Stakeholders Frown on FAAN’s Poor Handling of Airport Concessions

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Chinedu Eze

Industry stakeholders have tackled the Federal Airports Authority of Nigeria (FAAN) over its handling of concessions at the airports, which always end in controversy, saying it discourages investment in the sector.

The industry insiders, who were reacting to the crisis that erupted on Monday at the Toll Gate of the Murtala Muhammed International Airport (MMIA), Lagos, when the concessionaire, Integrated Intelligence Imaging (I-CUBE) West Africa, which collects tolls on behalf of FAAN, was forcefully dislodged from the gate by the aviation labour unions.

Forced out, workers of I-CUBE fought the union officials and in the fracas disrupted movement of vehicles and other access gate users who were forced to wait or seek for alternative routes to their destination.

The chaos continued until security operatives, including police and Air Force took over the gate on Tuesday.

The stakeholders accused FAAN of signing, “untidy agreements” that end up in controversies and recalled the concession agreement between the agency and Bi-Courtney Aviation Services Limited (BASL), which built the domestic terminal at the Lagos airport, MMA2, noting that the concession has attracted numerous litigation and yet unresolved over 10 years after.

The Stakeholders also recalled the controversy that trailed the agreement between FAAN and Maevis Limited when the later secured approval to collect all the agencies revenues but was later forced out.

The stakeholders who also excoriated the role played by the labour unions, alleging that most of the concessions lack transparency and due process hence the disagreements.

Reacting to the I-CUBE imbroglio, the General Manager, Corporate Affairs, FAAN, Mrs. Henrietta Yakubu, in a statement, said, labour acted unilaterally in interrupting the activities of the concessionaires, acknowledging that the concession agreement I-CUBE had with FAAN expired last year and noted that the management of the agency and the company were working to resolve the problem.

However, industry consultant, Amos Akpan told THISDAY that FAAN was supposed to have reviewed the situation before it enters into agreement to concession any of its business.

“FAAN should establish the current value of that business unit, use empirical evidence to support figures, ensure that current and existing data are used to determine income and expenses.

“FAAN should also prorate the income and expenses from that business covering the duration of the concession and then agree on the sharing formula of the proceeds from the concessionaire.

“The unions will be signatory to the agreement. FAAN should also make clear in the agreement penalties for default. Simplify the procedure to enforce the penalty for default. It should also state the period to review the agreement, state timelines and who must be involved in the review,” Akpan said.
He also noted, “Airports are viable commercial cities in the world of today. Constant fight with concessionaires discourages potential investors. There is something they are not telling us, otherwise they don’t need to fight on a simple economic matter like that toll gate.”

THISDAY, however, learnt that most of the concession agreement FAAN signed with enterprises were midwifed from the Ministry of Aviation and that the agency most times have little or no input in most of the pacts.

One of the stakeholders, Adam Nuhu, noted that many investments have been “rubbished” with same templates by FAAN and the unions and described the unions as the “military wing” of the cabal in the system.

However, former Secretary of the National Union of Air Transport Employees (NUATE), Olayinka Abioye explained that, “The unions have rights to protect their members’ jobs, promote their well-being and so forth, but the challenge we have encountered over the years had to do with insincerity of management (of FAAN).

“From one side of the mouth, you are told that staff welfare cannot be adequately addressed because of paucity of funds arising from the failure, reluctance or issues from their concessionaire partners. Unions, as partners would wish to help management as much as possible so that the system does not collapse but along the line, something goes wrong and unions are blamed. Why so?”

The stakeholders insisted that FAAN must be transparent with its concessions in order to attract more investment in the aviation sector, which the federal government has been clamouring for over the years.