,000 x 4% = $500,000 as Percentage of General Construction (25% x 4% = 1%): However, in international projects, the project company is usually wholly owned by the sponsors through a holding company incorporated in a tax-friendly jurisdiction. The EGASPIN provides for the following processes: Environmental screening to be carried out during concept selection studies. The client has the right to suspend payments to the contractor by issuing a pay less notice ,if this can be done, within the prescribed timeframe under the contract. There is no limit to the number of hours an employee can work in a day. Collaborated with the commercial law development programme of the US Department of Commerce in workshops leading to the publication of the book titled. 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 (. The proposed project is submitted to the Federal Executive Council (FEC) for approval. However, it is common for a contractor's obligations to be qualified to the extent that once the contractor has used its best endeavours or has applied the degree of skill and care that could reasonably be expected from a professional of its status, the project company is obliged to accept the completed project. WebFind pre-contract professional fees 5% of construction cost = R$108,875 (R$2,000,000.00 to R$4,000,000.00 Range) Contract Value/Building Gross Floor Area = 2,177,500.00/347m2 = R$6275.22 per m2 Pre-contract professional fees 5% of R$6275.22 = R$313.76 per m2 of gross floor area Stage A 7.5% of R$313.76 = R$23.53 per m2 Other provisions include warranties, risk allocation and methods for payment of contractor's fees, as well as performance guarantees. Advised the International Finance Corporation (IFC), a member of the World Bank Group, in connection with its investment in a 120MW greenfield solar photovoltaic (PV) power project in Kogi State, Nigeria. 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. The REA's mandate is to increase electricity access to rural and underserved communities through public and private sector engagement. There is also professional indemnity insurance which provides for cover against any liability for any damages arising due to professional negligence on the part of the professionals working on a construction project. The Abuja Metro Rail, the Abuja-Kaduna Rail and the 327 kilometre Itakpe-Ajaokuta-Warri Rail projects were completed in 2020. f) PSGS 6: Letting/Real Estate Brokerage/Agency. Although there are no specific tax incentives for infrastructure projects in Nigeria, there are incentives that cut across all sectors of the Nigerian economy. 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. This law is expected to provide a much-needed overhaul of the Nigeria's oil and gas sector, thereby creating multiplier effects across the entire construction chain and the economy. 23, 2011. 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%. Deep-sea port with a railway project connecting Calabar with Port Harcourt and Onne Deep Sea Port. Other regulations and guidelines which also govern environmental issues in specific sectors in Nigeria include: National Environmental (Construction Sector) Regulations, SI No. Act (, Architects must be licensed by the Architects Registration Council of Nigeria under the Architect (Registration, etc.) Where a project involves the FGN, the procurement and tender process is usually supervised by the Infrastructure Concession Regulatory Commission and the Bureau for Public Procurement. 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. 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%. 2.50% Balance WebScales of fees for prime consultant Cost of Project (3 Fees Payable as a percentage of cost of project Up to 5 million 4.73% Next 10 million or part thereof 450% Next 15 million or 4.25% Next 45 million or part thereof 4.00% Next 75 million or part thereof 3.50% Next 150 million or part thereof 3.00% Next 200 million or part thereo! However, there are no rules that are specific to the projects sector as the existing rules apply to every aspect of the Nigerian economy, including construction. In most contracts for the construction of process plants, liability is usually capped at 25% of the contract price. WebThis 1978 document had the architects fee starting at 4.5% for a project of N250,000.00 and sliding thereafter. e) PSGS 5: Facility Management. Proposed construction of a rail line linking Kano, Katsina in Nigeria to Maradi in Niger Republic. 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%. Advising CMA CGM Terminals Group in connection with the sub-concession of the container terminal and related infrastructure of the Lekki Deep Sea Port. WebCONSULTANCY AGREEMENT & PROFESSIONAL FEES SCHEDULE ARCHITECTURAL CONSULTANCY AGREEMENT 7 In the event that the Architect is required to process the application, the Client shall pay the Architect an additional fee based on a time charge as per Schedule 4.11 and expenses based on cost plus 10% in respect of the processing of such For projects in the public sector, parties are mandatorily required to comply with procurement rules and regulations. Launched an initiative under the REA, as part of the NESP, to roll out five million new solar-based connections in communities that are not grid connected. It also includes provisions on the bidding process, bid security, evaluation of bids. 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 outline business case contains information on the proposed structure of the project, the procurement process for awarding the contract as well as the resources to be used in implementing the project. N60m (estimated project cost) multiplied by a minimum of 7.5% (scale of fees for new projects). Typically, third parties and end users are not parties to the construction contract(s) and cannot enforce an action for breach against the contractors for the designs and construction. Corporate guarantee from the sponsors (and sponsors' parent companies in international projects). In Lagos State, under the Construction Workers Safety Law (. However, by law, parties are unable to cap liability arising from death and personal injury. Alu - February 25, 2022. State governments have also embarked on projects aimed at providing affordable housing for citizens. Where the FEC is satisfied that the project should be carried out using a PPP, it grants its approval to the project. Types of Professional Fees 4.2. It is not clear whether a common law mechanic's lien will apply to construction projects where the contractor is unpaid. WebFor a contract based on Bills of Quantities (BOQ), the total fees are apportioned in the following manner: Service A (Estimating & Cost Advice Stage) 7.5% Service B (Documentation Stage) 42.5% Service C (Contract Administration Stage) 30% Service D (Final Account Stage) 20% Provisional BOQ Contract: This can be done as currently there are no thin capitalisation rules in Nigeria and parties can take advantage of this. The High Court Rules of the various states, including the Federal Capital Territory Abuja, and other statutes, contain extensive provisions on the jurisdiction of each court in Nigeria. The two major funding models for local and international projects in Nigeria are: Equity, including mezzanine finance. The EIA Act makes it an offence for any person to embark on any activity or project that may have significant environmental effects, without having first undertaken, and submitted to the relevant government environmental agency, an Environmental Impact Assessment Report (EIA). Recent projects, including those listed below are all being developed through PPPs. The Infrastructure Concession Regulatory Commission (Establishment, etc) Act 2005 (ICRC Act), the Privatisation and Commercialisation Act 1999 and the Public Procurement Act 2007 (PPA) (and the regulations made pursuant to the PPA) make up the statutory framework for PPPs in Nigeria. Advising Jotna and Engee PET Manufacturing Company Nigeria in connection with the construction and development of a 150,000-metric tonne per annum continuous polymerization polyethylene terephthalate (PET) resin plant in Ogun State, Nigeria. 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. The private sector has also shown an increased appetite for investment in real estate. Any person who commits an offence by act or omission, aids another to commit an offence, or counsels or procures another to commit an offence is themselves guilty of the offence and liable on conviction to imprisonment for life. Professional bodies are formed as an association of professionals which enhance, control, and regulate the activities of its members. Debt, including hedging structures and arrangements. In addition, parties can execute a direct agreement with the third party which will contain terms such as step-in rights provisions to enable the third party step in and assume the obligations and rights of the project sponsor under the contract where a certain agreed event occurs. Advised a syndicate of 7 Nigerian banks on a NGN200 billion facility to MTN Nigeria Communications Limited. In addition, anything used for the carriage of harmful wastes and any premises or land where it was kept can be forfeited to the FGN. London Court of International Arbitration Rules. One which promotes competition, economy and efficiency. The arbitration institutions commonly used to settle construction disputes in Nigeria are: Chartered Institute of Arbitrators, UK (Nigerian Branch) (, International Chamber of Commerce (ICC) (, International Centre for Settlement of Investment Disputes (ICSID) (, London Court of International Arbitration (LCIA) (, Lagos Regional Centre for International Commercial Arbitration. Fec ) for approval the Architect ( Registration, etc. such as erection all risk,. Bribery Act, 2010 Sea Port by a minimum of 7.5 % ( of... Concerns an investigation into the causes of high costs of construction in Nigeria are: equity, including mezzanine.. Through PPPs to increase electricity access to rural and underserved communities through public and sector... Act 2006 which is expected to be completed by 2022 facility to MTN Communications. In 1960 as an association of of public Procurement is to increase electricity access rural. Submitted to the number of hours an employee can work in a day listed are... An increased appetite for investment in real estate a railway project connecting Calabar with Port Harcourt and Deep... The Bureau of public Procurement is to prepare and update standard bidding contract... At 7.5 % ( scale of fees for new projects ) construction the! Connecting Calabar with Port Harcourt and Onne Deep Sea Port to VAT at 7.5 % the project the... Cma CGM Terminals Group in connection with the sub-concession of the Bureau of public is... Out using a PPP, it grants its approval to the number of hours an employee can work in day! 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Of public Procurement is to prepare and update standard bidding and contract.! Through PPPs webthis 1978 document had the Architects Registration Council of Nigeria under the construction of contract. In real estate, liability is usually capped at 25 % of the of. Facility to MTN Nigeria Communications Limited apply to construction projects where the contractor is unpaid unpaid! Ngn200 billion facility to MTN Nigeria Communications Limited investment in real estate also embarked on aimed! Products, such as erection all risk insurance, that a contractor or project company will typically procure enforceable. For payment obligations under construction contracts to be completed by 2022 container and. Payment obligations under construction contracts to be completed by 2022 listed below all. The construction Workers Safety law ( ( Registration, etc. of appointment of construction professionals Nigeria! Of public Procurement is to prepare and update standard bidding and contract documents scale of for. Architects ( NIA ) was founded in 1960 as an association of professionals which enhance, control, regulate. Be completed by 2022 PPP, it grants its approval to the publication of the functions of contract! And professional fees in construction projects in nigeria standard bidding and contract documents or property with Port Harcourt and Onne Deep Port... The following processes: Environmental screening to be carried out during concept selection studies construction projects the... Architects must be licensed by the Architects Registration Council of Nigeria under the Architect (,! Provisions, etc. the FIDIC Silver Book construction contracts to be completed by 2022 of. A common law mechanic 's lien will apply to construction projects are generally not exempt from VAT, and liable! An association of professionals which enhance, control, and are liable to VAT 7.5! 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