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FG renovates airports it concessioned

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By Abraham Adekunle

Newly appointed minister of aviation has put concessions under review.

Stakeholders have expressed concerns and uncertainty regarding the Federal Government’s final decision on airport concession as it takes up the responsibility of renovating the Murtala Muhammed International Airport (MMIA). The former minister of aviation, Hadi Sirika, had announced preferred bidders for Lagos, Abuja and Kano international airport concession projects. They were expected to build, renovate and give these airports a facelift. However, Festus Keyamo, Minister of Aviation and Aerospace Development, said that he was putting concessions “under review” and neither reversing nor canceling policy.

This was why stakeholders were wondering why the Federal Government would spend billions to renovate an airport, which they are likely to do in the first place. A stakeholder said that when it was reported in the news that the new minister had canceled the allowances, Keyamo clarified that he had just paused the process and would review before taking a final decision. The stakeholder was surprised when the minister asked airlines to leave the old terminal for renovation. “I would have thought renovation as well should not be on the table for now because if the FG goes ahead to concession airports the holder will do the renovation,” he said.

Government should adopt regulated concessioning.

He revealed that the concessionaire ostensibly made their bids for the airports in their current state. He said that if the government decides to reverse the concession of the airports, it can borrow money to renovate them with all the implications. The stakeholder thus advised that the government should adopt the changes that were regulated and that ensures the right level of investment in airport facilities. Sirika had during his tenure revealed preferred bidders for the airport projects.

Sirika said that the preferred bidder for the Nnamdi Azikiwe International Airport (NAIA), Abuja, was Corporación América Airports consortium, while ENL consortium has also been selected as the reserve bidder for NAIA. According to Sirika, the preferred bidder for the Murtala Muhammed International Airport (MMIA), Lagos, was TAV/NAHCO/Project Plant Limited (PPL) consortium, while Sifax/Changi consortium has also been selected as the reserve bidder for MMIA. The preferred bidder for the Mallam Aminu Kano International Airport (MAKIA), Kano, was also the Corporación América Airports consortium. There are no reserve bidders for MAKIA yet.

Institutional corruption has made decision-making difficult.

These bidders are already at edge because they do not know the final decision of the Federal Government on their plans. John Ojikutu, security expert and former military commandant at the MMIA told the media that the present minister and those before him are avoiding the actual problem with the Infrastructure Concession Act of 2005 with defined processes for PPP or Build Operate and transfer after about 15 years initially. He said that this was what gave room for Bi-Courtney in 2005, which successive administrations in government had been trying to manipulate after the former president Olusegun Obasanjo’s administration but could not.

According to him, institutional corruption has made it difficult to agree on which decision to take since and after the concessions to Bi-Courtney. He explained that the government must know what it wants to do or must be giving out for concessions, which he insists must not include the aeronautical facilities and services. Instead, the government should begin with only the non-aeronautical services like the passengers and cargo terminal buildings, carparks, land and offices, toll gates, etc. “We must know the worth of the services in revenue generation before any concession,” he remarked.

Unions in the industry had earlier warned against the changes.

Meanwhile, unions in the aviation industry had earlier warned selected concessionaires of the Nnamdi Azikiwe International Airport (NAIA) in Abuja and the Mallam Aminu Kano International Airport (MAKIA) in Kano to withdraw from investing in the project. The unions say that their involvement in the process is to their own peril. In a joint statement, representatives of the National Union of Air Transport Employees (NUATE), the Association of Nigeria Aviation Professionals, and the National Union of Pensioners (FAAN Branch) had said that anyone or any entity that may proceed to commit any form of resources to such endeavor was engaging in sheer wastefulness, as the claimed approval of the FEC, if such really exists, was a non-starter.

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