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Airport Concession: More Promises, Less Action

Nigerians are inundated with several plans by the federal government to concession the country’s airports and bring the private sector to invest in infrastructural development of airport facilities.

This has been a sing-song for years but at the end of the day nothing is being achieved and the status quo remains.

The former Minister of Aviation, Hadi Sirika, in his maiden address to aviation industry stakeholders in 2016, shortly after his appointment, stated that airport concession was part of his development agenda for the industry, but ended up with a feeble, ineffectual attempt that was opaque and suspicious, hence his effort was not taken seriously.

Sirika’s predecessor, Senator Stella Oduah, made it clear when she became the Minister of Aviation that she was not interested in airport concession; rather, she would develop the airport infrastructure because they were government and the people’s assets. She insisted that no one would be allowed to take them as their patrimony.

Oduah went on with the airport renewal programme, which witnessed the rehabilitation of airport facilities in various states. By the time she was withdrawn as the Minister of Aviation, some airport terminal had been completed, while some remained as on-going project. However, the international terminals, which she started in Kano, Abuja, Lagos, Port Harcourt and Enugu and funded by China EXIM Bank, were completed under the Buhari’s administration. They were funded and completed under Sirika.

But Sirika, who made his plan clear that he would concession the airport terminals, waited until the dusk of the Buhari’s administration before he carried out ‘emergency’ concession, which industry stakeholders insisted was not transparent and did not follow due process.

By March 2022, almost one year to leave office, the former Minister of Aviation was still shifting the date for the concession of airport facilities. He promised that the airport concession would take place in the second quarter of 2022.

In his usual trite promises, Sirika said: “The transaction advisers for the concession have finished the Outline Business Case and had got the Request-for-Qualification. We’ve pre-qualified the people and they’ve been issued Request-for-Proposal.

“They’ve turned the proposals in and we are analysing them to announce the successful bidders and this will be soon. Our timetable is for the first quarter of this year (2022).Well, I can see that it is still happening, let’s be very ambitious, but certainly it will end in second quarter and all the dentified airports will be concessioned.”

After the non-transparent attempt to concession the airports, industry critics said Sirika may not have genuine plan to concession the airports, but made attempts to covet government assets to himself and his cronies, an allegation that the Minister vehemently denied.

But recently the current Minister of Aviation and Aerospace Development, Festus Keyamo, reiterated the need to concession the airports, saying, that is the only way the airport infrastructure can be expanded and modernised.

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He acknowledged that public-private partnerships (PPP) are crucial in the sustainability and modernization of airport infrastructure.

“It is only by way of PPPs we can progress along that line, we can turn things around. So for those who complain that our infrastructure is decrepit, the airports are not as good as they should be, they don’t meet international standards, I’ve just been eight months in office; there’s nobody who can build big infrastructure within even two years or three years; and that’s a fact. What you can do is to maintain what you have, make them a bit comfortable and serviceable and customer friendly while you work on the big issues,” Keyamu said.

According to him, “We are looking at bringing in the private sector, which we have started doing already with the collaboration of the Minister of Interior, we both collaborated on that, we have changed the arrival wing, the D-wing of the International Airport(Lagos).  Shell came in and did a lot for us there, I’m sure you have seen it. That’s a beautiful entrance now into Nigeria. The wing E, that’s the arrival, we are concentrating on D and E and we are talking to one or two people now, corporate bodies, they are just about to start their own but Shell has done their own for us.”

But aviation unions have always kicked against concession of airport facilities, saying that the workers would lose their jobs; even when the former Minister assured them that no job would be lost. Sirika had gone further to explain to them that if the airport facilities were expanded and modernised, in the long run, the airports would need more workers, even if some workers in the Federal Airports Authority of Nigeria (FAAN) lost their jobs in the interim.

While resisting the concession plans, the Secretary General of the National Union of Air Transport Employees (NUATE), Ocheme Abba, alleged that it was not only that the federal government was not following any due process, but it was not even concessioning the airport to genuine investors. He insisted that top government officials were giving the airports to themselves.

Abba also said that there was no protection of workers’ interest in the concession plan and reiterated that labour and workers do not support the concession plan.

Abba said the concession programme was done in a way to cripple and finally destroy FAAN and explained that already the federal government owed China about $1 billion as the cost of the four new terminals built at the aforementioned airports, which would be paid by FAAN. He added that money accruable to the agency would be used for debt servicing, maintenance of other 18 airports and other expenses leaving nothing for FAAN to survive on.

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”The new Chinese terminals are going to be concessioned where the concessionaire will receive 60 per cent of the sharing formula while FAAN will retain 40 per cent and what will happen to the 40 per cent that FAAN will retain? From that 40 per cent, FAAN will pay the Chinese loan; FAAN will return 25 per cent to the federal government, according to the Fiscal Responsibility Act. Also from that 40 per cent FAAN will maintain the other 18 airports, including all of you who are workers of FAAN. So the whole programme about concession is that some people want to give this thing to themselves, and that is why they went and got Transaction Adviser who did not go through any process of selection,” Abba told the workers in a rally when they were protesting against concession during Buhari’s administration.

What the Minister of Aviation and Aeronautical Development said recently, reinforces the fact that for the airports to be modernised to meet the standard of major airports in the world, the private sector must be involved. Many stakeholders and Nigerian airline operators had at different for a, indicated their support for concession of airports facilities, but they always stress that the process must be transparent and real investors vast in airport development must be involved, so that it will not be like the privatisation that took place in the electricity industry where inexperienced investors were given regions to manage and they evolved into inefficient monopolies.

The Managing Director of Flight and Logistics Solutions Limited, Amos Akpan, told THISDAY that previous governments lacked political will to demonstrate clarity of purpose, openness, accountability, and timeframe to start and end on this project of concessioning the airports.

“They have to determine the following and put it out for all stakeholders to understand and participate. What portions of the airport they will concession out? Which of the airports should be conceeded? What would constitute the terms and conditions in the concession agreement? What are the expected outcomes from the concessions? Concession of airports exists and are still ongoing all over the world. So there exists, standards and recommended practices on airport concessions. The government will do it if they really want it done in the interest of growing the industry,” Akpan said.

So, for the current Minister to succeed in the concession process, he must be transparent and should ensure that reputable organisations with wealth of experience in managing airports in other countries are involved in the bidding process that would lead to selecting the best for the industry.

Source: Tthisday

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