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Solace in private sector to close aviation infrastructure deficit gap

Nigeria’s aviation sector is no doubt one of the sectors going through a myriad of problems including infrastructural challenge that requires trillions of Naira to upgrade, WOLE SHADARE writes
Infrastructure deficit
Just last, aviation stakeholders gathered in Lagos to chart a fresh path for the aviation industry, particularly as it concerns the provision of infrastructure to the sector.
The aviation/airport infrastructure deficit runs into over N2 trillion. There are indications that the Federal Government does not have the funds to provide all of the needs of the sector as there are other competing demands for the lean resources available to the government.
The African Development Bank in 2019 said Nigeria would require more than N1.5 trillion to fix the airport infrastructure gap.
Poor infrastructure also contributed to the challenges faced in night flight operations in Nigeria’s airports.
Any airport planning to operate beyond dusk requires a large financial outlay and compliance with important conditions for the safe landing and take-off of aircraft.
Competing needs
Some of the competing areas that need government funding are health, roads, education and agriculture among others. So, the government has to think out of the box to look for alternative funding for infrastructure decay at many of the country’s airports, particularly those in Lagos and Abuja.
At the South West Regional Air Transport Summit (SWRATS), organised by the Nigeria Civil Aviation Authority (NCAA) at the weekend, Minister of Aviation and Aerospace Development, Mr Festus Keyamo and other industry experts canvassed innovating funding models, including concession, joint ventures, and setting of a development fund to drive the sustainability of the strategic sector.
He said for the sector to improve there, is an urgent need to enhance capacity through a strategic partnership of private sector players.
Keyamo stated that there is a need to review the funding models to pave the way for concession, joint ventures and other interventions that will boost private sector investment.
Far from perfect
While the government can be applauded for the little it is doing in terms of infrastructure, the nation’s aerodromes are still far from what it should be. Enormous resources have replaced some safety-critical facilities; Nigeria is not yet there in terms of adequate airport facilities.
For airspace architectural infrastructure, the Nigerian Airspace Management Agency (NAMA) has over the years done so well with airspace infrastructure. However, what the agency has done is like scratching the surface as it is tied down by funds to take airspace surveillance to the next level.
Despite the government’s funding of Total Radar Coverage of Nigeria (TRACON) project, and the acquisition of mobile radar and Surface Movement Radar (SMR), the lack of funds has seriously posed a huge challenge to the agencies, especially FAAN and NAMA.
The agencies’ Internally Generated Revenue (IGR) is so small that the agencies are left with nothing after payment of salaries. The cut of all the aviation agencies’ revenue by a whopping 50% has put the sector in serious financial dire straits and threatened safety despite the impeccable safety record of the industry in so many years.
Innovation
One airport terminal that is continuously innovating itself is the Murtala Muhammed Airport 2 (MMA2) with modern facilities, and state-of-the-art infrastructure to meet the demands of modern air travel.
Yes, one can excuse FAAN for the enormous burden of taking charge or care of over 28 aerodromes, most of them built by state governors and handed over to FAAN as part of national security infrastructure needs, but the country needs at least two world-class airports that can make air travel very seamless for travellers.
Kuku’s vision
Stakeholders have commended the Managing Director of FAAN, Mrs Olubunmi Kuku for working hard to improve age long decay that her administration inherited.
She is however faced with the challenge of allowing the government to urgently see the need for policy action on some of the nation’s airports by either concessioning them or seeking better advice on how to improve facilities at the airports.
Since the appointment of Kuku, she has been striving to make Nigeria’s airports more passenger-friendly and more technology-driven. She has established herself as a passionate advocate for the sector.
To ensure the sustainability of Nigeria’s airports, stakeholders advocated for greater collaboration between the private sector and sub-national entities. The public-private partnerships could be the key to unlocking the potential of underutilized airports and the provision of modern infrastructure across the country.
Faced with a huge infrastructure deficit, Keyamo had shown the direction the government wants to go in line with his five-point agenda which has a space for public-private partnership and concession. It dawned on the government that it needed the help of the private sector which is looking for where to invest, thereby taking the financial burden off the government.
PPP model
Public-Private Partnership (PPP) is a funding model for public infrastructure projects and initiatives such as new airport terminals, new airports, concessions, and other initiatives that would fall majorly into private hands because of the huge funds required for the facilities.
Government agencies represent the public partner at a local, state, and/or national level. The private partner can be a privately owned business, public corporation, or consortium of companies with a specific area of expertise.
PPP is a broad term that can be applied to anything from a simple, short-term management contract — with or without private investment requirements — to a long-term contract that includes funding, planning, building, operation, maintenance, and divestiture.
PPP projects (also known as P3 projects) are helpful for large ventures that require the procurement of highly skilled workers and a significant cash outlay to get started.
They are also helpful in many countries of the world including Nigeria countries; that require the state to legally own any infrastructure that serves the public.
Not a few agree that with the way things are in the aviation sector particularly as it affects infrastructure, the only solution rests on PPP.
Experts’ views
Not a few analysts tackled the sensitive yet largely misunderstood issue of concessions, a hotly debated topic in the sector. Concessions involve private-sector management of public assets, and in Nigeria’s case, it has been a point of contention.
Even the FAAN MD acknowledged stakeholders concerns, particularly fears that private entities could prioritize profits over public interest.
However, she underscored the necessity of private-sector involvement, given the sheer scale of investment required to sustain the aviation sector.
Concession is not a one-size-fits-all solution but rather one of many options that can be explored.
An expert who pleaded anonymity said, “The fears about concessions are valid. The investment needed to sustain the aviation sector in Nigeria cannot come from the government alone. It’s impossible.
“What I call for is for us together to explore the private-sector models that work and put in place legal frameworks that allow those models to benefit FAAN, while also protecting the sector.”
Successful examples of concession models globally, particularly in the United Arab Emirates (UAE), where management contracts have brought in technical expertise and enabled airport expansion.
Many also advocated for joint ventures and public-private partnerships. These could be tailored to the specific needs of Nigerian airports.
Last line
For any government seeking to expand infrastructure, the public-private partnership offers an option that lies somewhere between public procurement and privatization, as it brings private sector competencies, efficiencies, and capital to improving public assets or services when governments lack the upfront cash.
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