In. 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 Cost is a vital element in every development. In addition to the EIA Act, the Environmental Guidelines and Standards for the Petroleum Industry in Nigeria (EGASPIN), which apply specifically to the oil and gas industry, requires an EIA to be carried out when constructing certain oil and gas facilities, including oil and gas pipelines, crude oil production facilities, tank farms, hydrocarbon processing facilities, product depots, waste treatment/disposal facilities and so on. 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. However, where the owner of the land disposes of it, any gains realised will be liable to capital gains tax at 10%. 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%. In practice, an eight to nine-hour working day is the norm. 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 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 In the power sector, the caps in engineering, procurement and construction contracts range between 10% and 15%. all licensees (that is, project developers) must give first consideration to goods made in Nigeria and services provided by Nigerian firms in the award of their contracts. Table of Professional Charges 4.5. Advised New Electricity Development Company Ltd on the acquisition of Ikeja Electricity Distribution PLC. The obligations under the EGASPIN are in addition to any other environmental compliance requirement set out under any other law. 0. Federal Ministry of Works Contract (variant of the JCT). 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. 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. Approval of project documents by lenders. 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. In July 2012, the Central Bank of Nigeria issued the Sustainable Banking Principles under which banks and other financial institutions undertook to integrate environmental and social considerations into business decision making. There are various mechanisms available to Nigerian companies for mitigating taxes, depending on the nature of the transaction and the project. Cost is a vital element in every development. Final EIA to be prepared and approval obtained at the end of detailed engineering design but before the commencement of any construction activities. Act (. Act (, Architects must be licensed by the Architects Registration Council of Nigeria under the Architect (Registration, etc.) 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 EFCC Act prohibits anyone from concealing, removing from Nigeria or transferring to nominees, the proceeds of an economic and financial crime, on behalf of another, with the knowledge that such proceeds are as a result of criminal conduct by the principal. WebConstruction projects are generally not exempt from VAT, and are liable to VAT at 7.5%. The EIA must be approved by the Department of Petroleum Resources (DPR). e) PSGS 5: Facility Management. Act) (, Money Laundering Prohibition Act 2011 (as amended) (MLPA). Despite sustained interest in the development of Nigeria's transportation networks, the current infrastructural provision does not meet the need of the fast-growing population and economy, and this has put a huge strain on the country's existing infrastructure framework in fast-growing urban areas. Advised NG Power-HPS Limited in connection with the acquisition of majority shares in First Independent Power Limited. 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). Where there is a third party with an interest in the project, it is standard practice for the consultants to be required to provide specific collateral warranties in favour of the third party. Where the FGN or any of its agencies is a party to the proceedings or where the dispute relates to the executive, administrative or managerial action or inaction of the FGN (other than a simple breach of contract), the Federal High Court would have jurisdiction. 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. The Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, 2004 prescribes a penalty of three years imprisonment for similar offences as those immediately above. The EGASPIN provides for the following processes: Environmental screening to be carried out during concept selection studies. Webprofessionals in the Built Industry to develop an harmonised scale of fees. The Nigerian construction industry struggled in 2020 due to disruptions caused by the COVID-19 outbreak and the subsequent lockdown measures. Construction projects are generally not exempt from VAT, and are liable to VAT at 7.5%. There are other non-compulsory insurance products, such as erection all risk insurance, that a contractor or project company will typically procure. Construction & Engineering Laws and Regulations Nigeria 2022-2023. Data provided by the National Bureau of Statistics (NBS) shows that the construction sector grew by only 1.42% in Q1 2021 from 1.21% in Q4 2020. The PPA requires all procurement of goods and works by a public entity to be done by way of open competitive bidding. Typically, the insolvency of the contractor is a termination event under a project document and the client can terminate the project contract and appoint a replacement contractor. WebConstruction projects are generally not exempt from VAT, and are liable to VAT at 7.5%. Arbitration is either ad hoc or institutional. 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%. 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 However, this rate does not apply to persons occupying executive, administrative, technical or professional positions such as engineers, engineering technologists, engineering technicians, engineering craftspersons, and project managers. 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. Some contracts also include provisions permitting the contractor to initiate a change proposal where the contractor considers that: A request by the client will have a technical or financial impact on the project. Another right of the client is to take physical possession of and secure the site. 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: Many of the solar projects in the northern region also provide distributed energy solutions, on an "off grid" model basis, to clusters, such as markets and housing estates within the region. In this revision, the starting band was increased from N250,000.00 to N5 Million. Risks associated with fitness are mitigated through performance guarantees from the contractors. The relationships between employers, contractors and subcontractors are typically governed by ordinary principles of contract law. 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. Parties to construction contracts in Nigeria typically negotiate their contracts on the basis of a draft prepared by their advisers including lawyers. The Central Bank of Nigeria (CBN) and the National Insurance Commission have also issued anti-money laundering regulations applicable to the banking and financial and insurance sectors respectively. Basis of Professional Charges for Consulting Services 4.3. In terms of transaction structure, a special purpose vehicle (project company) is usually set up by the sponsors for the sole purpose of implementing the project. 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%. On 16 August 2021, the President signed the long awaited Petroleum Industry Bill into law. In relation to construction professionals, each profession usually has a scale of professional fees which is applied to calculate the fees payable to the professional for the services provided on the project. For example, most of the roads networks in Nigeria are still in bad shape. Basis of Professional Charges for Consulting Services 4.3. This is broken down into. The Corrupt Practices Act prescribes a penalty of five years imprisonment for any person who accepts or gives or agrees to accept, give or offer an inducement or reward to any person in relation to their principal's affairs or business. N60m (estimated project cost) multiplied by a minimum of 7.5% (scale of fees for new projects). 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. Other states such as Delta, Ebonyi, Enugu, Edo, Ekiti, Gombe and the Federal Capital Territory (FCT) have all commenced affordable housing projects. In relation to construction projects, one mechanism is funding the project company with more debt than equity and so reducing the taxable income of the special purpose vehicle. There is currently no VAT on the transfer of real property in Nigeria. Rivers State Public-Public Participation in Infrastructure Development Law 2009. This Scale was used for the next 14 years until 1992 when it was revised. Standard forms of contracts prepared by the Joint Contract Tribunal (JCT). Advised Actis on its investment in the 459 MW Azura-Edo gas fired independent power plant in Edo State. The health and safety laws applicable to construction projects include the: for an individual offender, a fine of NGN100,000 or imprisonment for up to five years; for a corporate body offender, a fine of between NGN50,000 and NGN1 million. Professional bodies are formed as an association of professionals which enhance, control, and regulate the activities of its members. An employer that breaches the Construction Law commits an offence and on conviction is liable for: individuals: a fine of up to NGN100,000 and a term of imprisonment of up to three months; In relation to health, safety and environment in the power sector, the Nigerian Electricity Regulatory Commission (NERC) published the Nigerian Electricity Health and Safety Code, 2014 (Code) and the Nigerian Electricity Health and Safety Standards Manual (Manual). Will typically procure a public entity to be carried out during concept selection studies subsequent lockdown measures be prepared approval. 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