Concession may be good if government abides with agreements
From all indication, the federal government may be at advanced stage to concession some major airports in the country. Those marked for the exercise include the Murtala Muhammed International Airport, Lagos; the Nnamdi Azikiwe International Airport, Abuja; the Mallam Aminu Kano International Airport, Kano, and the Port Harcourt International Airport, Omagwa. Already, the federal government has advertised the process that will culminate in the concession of the terminals and related services located at these four airports. But whatever may be the merit of the idea, we enjoin the authorities to make haste slowly on the issue.
The rationale behind the proposition, according to the Ministry of Aviation, is to develop Nigeria’s four major commercial airports and surrounding communities into efficient, profitable, self-sustaining commercial hubs, which will create more jobs and develop local industries through a Public-Private Partnership (PPP) arrangement. The execution of this idea under the Aviation Sector Roadmap, the federal government has explained, is meant to achieve the objective of air transport value chain growth by developing and profitably managing customer-centric airport facilities for safe, secure, and efficient carriage of passengers and goods at world-class standards.
On the surface, this seems well-intended and is the way to go, under the prevailing circumstances. But while the idea appears noble, industry stakeholders are not optimistic that the concession will be successful because of past experiences. Besides, the concession plan is not transparent. So far stakeholders are only told what is being done and not involved in the process. So, the whole enterprise seems to be no more than the personal project of the Minister of Aviation, Hadi Sirika. There are also labour-related issues that are being glossed over. The 3,000 workers of Federal Airports Authority of Nigeria (FAAN) do not share Sirika’s optimism. In fact, they believe they will be shortchanged and lose their benefits in the concession plan as it happened to the workers of the defunct Nigeria Airways Limited.
Concession in the aviation industry has been fraught with litigations because of lack of transparency and the tendency of government to renege on agreements. The well-known case is the one concerning FAAN and Bi-Courtney Aviation Services Limited (BASL), where the latter accused the federal government of taking over and managing the General Aviation Terminal (GAT) located at Lagos airport, which was part of the facility it inherited when it won the bid to build and operate the domestic terminal, the Murtala Muhammed Airport 2 (MMA2). BASL has won several cases against FAAN on the matter, including at the Supreme Court, but the federal government has failed to abide by the court judgements.
There are other issues that the aviation minister is yet to address. For instance, the four airports government wants to concession are the main revenue earners for FAAN. In fact, earnings from the Murtala Muhammed International Airport, Lagos alone is more than that of all the other airports put together. How those 22 others scattered across the country will be sustained is a question that has remained unanswered since the government started the process to concession four of the 26 federal airports in the country.
There is no doubt that if transparently carried out, concession of airport facilities will have immense benefits. But the fear that existing and future litigations could hamper any such exercise is real, given the way the federal government reneges on agreements. There is therefore an urgent need to address not only the issue of what happens to the other airports but also the transparency of the process leading to the concession of the only four airports in the country that are profitable.
