Experts divided over airports concessions

*Bruce, Ore, Williams back action

*Demuren, Meggison seek clear cut concession direction

Stakeholders in the aviation industry were sharply divided over the plans by the Federal Government to privatise four of the major aerodromes across the country. The four airports that are slated for concessioning are those in Lagos, Abuja, Port and Kano.

To show its seriousness, the Minister of State for Aviation, Hadi Sirika had already set up two committees to midwife the process. He had assured that the process would be transparently carried to the satisfaction of stakeholder.

That remains to be seen as the committees are yet to submit their reports which are expected to show a clear roadmap for the deal Sirika said would help boost revenue and help to enhance facilities at these airports.

The stage was set. Speakers comprising renowned Economist, Prof. Pat Utomi, respected pilot and a former Director of Operations of defunct Nigeria Airways, Capt. Dele Ore, former Director-General of the Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren, Chairman, Senate Committee on Aviation, Senator Ben Murray Bruce, Chairman, Airline Operators of Nigeria (AON), Capt. Noggie Meggison among other speakers.

Senator Ben Murray Bruce who provided what his committee, the Privatization committee of the senate was doing to get the country out of its current recession expressed unhappiness at the state of the nation’s aviation sector.

He said an outright privatization like what was done in the United Kingdom would move the industry leaps and bounds, according to him, statistics show that governments that have accepted some kind of privatization or concession has shown to be doing well as against those that have not.

He stated that Nigeria, along with Pakistan, Afghanistan and two others were wallow at the bottom end of worse airports in the world while airports in Singapore, Dubai, Japan were on top of the food-chain and have been privatized unlike the previous he mentioned.

In his presentation at a conference on Privatisation/ Concession of Nigerian Airports convened by the Chief Executive Officer of CheckinNigeria, Michael Chikeka today in Lagos, Ore stated that the best way to go was to concession the airport owing to many years of decay and inefficiency by the Federal Airports Authority of Nigeria (FAAN).

He however warned that the utilities to be concessioned should not end up in the hands of friends and families of those putting up the facilities for sale.

Speaking in the same vein, AON chief, Meggison disclosed that because of funds to upgrade its facilities, the agency went for the China Loan of $500m, (N152.5b)  to be paid in 22years which is currently being used to build the Four International Terminal Buildings in MMIA, NAIA, MAKIA and Port Harcourt.

“The repayment is about N6.9b per year or N578m per month. This has enabled FAAN to increase the passenger capacities from 15million annually to 46 million passengers for these four International airports.”

He disclosed that the pro-active steps already taken by FAAN over the years include the followings:- Murtala Muhammed International Airport runway was resurfaced in 2004 at over N3.4b; Murtala Muhammad Domestic runway was resurfaced in 2007 at N3.3b; MAKIA Runway was resurfaced in 2003 at N1.9b; Port Harcourt Airport runway was resurfaced in 2007 at N2.3b.

More proactive step he said the authority had taken included Calabar Airport runway which was partially resurfaced in 2011 at N832m; Maiduguri Airport runway was partially resurfaced in 2011 at N499m; Kaduna airport runway was partially resurfaced in 2010 at N816m; Enugu Airport runway was extended and expanded with overlay in 2012 at N10b; Benin Airport runway was partially resurfaced in 2015 at N351m.

The Abuja airport runway, he noted would soon be resurfaced at a cost of N1.5b, adding that at an average cost of about N2b for total resurfacing and structural repairs of base formation, the remaining 11 other runways will cost FAAN about N22b which can be easily handled by FAAN, in planned sequential execution.

“Even if we want to execute them, we can obtain further China loan at the attractive 6% interest rate and payable over 22years.”

A former Director-General of the Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren said, if government goes into this concession without resolving the other concessions, there will be a flurry of litigations. He maintained that air transport needed to be fixed or dire consequences will follow.

Addressing Senator Ben Murray Bruce who had spoken earlier Demuren said, “We need to fix aviation or Ben, you will be going to Abuja with a canoe. If we don’t others after us will move with camels, he retorted jokingly.

“When government doesn’t keep agreements, they destroy the industry. Right now we have to be clear on what concessioning is and what we are concessioning, 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 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”.

He asked government to engage the unions, be honest about it and provide them with facts and figure as well as ensure they do not make pronouncements and go back on them.

The Chief Executive Officer of Bi-Courtney Aviation Services Limited, operator of the ultra-modern Murtala Muhammed Airport (MMA2), Capt. Jari Williams who spoke at a conference on privatisation/concession of Nigerian airports held in Lagos today, said sadly, aviation has not been spared in the wind of controversial concessions, which he said have either failed or have been stalled by government.

He however threw his weight behind the planned concession of the four major airports by 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 had recommended that more airports be taken away from FAAN and handed over to private managers.”

“It is good that the incumbent Minister of Transportation, Rotimi Amaechi accepted this recommendation without any sentiment or partisanship because it is a brilliant idea; it remains the best way out of the bad situation the country’s airport terminals are in right now.”

It would be recalled that the Federal Government had in the wake of infrastructure deficit in the aviation sector, contracted Bi-Courtney to build an airport terminal under the Build Operate Transfer (BOT) basis seven years ago.

Shortly after the reported N35 billion facility, was built, the Federal Airports Authority of Nigeria (FAAN) allegedly placed hurdles on the path of the concessionaire, claiming that it was not sure of the duration the terminal would revert to government, claiming that the deal was skewed in favour of the terminal operator.

Williams cited the concession between the 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, lamenting that 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.

In the same vein, 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 seizing 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 ICRC must be strengthened to bark and bite.

He stated that practicable conflict resolution mechanism must be put in place to resolve any issues that may arise in the proposed concessions.

Williams further stated that if a Nigerian, Mr. Adebayo Ogunlesi who owns Global Infrastructure Partners (GIP), a private equity firm operating the London Gatwick Airport is getting the British Government cooperation and support to operate freely.

He wondered why the Nigerian government should not consider, support and cooperate with indigenous firms to handle “our airport terminals?, stressing that GIP which manages about $18.7 billion led the acquisition of Gatwick Airport Limited and had a stake in Australia’s Port of Brisbane.

Nigerian firms, especially with experience in airport development and management like Bi-Courtney Aviation Services Limited, he said, must be considered first in the attempt to concession the four terminals.

Concessioning the aerodromes to foreign firms, he stated will eat deep into the country’s foreign reserve and may be a big threat to the nation’s security and safety as a nation.

Wole Shadare