Stakeholders in the aviation sector say that for concession to be successful in Nigeria, the Federal Government will need to adopt models that have worked in best international airports across the world.
They say international airports such as Port Elizabeth International Airport in South Africa, Jomo Kenyatta International Airport in Kenya, OR Tambo International Airport in South Africa and Bole International Airport in Ethiopia, were concessioned taking into consideration the business environment in which they operate.
“Government should consider the clustering option, whereby a major airport will be taken along with other unviable airports within the zone,” Olumide Ohunayo, Head, Research, Zenith Travels said.
Ohunayo said this model would help reduce the liability of the Federal Airports Authority of Nigeria, (FAAN) while they concentrate on regulating, monitoring and securing the airports.
He further observed that Argentina took their 30 airports in totality, using funds from the viable ones to support the unviable ones.
Indians divided their airports into green field and brown field, in a bid to provide funds to support the unviable airports.
“Government will also need to first invite reputable international airport management companies who will achieve improvement in capacity, efficiency and safety of airport terminals,” Ohunayo added.
Wale Babalakin, chairman Bi-Courtney Aviation Services Limited, stressed that the concession model is the option for Nigeria at a time when government no longer has the capacity to fund the airports.
Babalakin explained that pairing of airports nationwide across four regional structures would make them viable.
“Government can divide the airports into four zones, comprising of Lagos, Abuja, Kano and Port Harcourt before offering them to interested concessionaires. Each zone should then be responsible for the growth of all airports within its jurisdiction,” he said.
BusinessDay checks show that only the four major airports in Lagos, Abuja, Kano and Port Harcourt are generating the revenues that are being used to maintain the other 17.
In 2015, Nigeria’s four major airports – the Murtala Muhammed International (MMIA), Lagos, Aminu Kano International Airport, Kano, the Nnamdi Azikiwe International Airport, Abuja and the Port Harcourt International Airport, generated over N32billion and the money expended on their maintenance was put at over N14 billion.
During this period, the other 17 airports also under the management of FAAN, generated over N1.4billion but over N6billion was said to have been used to maintain them.
According to sources in FAAN, among the 17 airports, the Akanu Ibiam International Airport, Enugu generated the highest revenue of N457,725, 797. 86; followed by Margret Ekpo International Airport, Calabar, which generated N162, 887,530.00.
Stakeholders say the other 17 airports on their own cannot generate enough money to sustain maintenance of the facilities, pay for power, workers and other overhead costs.
John Ojikutu, Secretary-General, Aviation Round Table, told BusinessDay that the concessioning of the airports is coming more than ten years after the concession, privatisation and commercialisation Act of 2000.
Ojikutu observed that it was the Act that brought the MM2 terminal to life, adding that whatever stalls the process can only be explained by the last government.
“The concession plan now should be seen as a revival of the stalled plan of the previous government and it is therefore a welcome development.
“It is in the interest of government to concession the domestic airports along with the international airports, otherwise it will defeat the reasons adduced by government for wanting to concession the airports, which is financial constraints.
“My suggestions have always been that each international airport should be concessioned with at least three or four domestic airports spread into the northern and southern regions.
“Secondly, the airports security and safety infrastructure should not be part of the concession; considering that the architecture of most of their systems which have links to national security and emergency management programmes. These should still be the concern of the state,” Ojikutu said.
Tunde Fagbemi, CEO, Maevis Limited, an infrastructure management company, said the public- private partnership (PPP) model of managing airports has brought about improvement in other systems.
Fagbemi pointed out that in 1987 the United Kingdom privatised the British Airport Authority (BAA) through PPP, Adding that since the UK embraced this option, more than 20 countries have completed the sale or lease of airport facilities so far.
The countries include Argentina, Australia, Austria, Bahamas, Bolivia, Cambodia, Canada, Chile, China, Colombia, Denmark, Germany, Singapore, South Africa and Hungary, amongst others.
Nogie Meggison, President Airline Operators of Nigeria told BusinessDay that with the concession, government would be able to save money and to address other demanding sector that affect more Nigerians.
Meggison noted that overall, aside from annual returns due to government; there are regular corporate and personnel taxes on the concessioner through the FIRS.
IFEOMA OKEKE
