Airport concession skewed towards FAAN – Unions

*Minister of aviation, Mr. Hadi Sirika

Aviation unions have continued to protest against the proposed ceding of four international terminals and related services to concessionaires under a public-private partnership arrangement.

Recall that the ministry of aviation had recently invited bids from reputable airport developers/operators/financiers/consortia for pre-qualification in respect of the concession ofNnamdi Azikiwe International Airport Abuja, Murtala Muhammed International Airport Lagos, Mallam Amınu Kano International Airport, Kano and Port Harcourt International Airport, Omagwa.

But the National Union of Air Transport Employees (NUATE), Air Transport Senior Staff Services Association of Nigeria (ATSSSAN), Association of Nigerian Aviation Professionals (ANAP) and Nigeria Union of Pensioners (NUP) have protested against the concession plan saying it is skewed towards the Federal Airports Authority of Nigeria (FAAN).

In a statement issued in Lagos, the unions said the profit sharing formula in the proposed concession would be disadvantageous to FAAN despite bearing major costs including the over $1 billion loan repayment utilised to build the terminals.

“The economics of the concession do not add up at all. While the profit sharing ratio is proposed to be 60:40 in favour of the concessionaire, the disadvantaged FAAN is made to bear the repayment of the $1 billion loan utilised to build these terminals, continue to pay emoluments of its staff and pensioners and return 25 per cent of its internally generated revenue (IGR) to the FGN under the Fiscal responsibility Act and also maintain the remaining the remaining 18 airports in Nigeria.

“Unless through some abracadabra, there exists no possibility of FAAN meeting even a quarter of the above enumerated obligations under this obnoxious sharing formula,” the unions said.

The unions maintained that FAAN would not be able to meet even a quarter of the obligations.

They also stated that the basis of granting the concessionaire the lion’s share of 60 per cent of the profit was unclear.

The model of concession, according to the unions, could at best be summarised as take, operate and transfer which further translates into reaping without sowing.

The unions said no case had been established for the concession of any of the airport terminals stressing that the terminals earmarked for concession are brand new 21st century terminals which have no need for significant investment in the next 25years, a fact established by the online business case.

They said FAAN’s unresolved litigation on the concession was in the public domain.

“A cursory look through the outline business case shows that the promoters are unsure of the concept to adopt between BOT and rehabilitate, operate and transfer.

“This apparent confusion to us stems from an established fact in these particular terminals that there is neither a thing to build or rehabilitate.

“This apparent confusion to us stems from an established fact; in these particular terminals, there is neither a thing to neither build nor rehabilitate.

“In that case, if there should arise a need for Expansion in the terminals (which is not envisioned in the next 25 years) then the Green Field concession option would have been more applicable,” they said.


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