Issues as FG concessions Lagos, Abuja, Kano, Port Harcourt airports

Knocks and kudos have trailed the proposed concession of four major international airports by the Federal Government as stakeholders await the process amidst government’s resolve to carry on with the process, Daily Trust on Sunday reports.

When the Federal Government, penultimate week, approved the concession of two major airports in the country: the Murtala Mohammed International Airport (MMIA), Lagos, and the Nnamdi Azikiwe International Airport (NAIA), Abuja, the backlash that trailed the announcement was predictable.

Concession of airports is one of the programmes highlighted in the aviation development master plan unfolded by the Minister of State for Aviation, Senator Hadi Sirika, with four major airports in the country, including the Malam Aminu Kano International Airport (MAKIA) and Port Harcourt International Airport (PHIA). 

These are the four major airports which the minister announced would be given to private concerns beginning with Lagos and Abuja. the Enugu International Airport is considered another major airport which records appreciable traffic among 17 other airports owned by the Federal Government.

There are 22 airports managed by the Federal Airports Authority of Nigeria (FAAN), but most of the airports, except the big four, are only international by name, with little or no traffic to show. The Kaduna International Airport is, however, being developed to meet up with the standards of an international airport as it recently received traffic diversion from the Abuja airport following the closure of the airport for repair of the runway, just as Ethiopian Airlines also launched international flights from the state.

Lagos, Abuja, Kano and Port Harcourt are the four major airports which the minister said would be concessioned at the outset of the administration. The announcement though did not provide the details of the proposed concession, generated a backlash; especially from labour unions which vowed to resist the concession with all the powers they have.

However, the government is not deterred by the potpourri of opposition as it is going ahead with the concession which the Federal Executive Council approved last week.

The Vice President, Prof. Yemi Osinbajo, speaking at the fifth edition of the Presidential Quarterly Business Forum held at the State House, Abuja, announced the concession of the airports, saying the development would open them to private investment.

The aviation minister, who briefed newsmen at the end of the Federal Executive Council (FEC) meeting on Wednesday, disclosed that government had also approved the concession of Kano and Port Harcourt airports, further saying government had already approved the appointment of transaction advisers for the process and assured that the process would be transparent. 

The minister said, “Public Private Partnership and concession of the airports had never been done in a structured and transparent manner.”

He added that, “The contracts were not properly prepared, no risk analysis and no financial models. Consequently, it is not surprising that they ended in litigation. I want to assure stakeholders that we will be transparent and the concession is in the best interest of the country.

“We will ensure that Nigerians are given priority in getting jobs in the aviation sector. We will give adequate time for airlines to prepare themselves, but for sure, we will ensure that it happens soonest.”

The minister further disclosed that he had already inaugurated two committees: Project Steering Committee and Project Delivery Committee, for the concession process. 

The only successful experimentation with concession was that of the Murtala Mohammed Airport, Terminal 2, operated by Bi-Courtney Aviation Service Limited (BASL), which was concessioned 10 years ago by the administration of President Olusegun Obasanjo. 

However, the concession was racked by series of litigations over alleged breach of contract by both parties: the Federal Government and BASL, owned by the legal luminary and businessman, Dr. Wale Babalakin.

For many, the concession of MMA2 as laudable and pioneering as it was, is also a bad precedence in airport concessioning going by the crises that trailed the concession. This was why many experts and stakeholders suggested that the present experiment with concession must undergo painstaking process; follow due diligence and legal frameworks to avoid a repeat of the MMA2 experience.

Government has only announced the concession of the airports without explaining the modalities. Experts, however, believe this process must be well thought out to make it credible. 

Also, many questions need answers: What areas of the airports are they concessioning? Is it the terminals? The car parks? The airside? What happens to workers of FAAN? In fact the fear of job losses has fuelled stiff opposition that has trailed the concession; especially from labour unions. The dominant feeling from labour unions has been that their jobs would be on the line once government hands off the management of the airports.   

Another major issue requiring explanation from government is what becomes of the ongoing refurbishing of terminals being financed by Chinese loans in the four airports? Already the four terminals are on the verge of completion. In fact the ones in Lagos and Abuja are only waiting for commissioning. 

Other questions begging for answers are: would the new modern terminals be handed over to private operators? Also of concern is the fate of 18 other airports which depend largely on the big four to survive. 

This was why Mr. Chris Aligbe, an aviation analyst, suggested that any investor taking over one of the big four should also include one or more less viable airports to keep them running.

But stakeholders, airline operators and other experts say there is no alternative to concessioning. However, they add that requisite legal framework must be spelt out to avoid the experience with MMA2.

But the labour unions are adamant in their opposition as expressed during the week when they carried placards at major airports in the country, singing, dancing and rejecting the proposed concession. The workers, represented by the National Union of Air Transport Employees (NUATE), Air Transport Services Senior Staff Association of Nigeria (ATSSSAN), Nigeria Union of Pensioners (NUP), FAAN branch, and Association of Nigerian Aviation Professionals, said concessioning was not the solution to the challenges hampering the smooth running of the airports. Describing the proposed concession as a fraud, they blamed inefficiency in the system on political interference.

Secretary General of NUATE, Comrade Olayinka Abioye, said major aviation agencies, including the Nigerian College of Aviation Technology (NCAT) in Zaria, were hampered by political interference. They also accused the minister of earmarking N659m for the concession campaign.

Abioye said, “Because of political interference, NCAT has not been doing well. Instead of Sirika to improve NCAT, he is planning to open a University of Aviation in Abuja. NiMet has a training institute at Oshodi, but Sirika wants to establish another School of Meteorology in Katsina State: his home state. In addition, whenever, they invite us to stakeholders’ meetings, they don’t respect us. His (minister) decision becomes law. Concession will outlive Sirika. By the time we finish concession, Sirika will not be there.” 

Abioye alleged that the aviation ministry had earmarked about N659 million to see that the concession project worked, while N125 million out of the total sum is said to have been allotted solely for travelling, marketing and campaign of the concession project.

“We are not opposed to any system that will improve on what we do. By the way, what are we concessioning? Concession may not be the answer, but proper management. Let us have full autonomy for FAAN,” Abioye said.

Also speaking, President of ATSSAN, Ilitrus Ahmadu, said, “The leadership of ATSSSAN and NUATE are solidly behind you and we will continue to engage government. We must work together and we must be on the same page and we must use every resource to achieve this. We have every reason to exercise fear based on what we have seen in other sectors. 

“MMA is the worst concession plan anywhere in the world. We must negotiate collectively as a union to achieve result.”

The Secretary General, Association of Nigerian Aviation Professionals (ANAP), Comrade Abdulrasaq Saidu, said FAAN, NAMA, NCAA and NiMet resolved at their zonal council meeting to oppose any form of concession in view of past and present corrupt tendencies being applied to favour few individuals.

“We say no to it and shall fight it with the last blood of our union. We wrote to President Muhammadu Buhari the danger to the security of Nigeria. We asked questions on issues which must be given full details,” he said.

Aviation analyst and Chairman of Centurion Security, Group Capt. John Ojukutu, said there were no clear terms as to what the government wanted to concession. He said government must declare the areas to be concessioned, warning that the airside should be a no-go-area in the concession arrangement. 

The former Airport Commandant of MMA urged government to invite business gurus in the country to take over the management of the terminal buildings.

However, the Federal Government is not going back on the planned concession despite the protests. According to Sirika, government could no longer fund the airports hence the decision to concession them. He disclosed that President Buhari gave the approval for the concession two months into his administration. 

Sirika further said government had garnered sufficient knowledge on concession to get it right this time around, adding, “But today we have the knowledge and it will be transparently done with active participation of workers in both the delivery and the steering committees to drive this process.

“What is more, come this Friday a portal will be put up by the Infrastructure Concession Regulatory Commission (ICRC) where all matters of concession will be available for anyone to see. This is an extra effort by this government to be so transparent in dealing with this type of situation. 

“So, when it is transparently done, labour issues will be addressed within the process and then you will agree with me this is the best way to go.

“I had talked about concession as against the outright sale that was tried by past governments. I read on the social media that I stole N635 million, but in the body of the story they said I had budgeted to spend it during concession. I have to say that we have been meeting with them (workers) but the policy of the government is that we cannot fund aviation infrastructure today through public budgets. The money is not there. We intend to get the private sector to come and put in their money,” Sirika said.

Speaking with Daily Trust on Sunday, Chairman and CEO of Air Peace, Mr. Allen Onyema, said concession was the way to go. He, however, advised government to ensure the protection of jobs which he said might not be realistic as a private investor would want to streamline its workforce. 

He said, “Government has no business doing business: that is the truth. If the Federal Government has concessioned the airports, that is the right thing to do. So if this government decides to concession airports, they have done the right thing.

“Look at MMA2 that is being run privately, it is the best airport in Nigeria. They need to assure the workers that they won’t lose their jobs. 

“You remember when the government is doing business, there is a tendency to over-employ, and when you over-employ; it does not help business: that business would continue to go down. You cannot rule out the fact that whoever is going to take over these airports would streamline their human resources, some people would surely go,” Onyema said.

Aviation veteran, Capt. Dele Ore, congratulated government for taking the bold initiative to concession the airports which he said was the best thing to do, urging government to ignore those opposing it. 

He said, “If you have the best advice about your diet to keep healthy and all that, some people would kick against it. You can never satisfy human beings.

“Whatever it is, say it anywhere that I, Dele Ore, said that there is no better alternative than airport concessioning for us at this stage. There is no better way otherwise the airports would continue to be very inefficient. The airports would continue to be a shame.”

Like every other stakeholder, Ore who has been an advocate of concession said government must define the areas of airports being concessioned. He added that the airside must be left out for security reasons.

“We must define what we are concessioning? Everybody likes the glamorous sight of beautiful airports and all that. But what are we concessioning? he asked rhetorically. 

The issue of security is not to be concessioned. But when we define that we are concessioning the terminal, the business areas and few other things like places where people would be attracted to come shopping, then some people would then bring money to invest.

“And then there are procedures. You have the Infrastructure Concession Regulatory Commission (ICRC), you have the Bureau of Public Procurement (BPP) Act and other legal frameworks. And we want to be sure that this is done properly, transparently, due process followed and all that. The whole world must be told what we are trying to do. We must advertise in the media and get the best people with track records. 

“I congratulate the government because we have been talking about this for long, since 2007. Every government would look at it.  We should make sure things are done properly and all of us would be happier for it. I am all for it. The unions would be against it. The lazy people who are not hard-working or qualified would be against it, but the professionals would be fixed and given better training to run the airports in future,” he said.

The general consensus among stakeholders is that government should leave out the airside, which is the tarmac, in the concession. Also, due process of law must be followed to make it not only successful but credible. Any attempt to concession the airports to government cronies who might not meet the requirements, according to experts, might be counter-productive.