FAAN to oversee management of airports after concession – FMA

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*Minister of aviation, Mr. Hadi Sirika

The federal ministry of aviation has said that the Federal Airports Authority of Nigeria (FAAN) will continue to play the broad role of overseeing the management of Nigerian airports after concession while the concessionaires will be responsible for the day-to-day management of the terminals.

The ministry said in a statement issued in Abuja that airports to be given out to concessionaires are the Murtala Muhammed International Airport – Lagos, Nnamdi Azikiwe Airport, Abuja; Port Harcourt Airport, Omagwa and Mallam Aminu Kano Airport, Kano.

“The federal government as the owner and partner to the concessionaires will make strategic investments in these assets alongside others from the private sector and development finance sector.

“Any investment contributions made by the federal government of Nigeria will be based on robust medium to long-term investment and expenditure plans to be developed by the concessionaires with oversight from the ministry of aviation,” it said.

The ministry further said that it was not considering putting up all the airports for concession since, according to it, “infrastructure concessions are very complex and sensitive programmes.”

“They often requiring years of planning and preparation to secure the requisite inputs and approvals from the relevant regulatory bodies.

“We are starting with the most strategic assets because successful delivery of this concession programme will give all stakeholders the confidence required to consider other possibilities in the sector,” it said.

It further stated that the non-aeronautic assets of the airport –passenger and cargo terminals – of the four airports will be up for concession.

The passenger terminals consist of retail spaces, waiting and seating areas, airport and airline lounges, baggage collection, check-in counters as well as administrative offices while the cargo terminals comprise the facilities between the point of entry and up to loading and offloading points, including administrative offices within cargo facilities.

On the issue of tenure of the concession, the ministry said it was considering 20-30 years.

“Infrastructure concessions of this nature come with a significant financial obligation which any responsible concessionaire will no doubt be keen to recoup.

“To this end we envisage a minimum of twenty (20) to thirty (30) years for the programme, which may be extended depending on performance and Nigeria’s best interests. That said – the duration is not set in stone and will be subject to negotiation and then final approval by the federal executive council,” it added.

On why the federal government has not considered full privatisation of the facilities, the ministry said: “The passenger and cargo terminals of each airport, although separated for the purpose of the concession programme, are within the various federal airport complexes and as such, are of tremendous national importance from an economic and security perspective.

“We believe it remains in Nigeria’s best interest to maintain ownership for this reason. Furthermore, as is often the case with large, multifaceted infrastructure developments, the scale of investment required to build the airport complexes envisaged in the aviation sector roadmap will require the support of the Sovereign Wealth Fund in a way that an outright privatisation will not allow at this time.”

On whether the federal government would give preference to indigenous investors in the concession programme, the ministry said: “We are focused on driving a transparent and competitive process that will deliver the very best long-term partner(s) and outcomes for Nigeria.

“There are not many companies with the qualifications, experience and financial resources required to run assets like the ones up for concession. S whilst we do expect Nigerian companies, or consortiums comprised of groups of Nigerian investors, we expect the process to receive significant attention from the international community, perhaps in partnership with qualified and capable local companies and investors.”

On the issue of conflict between this concession programme and the terms of the EXIM Bank loan agreement entered into between the federal government and China which has seen  China Civil Engineering Construction Corporation (CCECC) build new passenger terminals in Lagos, Abuja, Kano, Port Harcourt and Enugu airports, the ministry said: “There is no conflict. “China Civil Engineering Construction Corporation (CCECC) was contracted to deliver a number of infrastructure projects throughout Nigeria in 2013.

“The passenger terminal development works are a small part of this, and the federal government has every intention to service its obligation.”

On the implication of the concession programme for national security, it said: “There are no national security implications.

“The Federal Airports Authority, Nigerian Civil Aviation Authority, Nigerian Aerospace Management Agency and all other public authorities tasked with collaborating with the nation’s security apparatus will continue to perform their duties in close collaboration with the concessionaires.

“All relevant agencies have been carried along including the national security advisor.”

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