On planned airports concessioning and question of propriety

By Kamal Ololade Ahmed

Nigeria’s quest towards the Concessioning of four international airports took a leap forward on Monday, October 25, 2021 with the coming to a close of the deadline given to interested investors and stakeholders to file in their Request for Qualifications (RfQ).

This set the stage for the next phase of the Nigeria Airport Concessions Programme (NACP) –  the Request For Proposal (RFP) –  which the Federal Ministry of Aviation said shall be published and sent directly to qualified bidders for their response.

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The airports slated for Concessioning are Murtala Muhammed International Airport Lagos, Abuja, Port Harcourt International Airport, Mallam Aminu Kano International Airport, Kano, and Nnamdi Azikiwe International Airport, Abuja.

Those airports, like the others being managed by the Federal Government, have continued to operate at sub-optimal levels despite huge investments from the public till.

The ongoing concessioning programme is not coming from the blues as Nigeria’s first shot at airport concession was in 2000 when the Federal Ministry of Aviation, through the Federal Airport Authority (FAAN) invited eligible companies to send in tenders for the construction of a new domestic Terminal in Lagos.

The call for tender followed the fire incident of 10th May 2000 at the domestic terminal of the Murtala Muhammed Airport (MMA), Lagos which completely paralyzed further aviation operations at the terminal.

Among the companies that submitted bids were Sanderton Ventures Limited (SVL) and Bi-Courtney Aviation Services Limited (BASL). 

SVL eventually won the bid while BASL, which came second, became the reserved bidder. The winner could not, however, meet up with the terms, thus the Federal Government of Nigeria and BASL on April 24, 2003 executed a Concession Agreement for the redevelopment of the airport terminal.

It was a Build, Operate and Transfer (BOT) agreement and the new Terminal, tagged MMA2, which was commissioned on  April 7, 2007 by the then president Olusegun Obasanjo became operational on  May 7, 2007, and has since redefined the Nigerian aviation industry.

MMA2, a baby of Dr. Wale Babalakin SAN, lawyer and infrastructure developer has consistently won the laurels of being the best managed airport Terminal in the country.

Anytime he speaks on MMA2, Babalakin always recalls that the design he was given by government to construct was “a shed.” He would add that the turning point came during one of his visits to South Africa and he discovered that the South African Government was equally constructing a new domestic terminal for the country and he decided to replicate the same facility in Nigeria.

He said recently in Lagos that his patriotism for Nigeria made him enhance the capacity of the terminal to what it is right now and added that he has plans to improve it in the future.

Indeed, the efficiency of running the Terminal and its ambience are reasons being put forward by even the Federal Government to justify the ongoing Concessioning programme of the four international airports.  

It is a result of this display of competence that many critical stakeholders feel that BASL should enjoy right of first refusal in at least one of the four international airports up for Concessioning.

Experts also hold the position that based on the experience of successes and failures of concession contracts, government should adopt the Balanced Concession Model in the case of the four international airports under consideration.

The model, among others prescribes that “The selection of concessionaires should be based on a balanced scorecard approach and not on the financial evaluation alone.”

As it stands today, no other indigenous company has the pedigree of BASL in Airport Terminal management in Nigeria. Governments the world over give preference to tried and tested indigenous companies in matters such as the one the aviation ministry is currently midwifing.

This is particularly important for a government headed by President Muhammadu Buhari, who is reputed for the slogan that Nigerians have no other country they can call their own and that they must therefore strive to salvage it. To do otherwise will amount to stifling the growth of indigenous entrepreneurship and paying lip service to the slogan.

This clearly brings us to the statement credited to the Minster of Aviation, Senator Hadi Sirika, who at the close of Request for Qualification (RfQ) was quoted  as saying that “The amount of response to the request for pre-qualification by highly reputable international airport operators across the globe is indicative of the level of confidence that people have in our concession programme, and, by extension, the administration of President Muhammadu Buhari.”

The Minister certainly cannot tell Nigerians that only “international airport operators across the globe” participated in the RfQ as the Chairman of BASL, Dr. Babalakin has been widely reported in the mass media as expressing interest in the Concessioning programme.

If BASL, and by extension some other Nigerian companies, participated in the RfQ, then the Minister is sending a negative signal to the world that he does not care about the contributions of his  fellow Nigerians to national growth and development. It is not yet late for the Minister to redeem what seems like a Freudian slip by him. 

There is the urgent and compelling need for the Nigerian government to encourage the growth of indigenous companies the same way powerful western nations fostered theirs into becoming the multi-national companies that are now household names all over the world.

By so doing, the Nigerian government will be carrying out one of its duties by nurturing brands which will ultimately enhance national pride and economic development.

This, incidentally will also be in line with the letters and spirit of Executive Order No.5 (EO5) signed on Friday, February 2, 2018, President Buhari, by which all Ministries, Departments and Agencies (“MDAs”) of government were directed to engage indigenous professionals in the planning, design and execution of national security projects and maximise in-country capacity in all contracts and transactions with science, engineering and technology components.

Giving BASL the right of first refusal in the ongoing Airport Concessioning programme will certainly promote the set objectives of EO5. Current statistics provided by International Air Transport Association (IATA) indicated that over $200 million of foreign airlines funds are trapped in Nigeria. Supporting BASL will help conserve our foreign reserves as there would be no need for repatriation of funds to any foreign country.  

Kamal Ololade Ahmed wrote via [email protected]