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Between FAAN and Maevis

04 Apr 2012

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It was one concession agreement steeped in controversy and undone by its own contractions. Barely five years into the 10-year pact with Maevis Ltd, the Federal Airports Authority of Nigeria (FAAN), last week, forcefully terminated the contract. From all the available information, it was a contract FAAN entered into with its eyes shut as the arrangement betrayed its interests. While we wonder why it lasted this long for it to unravel, we nonetheless do not believe that two wrongs approximate to a right.

The immediate fallout of the disagreement was visible mostly at the Murtala Muhammad Airport, Lagos, early last week in the chaos that pervaded the check-in counters.

It was responsible for the long queues amid sweltering heat that international travelers departing or arriving the country were subjected to in the absence of automated airport services hitherto provided by Maevis.

The slow manual check-in process, the poor lighting at the airport and carousel that broke down at will--all ensured that travellers spent harrowing times at the airport. While the chaos lasted, touts had a field day as desperate passengers resorted to asking for assistance from those who claimed to be staff of FAAN. Many regretted patronizing them as some reportedly vanished with their money and even worse, passports. It was a week of national embarrassment.

The story started in 2007 when FAAN contracted Maevis Ltd to provide an integrated automated airport operations management system through the use of Common User Service System and Flight Information Display System. The contract was designed as a proactive revenue management and an electronic payment gateway system for the country’s four international airports in the sum of N4billion. The agreement, initially for a period of10 years in the first instance, was renewable every five years subject to “satisfactory performance and on terms and conditions to be agreed upon by the parties at the time.” FAAN’s list of worries with the contract is long. First it accused Maevis of arbitrarily increasing the cost of the contract from N4 billion to N7 billion

without putting across to FAAN the cost of variation. It alleged further still that Maevis, instead of paying all collected revenues into a designated account as agreed, paid all monies into a “platform accounts” which is not accessible to FAAN, thus raising suspicions. Complicating things further, FAAN claimed it had no way of knowing the basis upon which the amount paid into its accounts was arrived at.

Aside the foregoing, Maevis reportedly determined its commission which it deducted at source before remitting the balance to FAAN. With Maevis reportedly declining to renegotiate the terms, FAAN issued a letter terminating the agreement in March 2011, giving two months notice which was enforced last week by armed security men who broke into Maevis office in Lagos and Abuja. The managing director of FAAN, Mr. George Uriesi, said the “enforcement” of the agreement was in “line with the turnaround strategy of the authority to restore it to a state of normalcy.”

What one can see from the whole controversy is the usual problems associated with government contracts that are always entered into in manners that are detrimental to public interest. It is, however, noteworthy that a Federal High Court had earlier ordered FAAN to desist from interfering with the implementation of the agreement until the dispute was resolved by arbitration. So the pertinent questions:

Why is FAAN afraid of arbitration? Given that every contract has terms of its termination, what did the termination terms of this contract say? Did it authorise FAAN to break into the offices of Maevis in case of perceived failures? While we believe FAAN has solid claims for severing relations with Maevis on grounds of non-performance, lack of transparency and for serially breaching the agreement, we are nonetheless worried that a government agency could act with such impunity. Notwithstanding the problems, FAAN ought to have subjected its claims to arbitration. So to that extent, we consider the forceful ejection of Maevis a flagrant act of impunity.

Tags: Editorial, Featured, Maevis Concession

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