THE PLANNED CONCESSION OF TWO AIRPORTS

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The government should draw lessons from previous exercises

Last week, the federal government confirmed that it had given approval for the concessioning of the two busiest airports in the country: the Nnamdi Azikiwe International Airport, Abuja and the Murtala Muhammed International Airport, Lagos. At the same period, the Ministry of Transportation also unveiled its plans to actualise the Aviation Road Map, including the establishment of a national carrier, the concession of four major airports in the country, the establishment of maintenance, repair and overhaul (MRO) facility, the establishment of a leasing company and completion of some cargo airport terminals.
In deciding to concession these airports, the federal government has given teeth to the Public-Private Partnership (PPP) policy, which it said is the only way to effectively fund public infrastructure at a time government is experiencing dwindling resources. The argument is that it cannot meet the funding of such critical facilities in addition to providing other basic amenities. Government had insisted that it has become inevitable to partner with the private sector in order to actualise these set goals.

However, as lofty as the goals may seem, many aviation insiders and other Nigerians are apprehensive about government’s plan to concession the airports. The apprehension stems from the fact that such efforts in the past yielded controversial results. A good example is the domestic terminal of the Murtala Muhammed International Airport (MMA2), Lagos, concessioned to Bi-Courtney Aviation Services Limited (BASL) and which built an airport terminal adjudged the best in the country.

Several years later, the concession is still dogged by controversies and legal battles. The Federal Airports Authority of Nigeria (FAAN) argues that instead of 36 years, it only gave the concessionaire 12. Besides, the concessionaire also said that government acted against what was contained in the agreement to the effect that there would be no other domestic terminal in Lagos State. The concessionaire said the operation at the General Aviation Terminal (GAT) by FAAN, and hosting two major domestic airlines – Arik Air and Air Peace – was a breach of the agreement.

While that issue has remained unresolved, investigations revealed that most of the concession agreements in the country, in practically all the sectors, only provided a window for serving ministers and others in charge to financially empower themselves. There was often lack of transparency in the selection process, such that only cronies of government, at every particular period, won concessions.

Therefore, the apprehension about the credibility and transparency of the concession programme is well founded because there has not been any concession that was done in the industry, which was not trailed by controversy. Perhaps that might be why the concession of the Nnamdi Azikiwe International Airport, Abuja by the former President, Chief Olusegun Obasanjo was nullified by the succeeding government, while the controversy still rages on the concession of MMA2.

A major challenge with the proposed concession of Abuja and Lagos airports is that most operations at these airports have already been given out in concession. From the hospitality services, to carousel management and others, there are subsisting agreements, some lasting several years. Another problem that should worry FAAN and its staff is that these four airports that the government plans to concession are the source of over 80 per cent of the agency’s revenue. In fact, the 18 other airports in the country are sustained from the money generated by these airports. So why sell the only viable airports?

While we have no problem with a PPP arrangement for the two airports, we nonetheless hope the authorities are mindful of some of the misgivings being expressed by the public.