By Chinelo Obogo [email protected] 07064781119
Assurances by the Minister of Aviation, Hadi Sirika, that the proposed concession of four international airports would bring immense benefits to the industry has been debunked by Danjuma Ahmed, a member of the Project Delivery Team (PDT) set up by the Federal Government to spearhead the aviation roadmap. Ahmed who is the chairman of the Air Transport Services Senior Staff Association (ATSSSAN), Federal Airport Authority of Nigeria (FAAN) chapter, says the Outline Business Case (OBC) for airports concession is empty and without substance because it doesn’t address very fundamental issues like airport development and staff welfare
Concession business plan faulty
The Project Delivery Team (PDT) committee was inaugurated in September 2016 and has since then, held over 21 meetings for not only concession, but also for the aviation roadmap which includes the agro allied cargo terminals, national carrier, and MRO among oteher others. We have two categories of committees; the Project Steering Committee where you have representatives from the different agencies like the Managing Director of FAAN and other top people.
7 the National Assembly on the issue of concession, they were all shocked because till now, there has been no clarification from the Ministry of Aviation on the issues we raised because even the Outline Business Case (OBC) is empty and without substance. It was not done well. The portion where the OBC talked about labour issues was just addressed in the last two pages and they did that without even consulting any of the labour leaders. The OBC says the concessionaire will take charge of all FAAN staff for the first two years and after two years, they have the right to let go of those they want to let go off and retain those that they want to retain.
What the concessionaire will do is to send everyone away after two years because no private company will come and take over the responsibility that FAAN is carrying because it is only the government that has the ability to do it. The agency has 8100 staff when we can use about 3500 to run the system but because it is the government, they have to employ Nigerians to reduce unemployment.
In Murtala Muhammed Airport, we have over 50 Assistant General Managers (AGMs) in the Aviation Security (AVSEC) department, which businessman will pay all of them when he can take someone on level four or five to do the same job for you? That is why we disagreed when the Minister of Aviation kept saying that no one will lose his job. When the concessionaire takes them and after two years they say they should return to FAAN, where are they going to work? There are so many issues that have not been addressed that is why we cannot move forward.
Tenure
The proposed tenure of between 20 to 30 years is not much of a problem because major PPPs always have that tenure but some could decide to extend it to 45 or even 100 years like India did, depending on the performance. One major issue they government also missed is that that they said the scope of the concession would be for only the international terminals; in Port Harcourt, they said it is the international and domestic terminals, in but in Lagos, they dodged domestic because of Bi-Courtney. The concessionaire will now enter the terminal building and in Abuja, there won’t be any expansion till 2045, so what the concessionaire would do is to enter the terminal building, operate for 30 years and leave without adding anything.
The OBC said there would be no need for expansion because the facility on ground is enough to accommodate any increase in traffic. So, why are we concessioning if there won’t be any expansion or major development? The only thing the concessionaire would do is to change little things like bulbs or maybe buy conveyor belt or repair the escalator. What they would just do is to enter a brand new terminal, make their money and go without carrying out any expansion since what we already have on ground can accommodate much traffic. For Kano and Port Harcourt, the document said that they would be no expansion. They can decide to do some adjustment at the General Aviation Terminal (GAT) in Lagos but the document doesn’t even clearly state what type of expansion that would be done, so it is the choice of the concessionaire because nothing was specified in the document. I challenged the Transaction Adviser and asked him if he was working for Nigeria or working for the investor. We paid you and this is the best you could come up with, selling our national assets to international investors.
No one knows everything and we are not talking just because we want to. If the government says they want to shut down the airports, it is their prerogative but in doing that, the will have to consider the fact that there are people who earn their livelihood from working there and we need to take them into account.
Other options
There are other options to PPP. You can do a managing contract which has a time limit of five years and the concessionaire would give a projection of how much revenue he will generate. But the government doesn’t want to hear about that one. We then suggested that they should corporatise and allow FAAN to be autonomous and go and look for funds in the capital market. In this situation, Nigerians can invest but they also don’t want that. They want concession because its ready made.
What the OBC says is that in the first year of the commencement of the concession, all existing contract will still be maintained until the expiration of that contract between them and FAAN, then the concessionaire will negotiate.
Four airports would be concessioned while government insist that the remaining would be managed by FAAN but there is no money to manage it. The FAAN act is clear about going into concession with any company; it is the responsibility of FAAN to identify what would be concessioned and drive the process to its logical conclusion and not the responsibility of the Ministry of Aviation. But the ministry has taken over the powers and are now the ones driving it because they are the ones that created the aviation roadmap but it is expected that at least the ones that concern FAAN should be driven by FAAN. So what the government is doing is in conflict with the FAAN Act because it is clear about FAAN going into business with any other party and we made this clear to the National Assembly. But the Ministry of Aviation is saying that investors will have more confidence when they are dealing directly with the government rather than an agency. They also argued that as the supervisory ministry, they have the right to spearhead any project but what they are doing is in contravention to the FAAN Act which established the agency.
What aviation unions plan to do
If this concession goes on even with all its deficiencies, we as the unions will insist that what is due to us be given to us before anything is done. There would be loss of jobs if the concession is done but before that is done, we would have to negotiate and we would dictate the terms. One of the things we would demand from the government is redundancy because they are the ones that said that they don’t want us.
In the course of that, if we realise that anything is going wrong, we would take the matter to court so that what is due to us must be settled before any action takes place. We will make it clear that we are 8100 members of staff in FAAN and if they have the capacity to pay us, fine, but nothing can be done without settling us first.
National carrier
As far as I am concerned as a member of the PDT, we haven’t gone anywhere with the plans to set up a national carrier. We haven’t even seen the OBC of the national carrier. An inception report needs to be submitted to the PDT and it if it is approved by all of us, then the OBC will be submitted. As I speak, I dong even know who the transaction adviser for the national carrier is because the first one was sacked. Prior to the road show that was held in the UK, the minister engaged a small company as transaction advisers but immediately after that, they were suspended. However, the Minsister reportedly said that there is an OBC for the national carrier and they are understudying it and would take it to the Federal Executive Council for approval but sincerely speaking, the PDT haven’t seen any document. However, it is the prerogative the government to decide on whether to continue with the committee or not.
National carrier can be successful
A national carrier can be successful because it will majorly be private sector driven. The process is not cumbersome. If we get the OBC, we can study it within three weeks, make our recommendations and they can take it to FEC and after a while they can commence the bidding. The bidding should not take more than three months. So it is possible to have a national carrier within six to seven months.
However it will be better to designate an already existing airline as a flag carrier. We have airlines like Air Peace that have the capacity. Having a flag carrier is should be a priority rather than injecting public funds into a national carrier.
Forthcoming ATSSSAN election
ATSSSAN as an entity has no issues but the branches under the body like FAAN, NAMA, NCAA, Arik, Bi-Courtney, AIB are the ones having issues and it is the responsibility of the leadership of the body to go into these agencies, look into their problems and find a way of resolving them. ATSSSAN has been in the forefront of leading other unions in the industry but the last four years haven’t been as good as it should be because of the national leadership. I am contesting for the national President of the body because we have very serious issues that need to be resolved and only a good leadership can achieve that. The leadership has been so weak when we are supposed to be taking the lead and not allow the junior staff overshadow us.