Dissecting Planned Concession Of Nigerian Airports

As the calls for the concession of Nigerian airports grow, experts have called on government to put it on a sound footing to avoid the mistakes of the past. They agreed that FAAN’s inefficiency makes the call more vociferous. WOLE SHADARE writes

Airports in terrible shape

That Nigerian airports are in decrepit state is not in doubt. The decay stares you in the face. This also brings to the fore over N500 billion allegedly spent on airports remodelling. Not a few believe that the project was a scam on many tax payers.

The decrepit facilities at most of the country’s aerodromes have negatively affected the low passenger traffic currently recorded by the Federal Airports Authority of Nigeria (FAAN). These poor facilities have also not helped in rating Nigeria highly when it comes to global airports rating.

Minister admits rot

The Minister of State for Aviation, Hadi Sirika recently expressed his frustration, saying with the right facilities at the airports, Nigeria’s yearly traffic could be as high as 50 million, adding that many airlines that would have love to come are delaying their decisions. The appalling state of Nigerian airports could have given rise to the concessioning of four of the major airports.

The airports government has listed to be concessioned are the Murtala Muhammed Airport, Lagos, the Nnamdi Azikiwe Airport, Abuja, the Mallam Aminu Kano International Airport (MAKIA), Kano and the Port-Harcourt International Airport.

Had FAAN done well with resources at its disposal by providing world class aerodromes, perhaps nobody would be talking about concession or privatisation. The truth of the matter is that FAAN is highly inefficient, corrupt and unable to develop ideas that would bring our airports at par with countries such as South Africa, Ethiopia, Kenya, Egypt and others.

FAAN lacks transparency

A former Director-General of Nigerian Civil Aviation Authority (NCAA), Dr. Harold Olusegun Demuren at a stakeholders’ forum last weekend, said the FAAN lack of transparency, adding that the authority operated with no good governance and transparency in all its dealings.

He noted that apart from political interference, “FAAN is what I call going there to fetch water”, euphemism for alleged massive scam. “I have no apology for saying this. We won’t be talking about privatisation/concessioning if FAAN had been efficient,” Demuren added.

He noted that right now we have to be clear on what concessioning is and what the government is concessioning. He added, “We need to clear them, we need to know. Right now we are still building airports. The Chinese loan airports, they are still building, they have not operated and have not even determined when to transfer so what are we concessioning?” “We must get the best of investors but we haven’t resolved the issues that are on ground, all the litigation, all the conflicting agreements should be reviewed.

Now are we going to concession the Chinese terminals too? It is a naïve question but I am naïve and the government should come out with clear explanations.” Demuren suggested that the major airports slated for concessioning work with other airports so the state governments should be engaged as they have a stake in the airport and more often than not are willing to invest to keep their airports running, “it is a thing of pride”.

Policy not yet clear

However, not everybody is buying into the concession deal as some are still in the dark about what exactly the government wants to privatise. So those who are clamouring for concession reason that as the private sector is willing to invest in airport development, the facilities should be handed over to them, rather than the government holding tight to them when it does not have the wherewithal to develop the infrastructure.

Proponents of airport concession cite the Murtala Muhammed Airport Domestic Terminal (MAA2) as a good example of the private sector driven airport facility development.

The terminal was built by Bi-Courtney Aviation Services Limited (BASL) under a build, operate and transfer agreement. The terminal was opened in 2007 and today when compared to the airport terminals being managed by FAAN, MMA2 is relatively better in terms of passenger facilitation, modern facilities and IT equipment.

Experts are of the opinion that for Nigeria to develop its airport infrastructure, it must have to privatise. They recommended different models of privatisation, which include full privatisation, joint venture and management contract.

Infrastructure development

They explained that the management contract style must be run like a private sector; electricity must be constant, landing and navigational aids must be upgraded and the fiscal environment must change, as domestic airlines must get some level of protectionism.

The Chief Executive Officer of Bi-Courtney Aviation Services Limited, Capt. Jari Williams, who spoke at a conference on privatisation/ concession of Nigerian airports held in Lagos at the weekend, said sadly, aviation has not been spared in the wind of controversial concessions, which he said have either failed or have been stalled by the government. He however, threw his weight behind the planned concession of the four major airports by the government.

His words: “There are no two ways to save our almost derelict airport terminals than concession. Seeing the way MMA2 is being managed, the immediate past Minister of Aviation, Osita Chidoka, had recommended that more airports be taken away from FAAN and handed over to private managers.”

Williams noted that the concession between FAAN and Maevis Nigeria Limited to shore up the authority’s revenue base through the Airport Operations Management Systems (AOMS) was a classic case of a concession gone awry.

He lamented that this was even after Maevis had invested billions of naira to buy and install equipment for the job at the Lagos airport despite the fact that the authority lost in the court of law.

Also, FAAN engaged billionaire businessman/ politician, Chief Harry Akande’s AIC Hotels Limited in a battle of wits over a parcel of land leased to the company to build an international hotel around the international wing of the Lagos airport under a concession agreement in 1988.

Despite a court order, officials of FAAN allegedly went physical with those of AIC just to recover the land from the company.

They chased away the company’s workers from the parcel of land and seized their tools. To him, Public Private Partnership (PPP) would permanently solve the myriads of problems confronting the four airport terminals, but noted that for this to be realistic, the Infrastructure Concession Regulatory Commission (ICRC), must be strengthened to bark and bite.

Conclusion

Nigerians, who are pushing for the concession, have suggested that government should development a policy on airport concession and put in place administrative and legal frameworks that will provide the platform for transparent concession agreement that would be fair to both government and the investors.

Wole Shadare