Murtala Muhammed Airport II
Murtala Muhammed Airport II (MMA2), under the watch of
Bi-Courtney Aviation Services Limited, is a good example of why airports
in the country should be privatised for viability. However,
stakeholders are unanimous that the airport is also a case study of how
not to go about privatisation. WOLE OYEBADE reports.
A travel website, The Guide to Sleeping in Airports, last year rated
the Port Harcourt aerodrome as the “world’s worst airport”. Lagos and
Abuja international airfields were also named among the 10 worst
airports in Africa.
SOURCE THEGUARDIAN
Stakeholders, except the managing authorities, attested that the
airport experience in Nigeria indeed falls short of what such facilities
are known for around the world.
The website and stakeholders’ assessment was actually concentrated on
only four international airports (Abuja, Lagos, Kano and Port Harcourt)
among 26 others nationwide that are more or less a no-no in matters of
taste and efficient services.
Since 1999, the Federal Government and the Federal Airports Authority (FAAN) have not been miserly in awarding billions of naira worth of contracts for “remodeling” the airports. But the end result has never justified the cost.
It, however, came as a significant step when the current
administration declared that the four international airports, like
apples among oranges, would be given to private investors to manage on
behalf of the government.
Minister of Transportation, Rotimi Amaechi, during a fact-finding
tour of facilities and agencies at the Murtala Muhammed Airport, said
that the planned concession of the four airports was to guarantee
efficiency and good management in view of dwindling resources from the
government for infrastructural development in the aviation industry.
The minister also observed that the Murtala Muhammed Airport II
(MMA2) domestic terminal in Lagos, run by private hands, remains the
best in the country and an example of what to do with other airports.
Unsway by dissenting voices from some quarters, Minister of State for
Aviation, Hadi Sirika, and company, took further steps at Nigeria’s
trade and investment road show in the United Kingdom (UK) some weeks
ago, to woo foreign investors.
Just like the ruling party sold the Lagos success story to gain
acceptance at the last election, the ministers advertised the MMA2
success to the outside world.
The terminal is indeed a success, but at what cost? It would be recalled that the old domestic terminal (now MMA2), like
all other termina nationwide used to be managed by FAAN until fire razed
it May 2000.
Government of the day considered the cost of replacing the facility
as too big a burden, and opted for private investors that could shoulder
the weight under a Public-Private Partnership Scheme.
The plan completely transferred all development and operating risks
to the private sector, specifically on a Build-Operate-Transfer (BOT)
arrangement. The venture is first of its kind in Nigeria.
Biddings were received and the lot eventually fell on Bi-Courtney
Limited, a wholly indigenous conglomerate and the parent company of
Bi-Courtney Aviation Services Limited (BASL).
The contract was awarded in 2003, with a lot of the details shrouded in secrecy. From equity of the owners/proprietor and loans from six banks, the
terminal was completed and commenced operations on May 7, 2007.
While the domestic terminal seamlessly ran better than international
airports in the country and remains a pride of both friends and foes, it
has also been a subject of serious legal tussle between BASL and
FAAN/FG almost since inception.
And this battle, unfortunately still ongoing, has been described as a
low point and a bad advertisement for the privatisation plan of the
current administration.
The tussle is for reasons not unconnected with monopoly of the Lagos
domestic operations and years of concession on the agreement.
Part of the details, initially undisclosed, is that BASL will operate
the facility, as the sole domestic terminal in Lagos for a period of 10
to 15 years, with addendum for extension to 36 years as is the case for
most such investments around the world, given the huge capital
intensive nature of the venture.'
BASL had later sort to explore the 36-year concession window, to help
the investors recoup the heavy investment that was described as
“unprecedented” since the venture was first of its kind.
The Guardian gathered that though BASL had the sympathy and goodwill of the then governments (Obasanjo and later Yar’Adua-leds), it was not the same with their landlord, FAAN.
For FAAN, BASL was riding on undue preferences, courtesy of friends
within the government circle. While BASL maintains that the short-lived
Yar’ Adua administration had approved the 36 years concession period,
FAAN insisted that the initial 10 to 15 years agreement was sacrosanct.
It was amidst the conflict that FAAN awarded the construction of
General Aviation Terminal (GAT), Lagos, to rival MMA2 and contravene
part of the BASL/FAAN agreement, especially the monopoly clause.
When tested at an Arbitration Panel and law courts, up to the Court
of Appeal, the rulings were in favour of BASL, including the allocation
of the GAT to BASL and the endorsement of 36 years concession period.
The Guardian learnt that there is a subsisting judgment of N132
billion in favour of Bi-Courtney, due to FAAN’s “illegal” operation of
the GAT. This judgment was obtained in 2012 but still not obeyed till
date.
Amidst the no love lost scenario between FAAN and BASL, concerned
stakeholders have said that the Federal Government and Sirika should not
pretend that the road leading to the MMA2 success story was not mucky,
irrespective of who has the fault – BASL or FAAN.
The stakeholders and lovers of privatisation appealed for resolution
of the disagreement, so as not to set a dangerous precedence.
Former Director-General of the Nigerian Civil Aviation Authority
(NCAA), Dr. Harold Demuren, recently at a forum in Abuja said that the
engagement of Bi-Courtney Limited by the government would in fact, be
critical for the success of the planned airport concession.
Demuren said that there was need for PPP in aviation as it is obvious that government cannot do it all.
He said with the experience of the MMA2, Lagos, government has not shown good faith.
He added that, “such crisis in the MMA2 PPP must be resolved
immediately, or else investors would not invest their resources in the
Nigeria.”
For industry consultant and the Chief Executive Officer (CEO) of
Belujane Konsult, Chris Aligbe, government must put administrative and
legal frameworks in place before embarking on another concession
exercise.
Aligbe also acknowledged the important role of BASL in the concession
process, stating: “Bi-Courtney has shown an example of how airport
terminal could be effectively run with MMA2 even under unfair and
uncertain political atmosphere and lack of regulatory laws to govern its
concession.
“The terminal has epitomised just a little of what the private sector
can infuse if given the chance to participate in airport infrastructure
development and management,” he said
Journalist and expert in the aviation sector, Wole Shadare, agreed with the likes of Demuren and Aligbe on what to do.
Shadare said while he was not unaware of haters of privatisation, it remains the best alternative to transforming the sector.
But in doing so, he called for “political solution” to the BASL/FAAN filthy lucre, adding that leaving it unresolved is an ill wind that does no one good.
He said: “Political solution is needed now. BASL will continue to win but will FAAN implement the rulings?
“I’m a big supporter of privatisation because government has no
business in business. In government-managed facilities, every one just
collects salary and goes away. In the private sector, there is value for
money. That is why there is comfort, efficiency, security and so on at
the MMA2.
And that is what airports should look like. For me, there is
no problem with privatisation if it is transparent, fair and for good
services,” Shadare said.
