Delta State gives out Asaba Int’l Airport for 30-year concession

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The Delta State government has signed a 30-year agreement with the Asaba Airport Company Limited to manage the Asaba International Airport.

The move, according to the government, is aimed at making the airport run profitably and contributing 2.5 per cent yearly revenue to the state during the concession period.

At the agreement signing ceremony between Delta State government and Asaba Airport Company Limited in Asaba recently, the state governor, Dr. Ifeanyi Okowa, said the concession was motivated by the desire to have the critical facility developed into a full international air travel destination and profit-oriented asset for the host state.

Although the consortium shall be exempted from tax payment for five years, Okowa said “the concessionaire shall pay to the state an upfront fee of N1 billion on or before close of business on the 15th day following the signing of this agreement.”

The governor said ‘there shall not be any publicly or privately-owned new airport, whether green field developments or expansions in Delta North Senatorial District of Delta State, during the concession period.

“The concessionaire shall at all times be under an obligation to maintain an employment ratio of 20 per cent of its staff for the operation of the airport comprising indigenes of Delta State.

“The concessionaire shall undertake the development of mandatory capital projects, and they shall be completed within a period of three years from the effective date of the transaction.

“The mandatory capital projects include Airport/Terminal Facility, Cargo Facility, Maintenance, Repair and Operations (MRO) Facility, Tank Farm Facility, Industrial Park and Office Facility, and Hotel and Conference Facility,” he said.

Continuing, Okowa said: “Considering the cost alone, no state government can run an airport the way it should function to bring the maximum benefit to the people. So, we have decided to follow this route.

“I want the Delta people to know that this concession and the signing ceremony with the concessionaires today are in the best interest of the Delta people, and I hope that other States with state-owned airports will follow suit,” he said.

The governor said while airport upgrade was ongoing, the government had since 2015, begun the transparent processes to bring in the private sector to take up the facility and transform it into a regional hub.

He said following a rigorous bidding process, the state settled for a consortium of concessionaire operators/ investors “with the technical and financial capabilities to redevelop, finance, design, operate, maintain and manage the Asaba International Airport for the benefit of Deltans”.

The master concessionaire and sub-concessionaire model adopted for the airport produced FIDC-Mendes Consortium as the major shareholder, with technical partners like Air Peace as the anchor airline and MRO operator while Multifreight Cargo and Logistics will manage the cargo aspect.

Others are Arbico Construction Company to develop the business park, hotel and convention centre; Rainoil Limited and Cybernetics Limited to develop tank farm and aviation fuel supply, and Quorum Aviation Limited to develop and manage the private jet and helicopter terminal.

The concessionaires have the mandate to invest N28 billion in the mandatory capital project the next three years and run the Asaba International Airport for an initial 30 years period, having paid the State government N1 billion as an upfront fee.

Speaking at the event, the managing director of Asaba Airport Company Limited, Mr. Adebisi Adebutu, said the FIDC Mendes Consortium emerged the preferred bidder after five years of rigorous concession process.

He assured that his company was ready to deploy their skills and experience to make the airport the best in the country.

He said the primary goal of the company was to introduce  international cargo services through the construction of a modern international cargo terminal as well as development of an Airport hotel facility.

He said the immediate work would be to modernise the airport through the terminal upgrade and laying of optic fibre for internet services while the long-term project would be to build a cargo facility, retail and leisure centres, airport hotel and creation of an airport city.

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