Nigeria’s Only Airport Concession Hit Headwind at Take-Off 13 Years Ago, Same Weather Condition Prevails to Date- ASRTI Webinar

Major operators and investors in Nigeria’s aviation industry are full of lamentations on the un-wieldy and uncoordinated operating environment in the industry. It is of note that the prevailing condition was fostered on the industry not by the COVID-19 pandemic, but by a systemic dysfunction construct that stealthily crept into the entire gamut of the industry’s ecosystem.

Imagine a subsisting concession agreement of a terminal that is running its 13th year with an outsourced facility firm yet, not every material particular in the purported agreement is clear to both the concessionaire and its principal.

This is part of the fallout from the Aviation Safety Round Table Initiative, ASRTI 2^nd quarter Business Breakfast Meeting, BBM, for 2020. The event held through Webinar and with the title; “Airport Concession, So Far How Far”, got some panelists recounting their sordid experiences while making spirited efforts to change the industry’s narrative.

One of the very well, known players in the Nigerian aviation industry, Mr. Tunde Fagbemi, Chairman Maevis, asked rhetorically, “which aspect of the airport operations have not been concession?”. As much as he expressed the conviction for injection of fresh capital to upgrade the terminals’ service delivery level, he all the same recounted that, “FAAN has already concession. It is not a new thing”.

He said for a successful airport management, “regulation is very crucial. Regulation must impact on technicalities and airport economics. Also serious complex finance is needed although aviation investment in airport is most volatile, than what obtains in maritime, road and even rail”

Fagbemi cited Dubai with a population of about 3 million but its airport recorded 62 million passengers per annum and added that “the technicality of putting the airport to excellent use through adequate provision of ICT and other infrastructure, are critical to making success of managing the terminal”, he said.

He however warned that the present concession being planned should not be shepherd drowsy. While the concessionaire would have to be on its toes to ensure safety, insurance, are top notched, and noted that the airspace management is of paramount importance.

The Maevis helmsman whose firm was formerly in charge of facilitation at the Murtala Muhammed International Airport, MMIA, said from his observations, nearly every airport operations have been concession or out sourced to an independent firm.

Fagbemi said apart from air traffic control and meteorological services that are entrenched, other aspects already concession he mentioned as; passenger facilitation, duty free, restauranteur, passenger throughput, baggage handling, cargo ware housing, runway cleaning, moving old and frail passengers within the terminal, car park, among others are all being handled by third parties.

He however noted that due to the dwindling resources of government, concession will help government, through private initiative raise enough capital to fix the infrastructure deficit in the nation’s terminals.

Capt Hamisu Rabiu Yadudu, Managing Director, FAAN

In his submission, Dr. Wale Babalakin, Chairman/Chief Executive Officer, Bicourtney Aviation Services Limited, BASL, decried the gross lack on the part of government and its top echelon to honour agreement.

He lamented that nearly everything in the concession agreement signed by both parties 13 years ago, had all been breached by government.

Babalakin a lawyer by practice said by the agreement reached at a meeting presided by late President Musa Yar’Adua, it devolves the terminal one of Murtala Muhammed Airport, to BASL.

The intrigues created by the disdain of government for agreement had prevented the concessionaire from progressing to the next phase of the project which he said was, the construction of a tunnel to seamlessly link the international terminal to the domestic terminal.

The Senior Advocate at the Nigerian bar, lamented that the Federal Airport Authority of Nigeria, FAAN, which should be the regulator for the concessionaire had turned itself to a competitor hence making the running of the terminal very cumbersome.

He said FAAN often acted as ignorant of numerous investments made on the terminal by acting in such a way that most often than not, undermine such investment and put the terminal manager, BASL, in dire strait as to the appropriate servicing of facilities raise from the bank with the unpleasant conditions of raising capital.

He said government attitude to agreement would surely constitute a clog in the wheel of some of its good intentions as no credible investor local or international, would want to invest in an economy where those who call the shot had no regard for legal agreement.

Wale Babalakin however, commended the current leadership of FAAN as exemplified by Capt. Hamisu Rabiu Yadudu as given the concessionaire a listening air. He said Yadudu’s leadership had been a far departure to his predecessors.

Dr. Harold Olusegun Demuren, a former Director General of the Nigerian Civil Aviation Authority, NCAA, advice those who interface for government in matters concerning aviation to look for ways and means to resolve various long standing litigation with FAAN.

The re-known aviation administrator and aeronautic engineer said the nauseating volume of litigation against FAAN needed be addressed as a matter of urgency if credible bidders are expected to be interested in the concession program as being promoted by government.

It can be recalled that since the concession of the MMA2, the concessionaire had severally been to court for nearly every item on the concession agreement for judicial interpretation. The court has had to help determine the tenor of the concession. The court has had to help determine the scope of the concession and on such thing as if the General Aviation Terminal, MMA1, was included in the purview of the concessionaire, among other contentious issues.

Thirteen years down the line, no one can make categorical statement on the scope of the concession, its tenor, not even the aviation ministry or FAAN.