Basis of Professional Charges for Consulting Services 4.3. In most projects, an incentive scheme is built into the contract to reward the contractor if it delivers the project ahead of schedule and on budget. Other provisions include warranties, risk allocation and methods for payment of contractor's fees, as well as performance guarantees. Typically, contractors are allocated all the following risks: Risk of compliance with applicable law and regulation. Time or Duration Based Fees CHAPTER FIVE: Adjustment of Fees 5.1. Typically, they are based on the FIDIC Silver Book. Advised Actis on its investment in the 459 MW Azura-Edo gas fired independent power plant in Edo State. Professional Bodies in Nigerian Construction Industry. Construction projects are generally not exempt from VAT, and are liable to VAT at 7.5%. 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. 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. N60m (estimated project cost) multiplied by a minimum of 7.5% (scale of fees for new projects). 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). Put and call options (that is, the right of the equity financiers or sponsors to compel the government to repurchase the assets or shares of the project company in the event that the project is expropriated or faces significant local risks). Advising a leading energy company in connection with the restructuring of loan facilities worth an aggregated USD723 million, aimed at mitigating the impact of the devaluation of the Naira on its business. Any premises used or to be used as a factory must be registered with the director of factories (, If any person is killed or dies or suffers any bodily injury because of a contravention of the Factories Act, the occupier or owner of the factory is liable to a fine of up to NGN5,000 and imprisonment for up to two years (. The preferred developer is selected through an open competitive bidding process in compliance with the PPA. 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! The 1999 Constitution of the Federal Republic of Nigeria (as amended) (Constitution) creates a high court for each state and the federal capital territory. 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 An alternative is to include a direct payment clause which allows for the employer to step in and pay the subcontractor directly where the contractor fails or is unable to make payments. 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. However, Nigeria currently builds just 2,000 houses per year. The Nigerian Institute of Architects (NIA) was founded in 1960 as an association of. The NESREA Act also regulates the effect of a project on the environment. However, Nigeria currently builds just 2,000 houses per year. 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 State governments have also embarked on projects aimed at providing affordable housing for citizens. The project company usually has no assets other than the project and will be the borrower under the financing agreements and a party to the project agreements. 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. WebThis 1978 document had the architects fee starting at 4.5% for a project of N250,000.00 and sliding thereafter. There are no prescribed methods of payment for construction work in Nigeria, as a result, the payment method to be adopted is usually a subject of negotiation between the parties and can be influenced by the nature of the project. Advised NG Power-HPS Limited in connection with the acquisition of majority shares in First Independent Power Limited. The Pension Reform Act 2014 imposes an obligation on employers to obtain life insurance cover for all their employees. The insurance must have a value that is at least three times the total annual emoluments of all the employees. To be excused from performing its obligations whilst the force majeure event lasts, the party seeking to rely on the force majeure provision would typically be required to comply with additional contractual requirements to the satisfaction of the other party, including reporting and damage mitigation requirements. Due to the increasing cost of key infrastructure projects in the country and dwindling government financing, the government has used public private partnership (PPP) arrangements to finance projects for which the government is not able to secure debt financing, for example the: Highway Development and Management Initiative, a PPP, which is expected to attract over NGN1 trillion in private investment for the development and maintenance of road networks. Section 46 of BOFIA prescribes a penalty of up to five years imprisonment and fine of NGN5,000,000 or both for an employee or officer of a bank who asks for or receives or agrees to receive any gift, money, property or thing of value for their personal benefit, for procuring or trying to procure for any person, any advances, loans or credit facility from the bank, or any other service rendered in line with their duty as an employee of the bank. The following forms of security are typically taken in infrastructure projects: Share charge on all the shares and other equity rights (present and future) of the sponsors in the project company (and holding company). These laws require that a formal tender or bid process be undertaken in the selection of construction professionals for public sector projects. The Nigerian Institute of Architects (NIA) was founded in 1960 as an association of. Construction of the Second Niger bridge which is expected to be completed by 2022. Signed a six-year, NGN1.15 trillion (about USD3.8 billion) contract with Germany's Siemens AG for a three-phased electrification project further to the Presidential Power Initiative (PPI) which is aimed at increasing Nigeria's power supply in three phases to 25,000 MW. Time or Duration Based Fees CHAPTER FIVE: Adjustment of Fees 5.1. 19, 2011. Enter to open, tab to navigate, enter to select, https://content.next.westlaw.com/practical-law/document/I0487c15d13ed11e498db8b09b4f043e0/Construction-and-Projects-in-Nigeria-Overview?viewType=FullText&transitionType=Default&contextData=(sc.Default), Construction and Projects in Nigeria: Overview, https://iclg.com/practice-areas/project-finance-laws-and-regulations/nigeria. The two major funding models for local and international projects in Nigeria are: Equity, including mezzanine finance. Controversy is sprouting again among building sector professionals on the scale of fees being charged in the industry. Controversy is sprouting again among building sector professionals on the scale of fees being charged in the industry. 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. The two pieces of primary legislation that govern environmental issues in Nigeria are the: Environmental Impact Assessment Act (EIA Act). In many cases, the project company is a joint venture entity between a local sponsor and a foreign entity that will provide technical or management services to the project. Webprofessionals in the Built Industry to develop an harmonised scale of fees. Construction contracts do not differ for international projects. WebProposed Level of IT Professional fee for Projects CHAPTER FOUR: Method of Determining Remuneration 4.1. In other cases, the overall cap does not exceed the amount of the contract price. Some of the penalties under Nigerian anti-corruption laws include the following: The Corrupt Practices Act prescribes a penalty of seven years imprisonment for any person who, being a public official: corruptly asks for, receives or attempts to receive or obtains any property or benefit of any kind before or after doing or omitting to do something in an official capacity; gives, confers or procures, or promises or offers to give, confer, procure or attempt to procure, any property or benefit of any kind to or for a public officer, or any other person on account of any act performed in an official capacity. According to the Minister of Transport, the Kano-Maradi rail is aimed at facilitating bilateral trade between Nigerian and Niger. Contractual protections such as payment bonds and guarantees, including the obligation to issue a standby letter of credit, are more commonly used by contractors to secure payment. National Environmental (Standards for Telecommunications and Broadcast Facilities) Regulations, SI No. 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. Tertiary education tax of 2% of its assessable profit. WebThis 1978 document had the architects fee starting at 4.5% for a project of N250,000.00 and sliding thereafter. In 2019, the Ministry of Works and Housing set aside a total sum of 19.8 billion naira ($55 million) for the construction of 2,383 units of housing across the 36 states of Nigeria under the National Housing Program. These laws include the US Foreign Corrupt Practices Act and the United Kingdom Bribery Act, 2010. 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