Airport Concession: Resolving FAAN/BASL Impasse on MMA2 Terminal

According to Tim, whenever there is uncertainty or crisis among major aviation stakeholders with effects on their activities, the economy of the airport and its environs would be affected as in the case of the Murtala Muhammed Airport, Lgaos.

For several years now, the Federal Airports Authority of Nigeria (FAAN) and Bi-Courtney Aviation Services Limited (BASL) have been at logger heads over the concession arrangement that resulted in the building of the Murtala Muhammed Airport Terminal 2 (MMA2), which has made it impossible for both parties to reap the full benefits resulting from the concession arrangement.

Both parties have accused each other of having breached the concession arrangement. There also have been allegations of who owes what involving the project. The aviation unions allegedly sponsored by FAAN have alleged that BASL owes the aviation agency two (N2) billion naira from unpaid arrears from the project while BASL on its part alleged that FAAN owes it about N200billion due to a breach of the contract terms.

The concession of the Murtala Mohammed Airport terminal 2 to Bicourtney Aviation Services Limited (BASL) was done during the administration of former President Olusegun Obasanjo more than a decade ago. However, the concession has been a subject of heated controversy between the government represented by FAAN and BASL. According to FAAN, BASL violated the agreement by building the terminal at its present site instead of the old car park where it is currently constructing a hotel and Conference centre, while BASL felt FAAN breached the contract with its refusal to cede the General Aviation Terminal (GAT) from which some indigenous airlines still conduct their domestic operation.

According to BASL all domestic flights from Lagos should be conducted from the MMA2 Terminal which it operates. So based on the inability to grant it the monopoly to control all domestic flights from the terminal, BASL was alleging that government owes a whooping N200 billion, money that would have accrued to it from that aspect of the business.

So far, the disputes have made it impossible to realize some aspects of the agreement. For instance, the proposed Hotel and Conference Centre by BASL behind the MMA2 Terminal can now be described as white elephant projects because BASL has stopped work on the project more than six years and industry stakeholders now view the abandoned project as a security risk to both airport users and even to important dignitaries who used the presidential lounge a few meters away that is located opposite the proposed conference centre.

On Public Private Partnership (PPP), obviously FAAN has not done well as every one of it has gone into has generated heated debates. In recent years, the concession agreements according to FAAN were skewed in favour of the concessionaires and to the detriment of the Federal Government, to which it reports. This is the tale of several of the concessions in the aviation sector, entered into by past governments; deals which are now revealed to be anything but transparent. The legal tussles are revealing that the deal entered into was a rip-off foisted on hapless Nigerians, by those who were in power to favour themselves and their friends.

Today, the spotlight is on FAAN, as it has not derived any advantages from the PPP deals as most of them have gone awry.

This time, it is with Bi-Courtney Aviation Services Limited (BASL). As usual, FAAN claims that the deal it signed was a rip-off. But it signed it, nonetheless.

Also, the concession agreement had been the subject of several controversies as there was supposedly an earlier concession agreement which stated a period of 12 years for the Build operate and transfer project  to mature  and also a second agreement with a 36 year old period for the maturity of the project.

Also, industry stakeholders are worried that the project which has been the cause of several litigations might become an unending one if nothing concrete is done to resolve the impasse between FAAN and BASL over the agreement.

It was on the basis of this that the joint committee of the National Assembly on Aviation during their recent tour of the Murtala Muhammed Airport  promised to wade into the dispute and bring a close to it. The National Assembly has assured the management of Bi-Courtney Aviation Services Limited (BASL), operators of the Murtala Muhammed Airport Two (MMA2) and a member of The Resort Group, that it would resolve all the issues surrounding the MMA2 concession amicably.

This assurance was given when the Joint Senate and House of Representatives Committees on Aviation visited MMA2 during a tour of the tree terminals of the Murtala Muhammed Airport, Lagos, as part of their oversight functions.

Speaking after listening to presentations by a Director/Group Consultant, The Resort Group, Professor Olugbenga Ogunmoyela and the Chief Executive Officer of BASL, Captain Jari Williams, the Chairman of the Senate Committee on Aviation, Senator Muhammad Adamu Aliero and his House counterpart, Nkeiruka Onyejeocha, gave the assurance that the National Assembly was poised to resolve all the issues between the Federal Airports Authority of Nigeria (FAAN) and BASL over the MMA2 concession.

They demanded and got copies of the concession agreement and promised to study them accordingly. Aliero said: “We are going to wade into this controversy between Bi-Courtney and FAAN, we are going to do our very best to broker peace. I think that is exactly what the Joint Committee of the National Assembly is up to. To make sure that justice is done, we are poised to solve the lingering crisis for the benefit of Nigeria, for the benefit of Bi-Courtney and other stakeholders involved in the project”. “Of course, we have requested for all the necessary documents and too, we are aware of the court judgments. So, we are going to explore whatever means available to bring lasting solution to the issue on ground”. He said

The truth of the matter is that Nigeria has to move on. And so, so it is pertinent that everything humanly possible should be done to move the industry forward.

The declining fortunes of government have made it imperative for the government to explore other areas in the effort to raise the bare of aviation infrastructure to global best, thus stakeholders are rooting for concession arrangements that would improve what is on ground and that is why some of the advocates of concession  have stressed that government should get everything right from the beginning in order to prevent a repeat of the issues we are witnessing in the FAAN  and BASL arrangement on the MMA2 Terminal deal. Aviation consultant and CEO of Belujane Concept, Mr. Chris Aligbe, reiterated that concession must follow strict legal and legislative framework to avoid the kind of controversy being witnessed in the case of Bicourtney. “Before you concession, there must be legal framework, there must be legislative framework. It must go through the National Assembly and have fundamental law that would guide the concessioning,” he said.

Also the NASS has been urged to look into the fracas in a holistic way and come up with lasting solutions that will favour the parties involved as well as the masses. Issues like the workers welfare need to be considered. According to statistics BASL has about 1000 workers in its employment while FAAN has a little over 6000 Nigerian workers. These and other issues should be taken into consideration by the NASS as their effort to resolve the problem.