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Delay by the government to commence concession of Nigeria’s four international airports after six months of approval is an indication of poor execution capacity by the Federal Government, experts tell BusinessDay.
Six months ago, the federal government approved the concession of the Murtala Muhammed Airport, Lagos, the Nnamdi Azikiwe Airport, Abuja, Mallam Aminu Kano International Airport and Port Harcourt International Airport and appointed transaction advisers.
However, execution of the transaction seems to be slow as transaction advisers and the government are yet to commence the project or come out with concession models for the airports.
Other stakeholders have expressed concerns that concerned parties are not carried along in the process and some selected transaction advisers have never had any business with airport management.
John Ojikutu, member of aviation industry think tank group, Aviation Round Table (ART) and Chief Executive of Centurion Securities, told BusinessDay that government wants to concession the airports, establish a national airline, establish an Maintenance Repair Overhaul (MRO), establish aerotropolis, amongst others with little or no inputs from the private sector whereas these are very much the concerns of the private sector than the government sector especially in a developing economy.
“Government is therefore silent because it has put too many irons in the fire at the same time. The concession of the airports may hit the rocks if the issues of the insurance of the airports that was tampered with in the revised Part 18 of the Nigeria Civil Aviation Regulation (NCAR) are not well defined as they were in the old Part.
“Prospective investors must be concerned about these deficiencies and many others they consider as the minimum requirements for them and the standards for operating airports in their countries. No credible investor from European Union (EU) countries would want to invest in any of the projects the way it is been handled especially if they are not advertised,” Ojikutu said.
He explained that the withdrawal of Lufthansa as one of the advisers after it was invited to do the apron extension for the MMIA terminal was not unexpected, adding that Lufthansa then asked the ministry through the committee to advertise the bid for the project; and the extension was never done.
Olayinka Abioye, general secretary, National Union of Air Transport Employees (NUATE), told BusinessDay that till date, the government has not made wide consultations with stakeholders to agree on the type of turnaround to expect from the airport concessions.
“We are not against public private partnerships. What we are complaining about is the attitude of government when such partnerships are put in place. They don’t consult adequately and even if they consult, they already have a mind-set of what to do.
“Two committees were set up to monitor these concessions. The committees were supposed to have met with the minister of aviation who was supposed to be the chairman of the committee to determine how and who becomes the nominated member of the transaction adviser. How the minister chose these consultancy groups, no one knows,” Abioye said.
In February this year, Messers Lufthansa was removed as transaction advisers for airport concession over clash of interest.
A source close to the government told BusinessDay that an oil and gas firm is among the firms selected by the government as transaction advisers.
“What has oil and gas got to do with aviation? How can an oil and gas firm properly manage the job of transaction advisor for airport concession? What happened to other capable airport management firms?” the source queried.
However, Saleh Dunoma, managing director of the Federal Airports Authority of Nigeria (FAAN) told BusinessDay that government wasn’t silent about the airport concessions but is working with the transaction advisers to develop a business case.
“We have consultants that are working. What they need to do is to look at the current situation, and see what is currently available. They need to brainstorm on the best approach to take.
“There are lot of documentation going on at the moment and the consultants are working. Until they finish the development of business case and then come up with the entire documentation that is needed, then we can now present it to investors,” Dunoma disclosed.
Chris Aligbe, Aviation analyst and consultant told BusinessDay that the transaction advisers are currently working on the airports and it is when they bring out their reports that the concession will kick off.
“When you appoint a transaction adviser, you agree on time that they will give you their report. It all depends on the time line they agreed on,” Aligbe said.
IFEOMA OKEKE
