PPP as panacea for Nigeria’s airport debacle

PPP as panacea for Nigeria’s airport debacle

By In Travel News On 01/24/2018

That the Federal Government is insisting on concessioning the four biggest airports in the country to private investors is a serious indictment of the managers of the facilities, who could not manage them to profitability. Any discerning mind will agree with the government that airports across the country are wasting away under the watch of the failing Federal Airports Authority of Nigeria (FAAN), some of whose officials are protesting the government’s new thinking because their taps of cheap and underserved income will soon dry up.

Despite the advantages of a huge population and massive resources, Nigerian airports are known to be among the worst in Africa. In fact, a survey conducted late 2014 by The Guide To Sleeping In Airports, the website documenting information on airports and the people who sleep in them, which is still relevant till date, rated three Nigerian airports among the worst in Africa. Ironically, these three airports are regarded as the best in Nigeria. And these three are among the four up for grabs by concessionaires any moment from now.

They included the supposed flagship airport, Murtala Muhammed International Airport (MMIA), Lagos, Nnamdi Azikwe International Airport, Abuja, and the Port Harcourt International Airport, which were rated as the 10th, seventh and sixth worst respectively. Although FAAN shouted blue murder when the result of the survey was released, many Nigerians who regularly pass through the three airports and others in the country were not surprised at the result of the survey. Good enough, these and Aminu Kano
International Airport, Kano, have been pencilled down for concessioning by the Federal Government.

Sadly, the three Nigeria’s international airports were in the group of others rated as the worst airports in Africa. They include the Khartoum International Airport, Sudan (first); Kinshasa N’djili International Airport, Democratic Republic of the Congo (second); Tripoli International Airport, Libya (third), all in war-torn countries; Dar es Salaam Julius Nyerere International Airport, Tanzania (fourth); Luanda Quatro de Fevereiro International Airport, Angola (fifth); N’Djamena International Airport, Chad (eighth) another war-torn country, and Accra Kotoka International Airport, Ghana (ninth).

Unfortunately, this rating was coming after a past Aviation Minister, Princess Stella Oduah, had wasted billions of naira on the airports in what she called Airport Remodelling Project.

The result of this survey clearly showed how all the past and present efforts of FAAN have failed to achieve the desired result at the airports, while the agency consistently and shamelessly defends the rot in the facilities, and at the same time frustrates all its concessionaires who would have assisted it in closing the wide aviation infrastructure gap. This is the more reason why the present administration of President Muhammadu Buhari said it would privatise the four major airports in the country for optimum delivery and profitability. Such policy change, which is long overdue, should be expected, if we must be seen as a serious people. Interestingly, some aviation workers unions are kicking against the concessioning of the airports in a clear demonstration of their inability to see beyond their noses.

In fact, their misinformation that the government wants to sell the airports to private investors speaks volume of either their level of ignorance or deliberate mischief. Surprisingly, past attempts at having a successful PPP, especially in the aviation sector in Nigeria, have been frustrated by these same government officials who take delight in using the airports as drain pipes to siphon funds each time they carry out one renovation or the other on the facilities. Political appointees and inefficient government agencies have also continued to battle private investors who borrowed money at high interest rates to assist the government in infrastructure provision. The ripple effect of this is that many potential investors have been scared away because of the sad experiences of those who have ventured to help.

However, why should the government leave the country’s airports that are frequently in darkness in the hands of incompetent managers, anyway? Why should the government allow its agents to run airports where touts harass passengers and other visitors without restraint? Why should incompetent managers run airports where aircraft cannot take off and land in the night due to lack of facilities?

The answer to these questions is simple: give the airports to tested and experienced hands to manage them and shame the leeches who have been feeding fat on the facilities for years. In many parts of the world, the governments have consistently used the Public-Private Partnership (PPP) model to provide infrastructure for their citizens, and such has always worked perfectly well. Even in Nigeria, this has been demonstrated through the first and only successful PPP project – the Murtala Muhammed Airport Terminal Two (MMA2) – executed and operated by Bi-Courtney Aviation Services Limited (BASL). George, a Procurement Specialist, sent in this piece from Lagos.

Although some experts have said that the airports to be privatised under this dispensation should be divided into clusters for effective privatisation, the bottom line is that experienced hands in the private sector are needed to lift the airports from the decay they have slipped into.

Clearly, there are certain benefits of PPP, as have been espoused by the managers of MMA2, which is the only airport terminal that actually meets international standards in all departments of its operations. No wonder, the government of Sierra Leone sent a team to understudy the operations of the terminal in 2014.

Besides, while PPP intervention in the country’s aviation sector will fill its huge infrastructural gap, the model will also make it possible for local investors to inject funds into the sector, thereby creating more jobs and reducing the burden and size of the public service. It is also noteworthy to say here that any facility under PPP is always more efficiently managed and actually costs the government little or nothing.

For optimal performance, we need to strengthen the Infrastructure Concession Regulatory Commission (Establishment, etc) Act 2005 and the Public Procurement Act 2007, especially in the area of conflict resolution, as a way of encouraging private investors to stake their money and reputation in the aviation sector, instead of their vilification by misinformed and selfish government officials.

Countries in Europe, especially Britain, which pioneered the idea of PPP in 1992 with its Private Finance Initiative (PFI), and America have since embraced PPP, and they are better for it today. Many developing countries are also embracing the model because of its numerous advantages. In fact, the Jamaican government published the initial PPP Policy documents, popularly called PPP3, in 2012, which has led to the government divesting its large interests from the Sangster International Airport. In process is the Kingston Container Terminal and the Norman Manley International Airport, both in that country.

Besides, a Nigerian, Adebayo Ogunlesi, who owns Global Infrastructure Partners (GIP), a private-equity firm, operates the London Gatwick Airport today, and the British Government has given him full cooperation to operate freely. GIP, which manages about $18.7 billion, led the acquisition of Gatwick Airport Limited and has a stake in Australia’s Port of Brisbane.

In india, despite opposition from the country’s Airports Authority Employees Union (AAEU), the government is going ahead with the privatisation of four more airports, including Chennai, Kolkata, Jaipur and Ahmedabad.So, Nigerians, especially the recalcitrant aviation workers, should embrace what is spreading like wildfire the world over by supporting the Buhari administration to privatise the four proposed, almost derelict airports as a way of making them more efficient and earn more money to the government. This is the most reasonable thing to do now that the price of oil, our main revenue earner, is at its all-time low.

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Murtala Muhammed Airport Terminal Two

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