Uncertainty Trails China’s $500m Airport Projects

Uncertainty has continued to trail the status of the $500 million airport terminals that are under construction in four major airports across the country.

The doubts are fueled by insinuations that the four terminals expected to be commissioned early next year had already been concessioned to Chinese firms.

This arrangement could pose a huge hindrance to the plan by government to start a fresh round of concession of the four airports that are expected to be commissioned early next year.

 

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A former Director General of Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren, told wolshadarenews that the new concession policy, which government is pursuing, could hit the rock unless government makes concerted efforts to resolve the alleged concession to the Chinese firm that are said to be constructing the facilities.

He described it as “concession inside a concession,” an idea, he said, might not augur well for what government was trying to go ahead with.

Demuren warned that airport concession would not work in an atmosphere of political interference and absence of good corporate governance.

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Specifically, he said that he was worried about how government’s handling of previous concessions had resulted in litigations.

His words: “I am really worried about concession of the four major airports. Don’t get me wrong. It is the best way to go, but we must be clear about the concession to the Chinese who are building terminals in the four major airports. What happens to the concession? Are we going to have concession in a concession? This is not too clear and we need to be careful about what we are concessioning.”

But, a source in the Ministry of Transportation, who spoke on condition of anonymity, said he was not aware of concessioning the terminals to the Chinese as part of the deal for the loan. The source disclosed that the 20- year, 2.5 per cent interest loan for the project has a grace period of seven years before payment.

Nigeria and China had, four years ago, signed a $500 million loan pact for the construction of the four new international airport terminals in Abuja and three states.

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The other three locations for new the terminals are Lagos, Port Harcourt and Kano. Chinese construction giant, China Civil Engineering Construction Corporation (CCECC), which is handling the contracts, assured it would deliver the four new terminals in March 2015.

The project was expected to have been completed a year ago, but Nigeria’s default in paying her own counterpart funding had helped to delay the project. The loans reflect the deepening economic ties between oil-rich Nigeria and China, which already is involved in building major road and railway projects in the country.

However, similar deals with China have fallen apart amid corruption allegations, problems that persist today and could potentially put this new deal at risk as well.

Minister of State for Aviation,  Hadi Sirika, at a recent stakeholders’ forum where he unveiled the vision of the President Muhammadu Buhari-led Federal Government to transform the aviation sector, stirred the hornet’s nest about the planned concessioning of the four airports that are regarded as the viable airports in the country out of 22 airports that are managed by government.

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Sirika explained that the four airports would serve as the pilot phase of the airport concessioning stage while the remaining 18 airports would follow suit in the nearest future.

According to him, the concessioning is a deliberate policy towards bridging infrastructural deficit in the nation’s airports.

The minister, who gave a graphic picture of the extent of damage of Abuja Airport runway, showing cracks and ditches, assured that the infrastructural challenges in the nation’s aerodromes would be a thing of the past.

While some experts and stakeholders hailed the move as a bold step towards saving cost by government in the face of the current financial quagmire, others doubt the workability of the plan, arguing that Nigerian airports are not ripe for concessioning.

 

Wole Shadare