Brickbat over Airport Concession

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Chinedu Eze

While the federal government insists that Nigerian airport terminals must be given out to the private sector for development, labour and the concessionaire, Dr. Wale Babalakin have called for circumspection.

While labour has expressed fear that government would not protect the welfare of the workers, Babalakin insists that without the disposition to abide by agreement, government may not successfully concession the airport facilities.

In a recent webinar organised by the Aviation Round Table, a think-tank group in the industry, the Minister of Aviation, Senator Hadi Sirika clarified that the federal government never intended to concession the airports, but the airport terminals, just as it concessioned the domestic terminal of the Murtala Muhammed International Airport (MMIA), Lagos to Bi-Courtney Aviation Services Limited (BASL).

In a communiqué issued after the conference and signed by Olumide Ohunayo, the spokesman of the body, the stakeholders enjoined the Ministry of Aviation to ensure that the terminal concession process was transparently conducted in compliance with the extant laws and due process to avoid post-agreement controversies and rancor as previously experienced.

In addition, they asked the government to consider the totality of all the 22 airport terminals in its current concession plan.

The communiqué also stated, “The session acknowledged the necessity for government to concession airport terminals in order to reduce financial burden on the federal government for airports infrastructure development management.

“The concession of the terminals should not just be a departure from the status quo but with an objective to deliberately drive regional competitive hubs as well as mega carriers that will operate in those hubs.

“The session was informed of the recruitment of a strategic Communication Consultant who is expected to disseminate important information on the concession process for the benefit of all stakeholders. Therefore, the government should define and clarify what is to be concessioned within the airport.”

Ohunayo further stated in the communiqué that all existing legal, labour, and other complications arising from previous experiments (Nigeria Airways (WT), Nigerian Aviation Handling Company NAHCO, etc.) should be conclusively resolved.
He stated that there was a need for government to allay the fears of the unions and employees of FAAN with regards to the planned concession, adding that the process must be fair and transparent.

Minister of Aviation, Hadi Sirika at the session stressed that government realised that the airports remain, “national assets” and as such they cannot be sold.

Sirika said for the airports to develop in terms of infrastructure, they have to be given to private investors because government has no money to continue to pump into the airports.

The airports slated for concession according to the government include the Lagos, Abuja, Port Harcourt and Kano airports.
Sirika added: “In our wisdom, we feel that the assets (airports) belong to 200 million people and they cannot be sold. However, for it to be improved upon and for the good service to be delivered to people, certainly it has to be that it is given to private hands to improve upon it at a predetermined number of years.

“Concessioning is controversial. Doing it badly is worse than not doing it at all. Transparency is critical in ensuring the success,” Nick Fadugba, former Secretary General of African Airlines Association, and one of the panelists at the webinar said.

Fadugba, stressed the need for the concession to be done the right way, taking into cognisance what obtains in other parts of the world, noting that the federal government cannot continue to fund airport development.

“Concession is a logical way from my perspective but the big challenge is to do it transparently and do it well,” he said.

President of ART, Gbenga Olowo, said there should be a deliberate plan to make each of the airports to be concessioned a regional hub with each hub having a mega carrier with a minimum of 50 aircraft.

“In Miami, there is a mega player; in Atlanta, there is a mega player, in Chicago, the same thing. I recommend four mega carriers by 2025,” he said.

The CEO of Aglow Aviation, Tayo Ojuri, recently told THISDAY that concession is the only way to solve the infrastructural challenges facing Nigerian airports as government does not have business in managing airports; so what is key is the way forward and the transparency of the concession process.

Ojuri, however said the current efforts to concession the four major airports in the country need to have global competitiveness.

“So what is key is the way forward and transparency. The process has been wobbling from the beginning. The Transaction Adviser process lacks global competitiveness and this fact challenges the process.

“What is key is transparency but you don’t necessarily have to agree with all the stakeholders, but if the process is clear it will be a successful concession. Also, the legal outstanding issues need to be tackled.”