Airport Concession: Addressing Stakeholders’ Fears

By Kenneth Jukpor

Airport Concession: Addressing Stakeholders’ Fears

As the Federal Government through the Infrastructure Concession Regulatory Commission (ICRC) and the Ministry of Aviation expedites plans to concession four Nigerian airports, stakeholders ranging from indigenous operators to foreign airlines, transport professionals and aviation consultants, aviation workers as well as concessionaires, have raised varying concerns.

The airports set for concessions are; the Murtala Muhammed International Airport, Lagos; Nnamdi Azikiwe International Airport, Abuja; Mallam Aminu Kanu International Airport, Kano; and the Port Harcourt International Airport, Rivers.

Some of the fears include the emergence of arbitrary charges and increment in existing charges by the concessionaires, delegation of control of crucial aeronautical services to concessionaires, possible political interference in the concession exercise that could see eventual winners emerge not based on merit.

During an exclusive chat with MMS Plus in Abuja last week at the 3rd National Transport Summit organized by CIoTA, the Director, Human Resources and Administration at the Federal Airports Authority of Nigeria (FAAN), Mr. Norris Anozie assured that the concession wouldn’t lead to arbitrary charges and only non-aeronautical services will be concessioned.

His words: “The concession is to improve and expand the value of the airports to the nation. It is obvious that there is a need to expand and one viable way to achieve this is to open up the business for private investors and expertise. It is important to note that it’s the terminals that are being concessioned and not aeronautical services.”

Noting that there has been a lot of negative press around the moves to concession, he argued that the narrative should be changed because the concession would provide more jobs, direct businesses and other ancillary services.

“Aviation business is one that attracts other side businesses and investments that aren’t directly aviation. We also have to note that airports are the first points of call for foreigners flying into the country. An airport not only encourages tourism, but creates an opportunity for areas that aren’t developed. So, we are grateful and happy that we are very close to seeing the airport concession done.”

Comparing the post-concession experience at the seaports to the airports, he said; “We have controls in the aviation sector because it is highly regulated. There is confusion between the airlines and FAAN that manages the airports. The airlines have a charter and an act that established them. Due to demand and supply, they can increase charges but as managers of the airport, FAAN has a specific role. Before a new cost goes into effect, it would have to be approved by the legislature.”

“There is a process that any increment has to undergo before it is approved. All stakeholders would also be carried along before such a thing can happen. I don’t see why there should be any fears about an increase in charges because it is not automatic. There is a process that has to be adhered to.”

Also speaking with MMS Plus on this issue, a former Vice Chancellor of the Federal University of Technology Owerri (FUTO), Prof. Innocent Ogwude said concessioning the airport is the right thing to do.

“In my opinion Nigeria has delayed a lot in carrying out this concession. FAAN, which is the custodian of the nation’s airports, has been a monopoly for a very long time. Each airport is actually supposed to be autonomous and this is the practice in advanced countries like Britain. Gatwick, Heathrow, etc, are all autonomous airports,” Ogwude said.

Noting that Nigeria has been doing reforms in the transport sector, he pointed out that the nation has visited and unbundled theoretically the Nigerian Railway Corporation (NRC), seaports have been unbundled and the inland waterways is set for similar unbundling.

“FAAN was slated to be unbundled years ago but the government didn’t begin this unbundling despite planning for it since 1999. So, it’s time to unbundle it. This means freeing the airports and allowing private sector nous and investments. The four most profitable airports are the ones that the concession is scheduled to begin with. These airports are attractive for investors,” he posited.

According to him, the move to concession the airport further re-emphasizes Nigeria’s ambition to be an aviation hub in West and Central Africa.

“Nigeria is a natural leader in West and Central Africa. The nation wants to be the hub of aviation, maritime, railway and if possible highways. To achieve this status in any of the sub-sectors of transportation isn’t easy. The nation has to be the financial hub, administration hub, hub for bunkering via aviation fuel as well as the infrastructure. Being a hub means that all the necessary components would be available in the country,” he added.

ICRC, the Federal Government agency supervising the concession of the nation’s four main international airports, has completed the evaluation of 13 companies that have submitted Requests for Qualification to participate in the bidding process.

The development came about five weeks after the Federal Government closed the RFQ on October 25, 2021, having extended the deadline from September 25, 2021.

ICRC had revealed that a total of 13 airport consortia, comprising local and foreign companies, submitted bids to be prequalified for the planned concession of the four airports.

Bi-Courtney Aviation Services Limited, operators of the Murtala Muhammed Airport, Terminal Two, Lagos, and Maevis Nigeria Limited, a local firm and former concessionaire with the FAAN, were among the bidders.

Others include operators of Singapore’s Changi Airport, operators of France’s Charles de Gaulle Airport, and operators of Ethiopia’s Airport.

Speaking with MMS Plus recently, a former Commandant of the Murtala Muhammed Airport, Lagos and Secretary General of the Aviation Safety Round Table Initiative, Group Captain John Ojikutu (Rtd) advised the federal government not to concession aeronautical services.

His words: “The airports that the government approved money for are the same airports that are scheduled for concession. What are these monies meant for? Are they for aeronautical or non-aeronautical services? These are questions that are yet to be answered. The industry has to know what aspects are up for concession and it is important that we don’t concession aeronautical services.”

“If we must concession, we shouldn’t consider the aeronautical services but we can concession the non-aeronautical services. Runways, runway lighting, taxi-ways are key areas that shouldn’t be concessioned. We shouldn’t have a situation where the International Civil Aviation Organization (ICAO), which has placed us on Category 1 status, would downgrade the nation.”

“They can concession the airport terminal building and extend the building to the apron; car parks, toll gates, and other auxiliary services can be concessioned. We must define what services at the airports will be concessioned.”

Meanwhile, the Association of Foreign Airlines and Representatives in Nigeria (AFARN) has advised the Federal Government via the Ministry of Aviation to ensure the ongoing concession of four international airports is transparent.

The President, AFARN, Kingsley Nwokoma, who spoke at a press briefing in Lagos on Thursday, said the international community and investors were watching the development, stressing the need to follow due process.

According to him, the association is in support of the proposed concession plan by the government but is concerned about the process.

In a statement, Nwokoma said, “The news, however, is that a lot of comments from various quarters have continued to trail the four major airports penciled down for concession since the plan was hatched and made public by the Minister of Aviation, Hadi Sirika, almost three years ago.

 “The world is watching the process and AFARN calls upon the minister to live up to the above promise he made at the outset of this process,”

He recalled that the law firm of Mr. Femi Falana, SAN, had recently raised concerns over the concession process.

“Much as I share this opinion, our position is that things should be done right and transparently too, to avoid crippling the industry that has provided thousands of Nigerians with employment. We cannot afford to gamble this time with the aviation industry, considering the state of the economy and its global outlook too,” he noted.

The AFARN president recalled that the liquidation of the defunct Nigeria Airways which was reportedly done in a hurry should be enough lesson for everyone involved in the ongoing concession plan to learn from.

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