FG’s concession of four major airports

FG’s concession of four major airports

By In Travel News On 01/24/2018

Plans by the Federal Gvernment to concession the Murtala Muhammed Airport (MMA), Lagos, Nnamdi Azikiwe Airport (NAA), Abuja, Port Harcourt International Airport (PHIA), Omagwa and Mallam Aminu Kano International Airport (MAKIA), Kano – the four major airports in the country – has spawned suspicion, anxiety and covert agitations in the nation’s aviation industry.

The Minister of State for Aviation, Senator Hadi Sirika, recently inaugurated two committees to superintend the concessioning and ensure it is accomplished without any hitch. It would seem, nonetheless, that an appreciable number of stakeholders are in support of the idea. It will reduce the financial burden of government; as well as hasten the development of airport facilities and the efficient management of same, the argument goes.

The puzzle, however, is that the FG is pushing for the fresh concessioning at a time when the dispute between the government and Bi-Courtney Aviation Services Limited (BASL),on the concession of Murtala Muhammed Airport Terminal Two (MMA2), Lagos is yet unresolved. MMA2 prides itself as the first and only privately funded terminal in the country.

It was conceived after fire gutted the domestic terminal of MMA on May 10, 2000. The tenure spelt out in the concession agreement and the facilities involved are still mired in controversy and litigations.

While FAAN says the authentic agreement document limits the duration of the concession to 12 years; and that the General Aviation Terminal (GAT) did not form part of the concession, BASL claims the tenure is 36 years and that the GAT was part of the deal. In May this year, for instance, the controversy smouldered to new highs when BASL, the operator of MMA2, claimed Arik Air was not indebted to FAAN, but to it. The firm’s Chief Operations Officer, Adebisi Yewande Awoniyi, in a statement, said Arik Air operations at the GAT were disrupted on April 20 by aviation unions and some FAAN workers over the airline’s alleged N12.5 billion indebtedness to FAAN. Awoniyi claimed the alleged N12.5 billion debt was part of Bi-Courtney’s legitimate revenue which FAAN had been cornering “even after an Arbitration Panel, a Court of Law and an Appeal Court had ruled in our (BASL’s) favour”.

A widely publicised statement by the General Manager, Corporate Communication, FAAN, Mr. Yakubu Dati, much earlier, however, acknowledged that the case between FAAN and BASLwas yet to be finally decided by the judiciary, but lambasted BASL for allegedly championing a campaign of calumny against both the Federal Ministry of Aviation and FAAN in respect of the dispute. Said Mr. Dati: “The pertinent questions remain: agreement approved by who; does the Ministry of Aviation and FAAN have the authority to cede government property to a third party or concessionaire, without the approval of the Federal Executive Council, which approved the initial concession in the first place?

It should be noted that it is not in all the cases that a minister’s action receives the approval of Mr. President; and some ministers have been relieved of their portfolios or meted with stricter measures because of such illegal or irrational actions”.

Meaning something went wrong with the FG-BASL deal. The FAAN spokesman said the draft agreement for the Build, Operate and Transfer (BOT) deal was for a total cost of N3.9 billion; and that the tenure of the agreement was 12 years, dully approved by the FEC. “This is the only authentic agreement”, Dati stated.

He said immediately after the agreement, BASL got a N38 billion loan facility contrary to the terms of the agreement which pegged the cost at N3.9 billion; and then approached a consultant, KPMG, which said it would take 36 years to recoup the N38 billion. “Bi Courtney is the one talking about its predicament, so the onus is on it to justify this so-called predicament imposed by government, by publishing the document signed by the same government granting it a 36-year concession and the ownership of GAT”, the FAAN spokesman stated in addition.

It is under this knotty circumstance the FG is pushing for the concession of the four airports. Therefore, forging on with the planned concessioning demands that care is taken to avoid a repeat of past mistakes; and ensure transparency in the spirit and letters of all the agreements.

The limit of the powers of concessionaires should be clearly defined. Government/ investor satisfaction, trust and confidence should be mutually guaranteed. If a smooth concessioning deal is desired, the sustenance of the remaining 17, scarcely viable airports should be factored in. Besides, the fears or suspicions of all stakeholders, including FAAN’s hierarchy and workers likely to be affected one way or the other by the new ownership arrangement need to be sincerely addressed.

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Murtala Muhammed Airport Terminal Two

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