Concessioning of Non-Aeronautic Assets of 4 Major Airports

Murtala Muhammed Airport, Lagos

BEVERLY HILLS, June 06, (THEWILL) – ANTHONY AWUNOR looks at new trends in the Federal Government’s concessioning  plans for Kano, Lagos, Abuja and Port Harcourt airports

For many years, the Federal Government has been seeking the best possible ways to concession four major Nigerian airports that are believed to be viable.

The airports, which are being considered for a period of 20-30 years, include the Murtala Muhammed Airport, Lagos; the Nnamdi Azikiwe International Airport, Abuja; Malam Aminu Kano Airport, Kano and Port Harcourt International Airport, Rivers State.

Throughout the initial stage, aviation stakeholders have been in the dark regarding the actual sections of these viable airports that will be concessioned.

Another question that has been begging for an answer is this: What parts of the airports are being considered for concessioning? Do they include the terminals, car parks or airside? What happens to the workers at FAAN? In fact, the fear of job loss has fuelled the stiff opposition that has trailed the concessioning, especially from trade unions. The dominant feeling among trade unions has been that jobs would be on the line as soon as government hands over the management of the airports.

Another major issue that requires explanation from the Federal Government is what becomes of the ongoing refurbishment of terminals that is financed by Chinese loans in the four airports? Already the four terminals are on the verge of completion. In fact, the ones in the Lagos and Abuja airports are only awaiting commissioning.

In reaction to the numerous enquiries, the Ministry of Aviation recently announced the areas that will be concessioned in a document signed by its

Director of Public Affairs, James Odaudu, also stated, “There is no conflict regarding the China Civil Engineering Construction Corporation (CCECC), which was contracted to deliver a number of infrastructure projects throughout Nigeria in 2013. The Passenger Terminal Development works are a small part of this and the Federal Government has every intention to service its obligation”.

It was also gathered that the concessioning applies to the non-aeronautic assets of the airports located in the Passenger and Cargo Terminals. The implication is that the concessioning comprised of the assets from the point of entry of the airport to the point of boarding a plane, and from deplaning to the exit doors.

This space, commonly referred to as the Passenger Terminal, comprises retail spaces, waiting and seating areas, airport and airline lounges and baggage collection check-in counters as well as administrative offices.

The cargo terminals consist of the facilities between the point of entry up to the loading and offloading points, including administrative offices within the said facilities.

Supporting the concessioning plan, in order to reduce the financial burden on the Federal Government for airports infrastructure development management, key players in the nation’s aviation industry have advocated airport concessioning with the target of turning the airspace into a regional hub with four mega carriers, at least, operating with 50 aircraft each for maximum utilisation.

According to the stakeholders, the concessioning of the terminals should not just be a departure from the status quo, but with an objective to deliberately drive regional competitive hubs and mega carriers that will operate in those hubs.

These submissions were part of the deliberations reached at the end of the Aviation Safety Round Table Initiative (ASRTI) webinar held recently with the theme: ‘Nigerian Airports Concession: How Far, So Far.’

At the webinar, the participants, comprising renowned aviation experts enjoined the Ministry of Aviation to also ensure that the terminal concessioning process is transparently conducted in compliance with the extant laws and due process to avoid post-agreement controversies and rancor, as previously experienced.

In addition, they advised that government should, in its current concessioning plan consider all the 22 airport terminals.

Other recommendations made by the stakeholders include the fact that all existing legal, labour and other complications arising from previous experiments should be conclusively resolved. Therefore, there is a need for government to allay the fears of the unions and employees of FAAN with regards to the planned concession. The process must be fair and transparent.

Nonetheless, aviation labour unions have been adamant in their opposition as expressed recently  when they carried placards at major airports in the country, singing, dancing and rejecting the proposed concessioning. The workers, represented by the National Union of Air Transport Employees (NUATE), Air Transport Services Senior Staff Association of Nigeria (ATSSSAN), Nigeria Union of Pensioners (NUP), FAAN branch, and Association of Nigerian Aviation Professionals (ANAP) , said concessioning was not the solution to the problems affecting the smooth running of the airports. Describing the proposed concessioning as a fraud, they blamed inefficiency in the system on political interference.

The Secretary-General, Association of Nigerian Aviation Professionals (ANAP), Comrade Abdulrasaq Saidu, said FAAN, NAMA, NCAA and NiMet resolved at their zonal council meeting to oppose any form of concessioning, in view of past and present corrupt tendencies being applied to favour a few individuals.

“We say no to it and we shall fight it with the last blood of our union. We wrote to President Muhammadu Buhari about the danger to the security of Nigeria. We asked questions on issues which must be given in full detail,” he said.

The unions are afraid that the concessioning of airports will go the way of the Nigeria Airways, which left many workers in abject poverty after its liquidation by the Olusegun Obasanjo administration.

But the aviation ministry has argued that the delivery of this project will help Nigeria to achieve its objective, in terms of air transport value chain growth, by developing and profitably managing customer-centric airport facilities for the safe, secure and efficient carriage of passengers and goods at world-class standards.

According to FMA, investing in and continuously developing the assets put up for concessioning is key to unlocking these opportunities. It noted that the four major airports have huge potential, but they are currently operating at a suboptimal level due to many factors that will be addressed through their concessioning.

On why all the parts of the airports will not be concessioned, the ministry said, “Infrastructure concessionings are very complex and sensitive programmes. They often requiring years of planning and preparation to secure the requisite inputs and approvals from the relevant regulatory bodies. We are starting with the most strategic assets because the successful delivery of this concessioning programme will give all stakeholders the confidence required to consider other possibilities in the sector.”