As the federal government moves to concession top airports in the country, pundits ponder on whether such step could improve operational efficiency in the sector, writes ADENIYI ONIFADE
Plans are in top gear to concession some top airports of the country, which, in the recent past, maintain the majority of the passenger traffic. The airports include: Mallam Aminu Kano International Airport, Port Harcourt International Airport, and Nnamdi Azikiwe International Airport Abuja.
These airports are set to be concessioned to private managers, as the government has consistently believed that private managers can handle them better. However, the major concern of stakeholders is whether concession would improve the efficiency and operational capacity of these airports.
It would be recalled that the Federal Ministry of Aviation had earlier released a request in compliance with the Infrastructure Concession Regulatory Commission (ICRC) and the National Policy on Public-Private Partnership (N4P).
The Aviation Ministry had in statement recently stated that “the Federal Government, through the Ministry of Aviation, is inviting bids from reputable Airport Developers/Operators/Financiers/Consortia for pre-qualification for the concession of selected airport terminals under a Public-Private Partnership (PPP) arrangement.
“The airport’s terminal concession is one of the critical projects under the sector roadmap of the FGN and fits well within the scope of the ministry’s strategic plan for the sector.
“The execution of this project is meant to achieve the Federal Government’s objective in terms of air transport value chain growth. The project will develop and profitably manage customer centered airport facilities for safe, secure and efficient carriage of passengers and goods at world-class standards of quality”, the statement added.
However, there are concerns that the country may get itself into trouble, especially with the contract agreements for the loan and the regulatory agencies.
In a recent interview with Channels TV current affairs programme, Sunrise Daily, former Minister of Aviation, Osita Chidoka, said the ongoing concession has no difference with selling off the country’s assets to the private sector, saying the concession structure by the Infrastructure Concession Regulatory Commission (ICRC) and the Bureau for Public Enterprises (BPE) would be counterproductive.
Chidoka declared: “I think the first thing we should have done was to corporatise – that is to say, turn these terminals, a block of terminals (Lagos Zone) into a company owned wholly by FAAN (Federal Airport Authority of Nigeria), and then make FAAN a regulator, so that FAAN will be the regulatory agency of the aviation terminal buildings, which is part of their responsibility. And then the responsibility for the aeronautical side of the issue will be that of a department in FAAN, while FAAN serves as the regulator of airports.
“So, if we take the Lagos airport zone, for instance, take the airport in Akure (Ondo State), Ibadan (Oyo State), and group them together into an airport, and make it a company, then, we can sell 51 per cent of that to a concessionaire to come and run the airport, while the Nigerian state government that owned the airport before we took it over, the workers inside the airport have shares,” he said.
Another aviation expert, Tunde Isiaka, said he was worried that borrowing to finance these concessions could backfire. According to him, the government had already taken some loans to upgrade airports, and imagined why the government would hand over a facility to private managers, after it had just spent huge amounts to upgrade them.
“The government borrowed money to upgrade their terminals. Shortly, they are going to enter into a management concession – not even a Build, Operate and Transfer (BOT) concession, because you have already built it. You have already invested the money that you borrowed to build these terminals, and now, you are going to transfer these public assets to private corporations for 30 years.
“So far to date, there is no obvious plan (of) how FAAN is going to be able to afford to maintain and upgrade the remaining airports after the cash-cows are concessioned. The impact on the rest of the aviation sector needs to be part of the consideration. That sadly appears to be missing,” he noted.
In a bid to restore confidence on fears of job losses, the Minister of Aviation, Hadi Sirika, stated that the concessioning will just be formal handing over to the private managers, and will not lead to any form of job losses.
“We will not sell the assets that belong to over 200 million Nigerians and the future generation of this country. We are not going to sell, because those that were sold were lost. So, we, in government, believe that we should hold those assets for the Nigerian people in trust. We must make those assets better to provide the services that are needed. So, we said, rather than sell out rightly, we will concession. In other words, we would give it up to someone who would operate them, and make them better. We will, then, get more money. The people will enjoy better services, the industry grows, and after a certain time, the airports will come back to us,” Sirika said at a stakeholders’ consultative forum Sirika explained.
The Minister further explained that the airport terminal buildings to be concessioned would generate their revenues from non-aeronautical resources, while all other facilities at the airports and existing concessions outside the airport terminals would still be managed by FAAN.
He added that the concessionaire would sign service level agreements for runway, taxiway, security and air traffic management with FAAN and NAMA, to ensure that the airport operated efficiently.
The minister disclosed that the concessionaire would provide the investment that is required to upgrade the existing terminals, take over the maintenance of new terminals over a period of time, based on the financial assessment of each transaction.
“Existing concessions within the terminals, however, would be inherited by the concessionaire, and would be allowed to run their course before any review”, adding that tariffs would be regulated in accordance with the procedures set out in the concession agreement.
Regarding the Passenger Service and Security Charges, Sirika stated that the concessionaires and FAAN would share the charges which would be paid directly to FAAN by IATA, while the airport authority would be required to provide manpower, through AVSEC, for the security of both the airside and landside.
Similarly, the concessionaire, he said, would be expected to provide and maintain landside equipment, which would allow FAAN to continue to provide and maintain airside security equipment.
Sirika noted that the airports in the country were operating in a suboptimal environment, and as such, they needed improvements that would be provided by the participation of the private sector, especially in infrastructure investments, runway maintenance, navigation aids, as well as investment in terminal facilities.
Sirlka summed up: “With the increasing population, a private operator of the four main airports would run them, based on international standards, and expand the facilities, in accordance with traffic demands at each of the airports”.