Lagos airport to rake in N30b annually from concession-Minister

• FG plans rail to link Lagos airport terminals

The Minister of Aviation, Hadi Sirika has said the concession of the four international airports in Lagos, Abuja, Kano and Port-Harcourt would fetch the nation enormous investments.

The Minister specifically disclosed that the concession of the Murtala Muhammed Airport terminals would bring investment of over N30 billion annually which would be boosted by the construction of a rail line to link both the domestic and international terminals.

Sirka who spoke at a webinar jointly hosted by the Ministry of Aviation,  the Infrastructure Concession Regulatory Commission (ICRC) and the National Policy on Public Private Partnership on the concession further stated that state governments would not be allowed to take part in the ongoing concession exercise in a bid to guarantee transparency.

He noted that the exclusion of state governments from the bidding exercise would amount to taking off the management of infrastructure and substituting another form of government’s management.

He however stated that states that had gone into building of airports can concession them like the case with Asaba airport which was early this year concessioned the facilities to a consortium of private investors under a Public-Private Participation (PPP) model.

His words, “The terminal building in Lagos is expected to bring investment of about N30 Billion annually because we are going to link the domestic terminal to the international airport. There would be an investment plan by the concessionaire before we hand over the terminals to the preferred bidders. It is part of the process.

“Government is not ready to put money into airport infrastructure. Let the concessionaire bring in his money and at the end of the day, the facilities return back to the government. There are other competing needs for the scarce resource especially when we have health, education and others needs”.

Our airport in Nigeria operates sub-optimally. Government has no money to pump into airport infrastructure. Our airports operate for few hours except for few. The population growth of Nigeria is rising. Murtala Muhammed International Airport was built for less than one million capacity but today, we are doing eight million while we have 19 million passenger traffic from all over the country. Nigeria is a good country for investment”.

Sirika allayed fear of workers and other stakeholders over the model of concession to be applied and the apprehension that many workers of the Federal Airports Authority of Nigeria 9FAAN) would suffer job losses.

He reiterated that the Nigerian airport concessions would be a terminal concession with majority of its revenue would be derived from non aeronautical sources, just as he noted that all other facilities at the airports and existing concessions outside the airport terminals will still be managed by FAAN.

Passenger service charge and security charge, he further stated, would be shared by FAAN and the concessionaire and FAAN’s share of the charges shall be paid directly to FAAN by the International Air Transport Association (IATA), the clearing house of over 250 global airlines.

Aviation Metric gathered that Infrata, Dentons, Proserve, Ciena and Templars act as the transaction adviser to the Federal Ministry of Aviation.

Infrata (the consortium lead) provides advice on behalf of investors, lenders and vendors involved in infrastructure and project finance transactions globally.

Established in London, Infrata has acted as advisor on many high profile transactions in Africa, the Americas, Europe, Asia and Africa alone with $100 billion value of transactions of date, with over 200 infrastructure projects.

Infrata has over 20 activities in 20 countries, with about 30 major projects in construction or in operation. Dentons are experts in infrastructure and PPP specialists that are expected to provide legal support to host governments, sponsors and lenders.

 Templars is one of the foremost integrated full service commercial law firm in Nigeria with offices in the key commercial centres and are strategically placed to offer quality legal services  to clients across the country, while Cienna consulting is legal, divestiture and regulatory specialists with unique knowledge practice focus on the corporate, commercial, telecommunications and power sectors.

Four Nigerian airports will be handed over to private operators who will run them for at least 20 to 30 years, the Ministry has said.

Spokesman for the Ministry of Aviation, Dr. James Odaudu recently said,  “Infrastructure concessions of this nature come with a significant financial obligation which any responsible concessionaire will no doubt be keen to recoup,” it said.

“To this end, we envisage a minimum of 20) to 30 years for the programme, which may be extended depending on performance and Nigeria’s best interests. That said, the duration is not set in stone and will be subject to negotiation and then final approval by the Federal Executive Council.”

Despite having huge potential, the aviation ministry said these airports are currently operating at a sub-optimal level.