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Why President Buhari’s Airport Concession Scheme is a Bad Idea

That the president Muhammadu Buhari government started as a confused government replete with continuous policy somersaults and misdirected decisions is no news to Nigerians.

The president who 6 months to appoint his “All Star” team of Ministers majority of whom have only succeeded in doing everything except their duties and obligations to the Nigerian People. The Nigerian minister of state for aviation Mr Hadi Sirika is currently trumpeting a new policy which would fundamentally alter the aviation sector in Nigeria.

The purported plan to concession the 4 airports that sustain the remaining 18 airports and subevent agencies such as the Nigerian Civil Aviation Authority and the Nigerian Airspace Management Authority may be a misled approach to solving the problems plaguing the Nigerian aviation industry if not critically analysed and due diligence undertaken by the Federal government. 

A History of Failed Concessions 

As some of us know in the year 2000 the Olusegun Obasanjo regime signed a Build, Operate and Transfer (BOT) contract with Bi-Courtney Aviation Services for the construction of the second terminal at Murtala Mohammed Airport (MM2). The new airport terminal was opened in 2007. However, the PPP contract was (still is) a subject of controversy and the secrecy owing to Nigeria’s inexperience with concessionaires is appalling. 

The Nigerian concession story is not complete without discussing the failed concessionaires that have emerged in Nigeria. The Poster boy of failed concessionaires Bi Courtney Nigeria limited is a good example of why the concessioning of the airports is a bad idea if due process is not followed. In May, 2009 an agreement signed by the Yardua led Federal government granted the company the lucrative Lagos-Ibadan Expressway concession rights in a Reconstruct, operate and transfer arrangement. 

The company succeeded in only increasing the amount of billboards on the road with adverts announcing the agreements with the Federal government rather than rehabilitating the ever busy road. Surprising enough was the fact that the company even got the Lagos Ibadan concession deal despite the plethora of court cases it was engaged in at that time. The Company failed to commence the road project citing bureaucratic procedures and government interference.

The Federal Government in November 2012 Revoked the contract awarded to Bi Courtney Nigeria limited and rewarded the same road the Julius Berger Nigeria and RCC Nigeria without sanctioning Bi Courtney Nigeria limited. If the agreement the FG signed with Bi Courtney Nigeria limited was followed strictly, the Nigerian government would be entitled to 30 Billion naira in fines. Successive Nigerian government have been know to let big fishes off the hook and chase after small fries. 

Another contentious concession was the drama played out between the Federal Airports Authority of Nigeria and Maevis Nigeria Limited. FAAN, on behalf of the federal government, in October 2007 signed an agreement with Meavis Limited for the acquisition, installation, operation and management of World class integrated Airport Operations Management System, Airport Operation Database, Common Use Terminal Equipment, Computer Based Departure Control System Platform, Common Use Self Service Kiosk, a fully automated Airport Pricing and Billing System at designated Airports in Nigeria.

Labour unions in the aviation sector had always resisted Maevis and claimed that the company was milking the government, sometimes organizing protests against its operation. Finally, the Nigerian government terminated the contract with Mavis. In a letter to Maevis from FAAN, the concessioner was accused of breaching the agreement signed with the federal government. The company was accused of deducting several categories of money from source contrary to the agreement as well as refusing to deduct VAT and other fees due to government as well as opening and operating an account without authorization from FAAN. 

FAAN and Maevis Nigeria Limited represents a brand Nigeria that has emerged to define how contracts are awarded, managed and executed or cancelled. 

With the array of controversies confronting the concessioning practice in Nigeria, it is becoming glaring from analysis that the reasons for the failure of the initiatives mentioned above is firmly situated in the competence, purpose and capacity of government to be accountable for decisions reached by it and also by failure of parties to conduct the necessary due diligence required on projects. 

The Aviation intervention fund projects instituted by the Ex Minister of Aviation Stella Oduah was good initiative has it has produced New terminals In Lagos, Kano, Abuja, Port Harcourt and Enugu. Also it is necessary that the government does not allow uncompleted projects become a common feature of such concessions without punitive sanctions being put in place an example of such as the uncompleted structure belonging to a concessionaire opposite the car park of the Muritala Muhammed Airport Terminal 2 which stands as a security risk at a very strategic area.

Conclusion

It is not safe for the Nigerian government to engage in cherry picking of its National assets and security at the detriment of expenditure incurred at putting those assets in top shape. If the Concession goes through the Nigerian government must ensure that the aftermath of the concession of the airports is properly managed as employees of the FAAN, NCAA, NAMA of the airports who are most likely to lose their jobs as a result of the redundancy occasioned by the concessioning may not exactly agree to go to the labour market willingly. Unfortunately Job losses are not exactly easily arbitrable matters and a lengthy litigation process awaits whoever engages in this transaction as a party. 

Litigation would lead to lost revenue and such will jeopardise the already fragile Nigerian aviation sector which is currently struggling to survive in this recession times. A problem that will arise from the concession of the airports is the fact that the four major airports monetarily sustain the remaining 18 airports in the country as the Minister of state for aviation said. The question is how will FAAN sustain the remaining airports since it will operate at a loss and the various state governments cannot afford to maintain the airports at the required minimum IATA standards? Will the Federal Government unilaterally Wind up FAAN thereby bypassing/undermining the national assembly that enacted the law creating the agency? What will happen to the redundant employees created? 

So many questions to be asked but the Buhari Administration has it is accustomed to does not seem to be willingly to communicate to the Nigerian people.

The author, Adavize Alao a Digital Marketer Writes in from Enugu State 

Adavize07@gmail.com

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