Concession as Panacea to Airport Infrastructure Problem

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Despite stiff opposition, especially by aviation unions, if well-managed, concession could be the remedy for Nigeria’s airport infrastructure challenges, writes Chinedu Eze

Occasionally, Airport Council International (ACI) tends to support government and its agencies owning airports and related facilities. There was a time ACI argued that privatising airports could cost an air traveller more because when airports are built by the private sector, it is profit driven and whatever cost is paid finally goes to the travellers.

Then airport facilities were seen as utilities, which governments ought to provide for its citizens, but the world has moved away from that. Airports are business concerns because it has become evident that governments cannot effectively manage huge businesses and it is now left for the private sector, just as national carriers, which used to be 100 percent owned by government are being ceded to the private sector, except on few cases.

In Nigeria, it has become obvious that government cannot continue to be saddled with the responsibility of managing airports. Over the years, the government has been in charge of airports and the then Nigeria Airways Limited (NAL), when evaluated it was obvious that little success was recorded during the period; until private entrepreneurs began to floats airlines and ignited competition. If the workers did not stand against the privatisation of NAL, perhaps the airline could have been flying today. The action of aviation workers in the case of NAL seems to be repeating itself today in the present quest by the federal government to concession Nigeria’s major airports.

Oil industry observers also argue that if the country’s oil refineries were privatised some years ago they would have been operating today. But oil and gas workers had opposed the privatisation then and still oppose it till date. What this means is that workers’ narrow interests seem to eclipse the larger interest of the society. Workers only think of their interests and use unions to enforce their position, even when privatisation could benefit the whole country in the long run.

Poor Airport Infrastructure

Unarguably, the best airport terminal today in Nigeria is the domestic terminal of the Murtala Muhammed International Airport, Lagos, known as MMA2. The facility was built by Bi-Courtney Aviation Services Limited (BASL) under the Build, Operate and Transfer (BOT) agreement with the federal government through the Federal Airports Authority of Nigeria (FAAN).

That airport terminal is a good example of what the private sector could do in the provision of airport facilities, despite the controversy that surrounds that agreement between FAAN and BASL. What it means is that if there is sincerity on the part of government and transparency in the concession process, Nigerians could have more modern airports with sophisticated facilities as obtained all over the world. What is standing between Nigerians and good airport infrastructure is engaging the private sector to put their money in airport development.

Today, airlines lament that they operate their aircraft maximum of seven hours a day for aircraft that could operate for 24 hours with a minimum recommendation of 11.5 hours a day. The reason for this is that many Nigerian airports do not have airfield lighting. So airlines cannot operate to these airports beyond 6:00 pm. The implication is that airlines lose money because they only operate daylight services to almost all the airports, except the airports in Lagos, Port Harcourt, Abuja and Kano. If there is airfield lighting in all the airports, airlines could operate to Owerri, Calabar, Enugu, Yola, Markurdi and all other airports till late in the night. This would enable them flog their aircraft enough to meet the minimum recommended hours of flight for their equipment.

Nigerian government and all other governments in Africa and beyond are stretching their resources to provide essentials like hospitals, water, housing etc. for the citizens, but the private sector could help to build roads and airport facilities and that is why many governments have realised that they have to bring the private sector in to support the development of infrastructure for the citizenry.

Few years ago government planned to build second runway at the Nnamdi Azikiwe International Airport, Abuja. This plan was knocked off over argument about the high cost of the project. Today the lone runway at the airport has passed its expiring date. What one witnesses is numerous patchworks at various parts of the runway and pilots complain about its unevenness and cracks, which recently destroyed South Africa Airways aircraft.

Government’s lean resources cannot be summoned to fund these projects and if these airports are left as they are today, degenerating on everyday use, they could breach safety in airline operation. Not only that; for Nigeria to realise its full potential as a major air transport nation, where over 20 million people travel annually, the country cannot continue to wallow in the past with obsolete airport infrastructure; it ought to upgrade to modern airport facilities and there are willing investors to make this happen.

Workers Opposition

Workers of the Federal Airports Authority of Nigeria (FAAN) under the auspices of the Air Transport Service Senior Staff Association (ATSSSAN) and the National Union of Air Transport Employees (NUATE) have rejected the plan by the federal government to concession the airports.

The General Secretary of NUATE, Mr. Olayinka Abioye had accused government of not putting the interest of the workers into consideration and threatened that the workers would resist the plan to concession the airports, recalling that when the defunct Nigeria Airways was liquidated, workers were left to die without their pay off or their pensions which rose to over N72 billion.

Abioye said: “What we need to recognise first of all is the fact that government particularly in the last 10 years, has been shifting its core responsibilities and this may be due to globalisation and neo-liberalism and it wanted to engage in what is called Public, Private Partnership (PPP). There is nothing wrong with that if it is done with honesty and it is also purpose driven. Unfortunately we do not believe, particularly with what we are seeing that Nigeria is ripe for concession and privatisation of public utilities,” he said.

Abioye noted that the major reason why workers are opposed to the plan besides lack of consideration for the interest of the workers was that all efforts in the past to concession airport facilities failed due to lack of objectivity or transparency and the few that could be described as successful were skewed in favour of the investors and against the interest of government which represent the public interest.

“We have very bad examples to give. And one of the few successes of such arrangement is Bi-Courtney Aviation Services Limited (BASL) take over and building of the domestic terminal at the Murtala Muhammed International Airport (MMA2), Lagos. Bi-Courtney also has its own problems that we have been battling since the last 10 years or so. We observed that some of these concession arrangements are written in such a manner that at the end of the day it is skewed in favour of the investor against the interest of the Nigerian government and the people. That is our worry,” Abioye said.

Decision to Concession

Government said it does not have the resources to continue to fund airport infrastructure development; therefore it has to invite the private sector to inject money into airport facilities so that they could be upgraded to modern airports.

Government seem to be considering ceding the airports terminals and runway to concessionaires so that any company that wins the concession of, for example, Lagos airport international terminal would also ensure that the airside of the airport has modern facilities, including airfield lights and other necessary materials that would enhance safe flight operation.

The Minister of State for Aviation, Senator Hadi Sirika in a recent interaction with the journalists in Lagos, said, “So we must be able to develop these airports, but then we don’t have the money to do so. Government no longer has money to put into these public properties. And as social democrats we are not also willing to sell or privatise these entities, we will not, we want to retain them. We are jealous of the facilities so we don’t want to let them go. So the only option we have is to concession the airports.

“And the way I put it in the simplest form is you having your house, a bungalow of three rooms and one boys’ quarter sitting on a 7, 000 square meters in Ikoyi, Lagos. We used to have them. And somebody walks up to you and says he is going to be paying you N300, 000 a month for you to give it to him, promising to construct a 14-storey building, 28 flats and also build a small room for you and your wife where you will be staying and that every month he will be giving you some change in your pocket and that after 20 years all those flats will be yours.

“I don’t see anybody that will reject that. That is concessioning your land. I have a personal experience, my very close friend, late Yinka Adetona had a small parcel of land and somebody offered to put up 14-storey, 28 flats and I asked him if this is a good idea for 25 years that it is too long. Now just before he died, the 25 years got to an end, he collected his property and took a vacation for two weeks to go and think of what to do with his property first,” Sirika said.

Airline Operators

Airline operators also support the concession plan because they are at the receiving end of inadequate and obsolete facilities. They believe that if there are modern facilities, if they have capacity at the ramp and if all the airports have the necessary landing aids, including runway lighting their operation would be smoother and could have profitable operations.

The Managing Director of Medview Airline, Alhaji Muneer Bankole told THISDAY that the concession was long overdue, noting that it is what is happening in other parts of the world, adding that Gatwick Airport was ceded to a Nigerian who is managing it today and the Heathrow Airport, London is managed by a Spanish company, Ferrovial.

Indications show that workers may not have supporters in their opposition to the concession of airport facilities because bringing in the private sector to fund airport infrastructure is a system that has become the vogue; in that way government regulate airline operation and management of the airports while the system enjoys private sector funding.