Solving Airport Concession Conundrum

 

 

It is a glaring fact that Nigerian airports are not just underdeveloped but also grossly underutilised. Concession has been mooted but the unions are up in arms with government as the way out of the imbroglio remains unclear. WOLE SHADARE writes

Cat and mouse game

The story of tenants not seeing eye to eye with landlords is one that endures the test of time. Tenants often find fault with their landlords in upholding their rented property’s expectations, whilst landlords feel they do their best to provide what they deem as meeting the bar.

This, best encapsulate the age long controversy between the Federal Airports Authority of Nigeria (FAAN) and its numerous concessionaires.

This has also opened a fresh controversy trailing the planned concession of four airports that have reached advanced stages of handling by the private sector. Aviation unions, workers and other ‘concerned’ stakeholders last week took the Minister of Aviation, Hadi Sirika, to task over the manner the Federal Government is mid-wifing the concession of the four major airports across the country.

This is not the first time that there would be cacophony of voices against planned concession of the four major airports of Lagos, Abuja, Port-Harcourt and Kano. Each time the matter comes up, the aviation agencies, particularly the Federal Airports Authority of Nigeria (FAAN), have variously been accused of using their militant arm, the unions, to call for the cancellation of the process.

The unions, cannot be faulted for raising their voices against concessions going by the many unpalatable experiences in the sector.

 

Unions oppose action

The unions, made up of National Union of Air Transport Employees (NUATE), Air Transport Services Senior Staff Association of Nigeria (ATSSSAN), Association of Nigeria Aviation Professionals (ANAP) and Nigeria Union of Pensioners (NUP), FAAN branch, in a joint press briefing last week, said they would ensure the grounding of activities in the sector should government go ahead  with the planned concession of Lagos, Abuja, Kano and Port- Harcourt airports.

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They also threatened to resist attempt by the Federal Government to concession four of the aerodromes in Nigeria, describing the procedure for concession as not transparent. Ocheme Aba, Secretary General, National Union of Air Transport Employees (NUATE), alleged that while the Project Delivery Team (PDT), which includes the ICRC was still discussing the issue of Transaction Adviser (TA), the minister was on air announcing the approval of FEC of a TA and his fees.

Both the TA and the fees, he reiterated, were apparently decided solely by the Minister, stressing that up till date, the PDT has not been allowed to take a position on the matter.

He highlighted that at the last meeting of the PDT in late 2019, it was decided that the concession issue be degraded to the bottom of the list of aviation priority projects while upgrading the national carrier, aviation leasing company and the aircraft Maintenance Repair Overhaul (MRO) for quick delivery.

No doubt, concession of airports and other businesses have been mired in serious controversies. Bi-Courtney Aviation Services Limited, concessionaire of MMA2 particularly on the duration of agreement is one that different parties are disputing.

While BASL claimed it has 32 years concession, FAAN claims it is between 12 and 15 years; thereby, muddling the whole concession agreement.

Aba said everything so far about the issue of concession for the four airports had been single handedly decided by the minister, ICRC. He accused them of not carrying out any due diligence on the concession exercise.

 

 

Minister gets ICRC backing

Sirika had penultimate week brandished the certificate of compliance issued him by the ICRC, which confirmed that the minister had complied with all needed requirements to proceed with the process of concession for the four international airports.

With all clear, the minister is expected to proceed to seek the approval of the Federal Executive Council (FEC) for his proposed Outline Business Case (OBC) for the project. FAAN’s many battles FAAN is embroiled in so many cases in court concerning Sanderton’s abrupt contract termination. Maevis is equally in court for the way FAAN terminated its contract.

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All these have put the unions on the edge because of suspicion that the planned concession of four aerodromes could also go the way of others. There are people who get confused and do not know exactly what concession is all about. They have mistaken concession for privatisation.

When it is privatised, the original owner gives up ownership, when it is concession, ownership is retained but management and development is given out for a period.

Government owns all the airports but if it says it is going to concession the airport for the next 25 years, then, government should lay out its terms and conditions by the time they are returning this airport to government. But if it is privatised government can no longer determine for the person who owns it how to go.

FAAN has been in the business of airport management and operation since 1976 initially as NAA (Nigerian Airports Authority). It has, therefore, gathered valuable experience over the past 40 years but has not demonstrated enough capacity to transform the nation’s airports.

 Decrepit airport facilities

The precarious state of the country’s airports, particularly the Murtala Muhammed Airport  Lagos has encouraged many to support government’s plans for concession.

The ugly situation travelers face at the Lagos airport call to question how FAAN and by extension the Federal Government allowed facilities to degenerate almost beyond redemption. Despite hue and cry, MMA2 is still the best run airport terminal in Nigeria. If MMA2 is used as the yardstick for measuring efficiency, it means that things have gone irretrievably bad for aviation infrastructure development in the country.

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There is a need to modernise and upgrade infrastructure and equipment such as terminal buildings, control towers, conveyor belts, instrument landing systems, communication equipment, runway lighting, fire tenders, amongst others.

The provision of infrastructure under the airport remodeling project was a sham; one that left many wondering why the over N100b spent did not achieve what it was set to achieve.

A few years after the airport remodeling project was conceived, facilities built then collapsed less than two years after they were hurriedly built. Airlines have continued to record incessant flight delays and cancellations as they are not able to meet demand. The situation is worsened by infrastructure gaps.

 Expert’s view

Speaking on the development, the Chief Executive Officer of Aglow Limited, Tayo Ojuri, lamented that passengers spent unduly long time at security screening points because of insufficient number of X-ray machines. He stated that they are forced to queue at security screening points, especially at peak hours.

Ojuri noted that in other climes, it takes between 30 seconds to two minutes to get screened, but in Nigerian airports, it takes over five to 15 minutes to get screened depending on the number of passengers waiting to be checked. In a bid to close these infrastructure gaps across the airports, experts have suggested concession of the country’s airport.

Last line

For the new concession plans to sail through, the limit of the powers of concessionaires should be clearly defined. Government/investor satisfaction, trust and confidence should be mutually guaranteed.

Besides, the fears or suspicions of all stakeholders, including FAAN’s hierarchy and workers likely to be affected one way or the other by the new ownership arrangement, need to be sincerely addressed.

 

Wole Shadare