Hadi Sirika, Nigeria’s Aviation Minister, has said that government is cash strapped and not in the position to deploy scarce resources to upgrade or embark on infrastructure project around the aviation sector.
He said this position has made government to consider the concession of some major airports across the country.
This is coming as the representative of the Director-General of Infrastructure Concession Regulatory Commission (ICRC), Haruna Yusuf said the agency would review all concessions before the process that would throw up prefer bidders.
Haruna promised that the exercise would be transparently done to avoid mistakes of the past; stressing that this is the first time the labour unions were included to be part of the process.
The implication of this is that all existing concession inside the terminal at Lagos, Abuja, Port-Harcourt and Kano airport may either be terminated or allowed to run out their terms.
The Minister clarified that what was at stake was the concession of the terminals and not the airports as a whole as misinterpreted by some people.
Sirika who joined the webinar put together by aviation think tank, Aviation Round Table (ART) entitled, “Nigerian Airport Concession: How Far, So Far” from Enugu Airport where he had gone to inspect facilities at the airport that is nearing completion said unlike what the past administration tried to do by selling off the airports, government’s dwindling revenue he reiterated had made it imperative to consider private partnership in the provision of airport infrastructure.
He disclosed that the Murtala Muhammed International Airport terminal which was built in 1979 for 200,000 passengers currently processes nearly eight million passengers, lamenting that the facilities have been overstretched.
“What we are trying to do is to keep assets of the people for the people. We are not trying to sell the assets of Nigerians like the last administration tried to do. What we are doing is for good service delivery. They will revert back to the people. What they are doing is to assist to provide these facilities. Government has no money to pump into airports.”
“Lagos airport was built for just 200, 000 people in 1979. Today, Lagos airport processes about eight million passengers. We are not able to put money into Lagos airport. The private sector is capable of doing that”.
Chairman, Bi-Courtney Aviation Services Limited (BASL), Dr. Wale Babalakin (SAN), stated that the inability of the Federal Government to stick to agreements stunted the infrastructure growth of the sector.
He however expressed joy at FAAN’s position to engage his firm with a bid to settling all litigations arising from the concession of MMA2 instituted by FAAN which went in favour of Babalakin’s BASL.
He described the development as ‘breath of fresh air’ unlike in the past when the airport authority engaged in Gestapo manner to take over MMA2.
According to Babalakin, “Only private sector can finish projects on schedule because they have the funds. If MMA2 had been allowed to go at its pace, we would have expanded and built airport terminals better than they have in Accra. We had plans to build a mono rail that will link Lagos airport international terminal to the domestic terminal. We had plans to build power plant for Lagos airport”.
Former Director-General of Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren, on his part warned that nobody will invest in aviation in the country until all concession issues pending in court are not resolved.
He recalled the Chief Harry Akande concession conundrum which has stretched for years with FAAN allegedly frustrated with the help of former Minister of Aviation, Stella Oduah.
Demuren said, “We need to resolve all issues regarding policy inconsistencies with came with many of these concessions. We inherited problems with Chief Harry Akande and Dr. Wale Babalakin’s concessions and FAAN should sit down to resolve all lingering issues before we go ahead with this new exercise”.
In 1998, the Federal Airport Authority (FAAN) concessioned a huge piece of land at the Lagos airport to Akande International Corporation (AIC) to build a Hilton Hotel, aerotropolis for 50 years.
FAAN is in court with Chief Akande over the land. The land was awarded to Akande, a businessman and a former BOT chairman of ANPP.
He got the concession on February 17, 1998. His company, AIC Ltd won a 50 year concession from FAAN to build a hotel on the land (11.654 hectares of land) at the Murtala Muhammed International Airport.
But after the change of government in 1999, the approval for the permit was held back by the Obasanjo administration for some reasons that were not clear.
An arbitration panel headed by late Justice Kayode Esho awarded $47 million as damages against FAAN for violating the concession agreement which FAAN is yet to obey.
Chairman, African Business Aviation Association (AfBAA), Nick Fadugba, noted that many countries are no longer willing to fund airport projects; the reason for rising concessions and privatization all over the world.
Stakeholders however called on government to make the concession exercise very transparent with a view not to replace public monopoly with private sector monopoly but one that would truly serve the interest of Nigerians