Concession: Why FAAN Cannot Manage 17 Airports

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Chinedu Eze

Stakeholders in the aviation sector have expressed doubt about the ability of Federal Airports Authority of Nigeria (FAAN) to manage 17 airports if the four
major ones were given out in concession as planned.

THISDAY learnt that only the four major airports in Lagos, Abuja, Kano and Port Harcourt are generating the revenues that are being used to maintain the remaining 17 airports.

In 2015, Nigeria’s four major airports – Murtala Muhammed International (MMIA), Lagos, the Aminu Kano International Airport, Kano, the Nnamdi Azikiwe International Airport, Abuja and the Port Harcourt International Airport generated over N32billion and the money expended on their maintenance was put at over N14 billion.

During the said period, the other 17 airports also under the management of the FAAN, generated over N1.4billion but over N6billion was said to have been used to maintain them.
What this meant was that FAAN had to plough part of the revenues earned from the four major airports to maintain the other 17 airports.

With the federal government’s move to concession the four major airports which are the bedrock of the agency’s revenues, it is feared that FAAN may not be able to generate money to maintain these airports.

According to sources, among the 17 airports the Akanu Ibiam International Airport, Enugu generated the highest revenue of N457,725, 797. 86; followed by Margret Ekpo International Airport, Calabar, which generated N162, 887,530.00. “So all these airports on their own, cannot generate enough money to sustain maintenance of the facilities, pay for power and other overheads and also pay the workers”, a source posited.

It was gathered that although many industry observers supported the government’s plan to concession the airports, some have suggested that government should not start the programme with the concession of the most viable airports; rather, it should pair the airports and concession them together, after securing legislation on legal and administrative frameworks that would define the process of concession, so that government and the Nigerian public would not be shortchanged as it was done in the past.

Officials of FAAN informed THISDAY Wednesday that government if plan was implemented, it would further impact the remaining airports.
They reasoned that alternatively, government can concession the other 17 airports simultaneously and then decide what it would do with FAAN, which its over 2000 workers.

Speaking in Lagos on Tuesday, the Minister of State for Aviation, Senator Hadi Sirika insisted on the concession of the four major airports in addition to six cargo terminals as incentive to the export of farm produce and others, as the country has continued to record increase in the products it exports to Europe, US and other parts of the world.
According to the document THISDAY obtained from informed source, there has been progressive improvement in the revenues generated by the four major airports.

In 2013, the total revenues was N27, 776, 130, 267. 64; in 2014 the airports generated N28, 401, 470, 169, 51 and in 2015 they generated N32, 106, 889, 099. 29.

The aviation labour unions in opposing the planned concession, had argued that Nigeria and the public were shortchanged in the concession programmes carried out in the aviation industry in the past.
But Sirika said the only way to halt the present infrastructural decay and transform airport facilities and passenger experience, the country has to concession and bring in the private investors with their funds to rejuvenate the airports.

“We no longer have money to put in public property but we will not sell or privatise our airports as social democrats; all we can do is to concession them so as to grow them. And that, we will do. You see, government has no plans whatsoever to sell national assets but it was sheer misconception to see the unions on the street demonstrating what they thought was sales of the airport. The airports will be concessioned, the big four and then later six of the cargo designated airports and this will help us not just grow and expand the sector but put us in the right path to again be established as a hub,” the Minister said.