The Federal Government’s plan to concession Nigeria’s major airports have since set it and aviation unions on a tortous war path with the Nigerian Labour Congress (NLC) fully in support of its affiliate.
On Monday, August 31, the unions had protested at all the airports across the country, vowing to shut down operations if the Minister of Aviation, Captain Hadi Sirika, goes on with the concession project. The protest beganshortly after Sirika announced at the reopening of the Akanu Ibiam International Airport runway in Enugu, that the facility had been listed among those to be concessioned.
At the heart of the unions’ grouse is the fear of job losses in National Union of Air Transport Employees (NUATE), Air Transport Services Senior Staff Association (ATSSSAN), Association of Nigeria Aviation Professionals (ANAP) and the Nigeria Union of Pensioners (NUP) which they believe would be inevitable if the concession goes on as planned. They had since accused the Federal Government of not being transparent with the programme said to be shrouded in secrecy.
Unions make case
As at June 30, the unions madebare their grouse in addition to some of the contentious issues they say must be addressed before further discussion on concession would be made.
The unions said: “The Minister of Aviation, Captain Hadi Sirika, on Thursday, June 25, 2020, brandished the Certificate of Compliance purportedly issued him by the Infrastructure Concession Regulatory Commission (ICRC) confirming that had complied with all needed requirements to proceed with the process of concession for the four international airports in Lagos, Abuja, Kano and Port Harcourt. Therefore, the Minister will now proceed to seek the approval of Federal Executive Council (FEC) for his proposed Outline Business Case (OBC) for the project.
“But it is highly regrettable that both the Minister and the ICRC are engaging in a ruse, and are indeed taking Nigerians for a ride. We can say with authority that everything so far about the issue of concession for the four airports have been single handedly decided by the minister himself and the ICRC has not carried out any due diligence on to the concession exercise. If it did, the Commission would have discovered wide gulfs of deception in the exercise.
“For example, while the Project Delivery Team (PDT) – which includes the ICRC – was still discussing the issue of Transaction Adviser (TA), the Minister of Aviation was on air announcing the approval of FEC of a TA and his fees. Both the TA and the fees were apparently decided solely by the Minister. Up till date, the PDT has not been allowed to take a position on the matter, its effort in that direction being frustrated surreptiously.
“Also, at the last meeting of the Project Delivery Team, in late 2019, it was decided that the airports concession issue be degraded to the bottom of the list of aviation priority projects while upgrading the national carrier, aviation leasing company, and the aircraft maintenance and repair organisation for quick delivery. In addition, the ICRC was requested to provide the required components for the OBCs for the upgraded projects which the Commission promised to provide at the next meeting. That next meeting is yet to be called till date. But now, the same ICRC has been said to have issued a Certificate of Compliance (C of C) to the minister for the Outline Business Case for concession of four international airports. So we ask, who is fooling who?
“For the records, the Project Delivery Team comprises about five Federal Ministries, including Aviation and Finance, and other agencies including FAAN and the ICRC itself, as well as two representatives of our Unions. Unfortunately, the minister completely sidestepped the team and has gone ahead with his own programs as determined by himself alone. Our Unions have decided that we shall have to review our membership of the PDT if this type of public deceit and shenanigan continue.
“For now, however, being a component part of the Team, we completely disown any false reports of the Team there might be, upon which the ICRC might have erroneously based the issuance of the said C of C. We avow hereby that the said Certificate is obtained on faulty grounds. Our Unions are vehemently opposed to the selective concession of Nigeria’s four major international airports. Privatisation, of which concession is a form, has turned Nigeria into a huge theatre of the absurd. The Nigerian experience in privatisation leaves a very sour taste in the mouth. Check it out: Ajaokuta Steel Complex, steel rolling mills, NITEL, PHCN, and so many more. All tell tales of squander and plunder, with nothing to recommend that method of business to any Nigerian government.
“The story of the failed privatisation of the then national carrier, the Nigeria Airways which took the airline’s life is still reverberating since 2004. The concession of MMA2 to Bi-Courtney remains the biggest example of how not to concession an airport. All ongoing concessions of economic activities of FAAN have only resulted in losses in revenue to the Authority.
“The decision to concession four out of 22 airports is the height of subterfuge. These four airports are the live wire of Federal Airports Authority of Nigeria (FAAN), and the rest of the airports depend on the four for sustenance. As a matter of fact, without the four, the other airports will die automatically. Therefore, to concession these four airports is to close up FAAN completely. But considering the basis of creating these other airports which is the public interest of opening up the entire country, even nationwide development, and national unity, one would wonder the rationale behind the idea of sacrificing these undeniably noble goals on the altar of a superficial notion of private investment.
“Of serious concern is the fact that the airports concessioning exercise is being directly carried out by the minister, whereas he does not run any airport, nor does the FAAN Act grant him any powers to concession FAAN assets. He has completely usurped the functions of the Management and the Governing Board of the Authority, as such, he has unlawfully arrogated to himself the powers to enter into agreements in the place of FAAN. This is a serious infraction; a travesty and an anomaly.
“The joint Senate and House of Representatives Committee on Aviation of the 8th National Assembly held a public hearing on the matter, and the Committee, based on the weight of several unanswerable questions, resolved to ask Senator Sirika to step down the question of airports concession. But their opinion was ignored by the Minister.”
Unions proffer alternatives to concession
The unions had given alternatives to concession, suggesting that new investors could deal on fresh ventures which includes construction of new runways, terminal buildings to be operated for a specified period of time and compete with the existing airports before handing them over to government.
A second option they suggested is that FAAN can be corporatised whereby the Federal Government shall retain 45 per cent equity share while the remaining 55 per cent is broken down for public acquisition. Another option is the complete autonomy of FAAN without interference from the Ministry.
Aviation ministry defends concession
In response to the unions letter, the Director, Public Affairs, Ministry of Aviation, James Odaudu, posted a lengthy statement on the official Facebook page of the ministry on July 16, saying the ministry does not approve infrastructure concession programme as the role is independently played by the Infrastructure Concession Regulatory Commission (ICRC Establishment Act 2005). It said the ICRC is Nigeria’s regulatory agency responsible for regulating all infrastructure concessions and Public-Private-Partnerships in Nigeria.
“The ICRC has approved and issued an Outline Business Case (OBC) Compliance Certificate for the further development of a concession programme focused on the passenger and cargo terminals in four airports only. These airports are Murtala Muhammed International Airport, Lagos, Nnamdi Azikiwe Airport, Abuja (International and Domestic), Port Harcourt Airport(International and Domestic) and Mallam Aminu Kano Airport (International and Domestic). These assets do not include airside assets such as runways, navigational infrastructure or ground handling.
“ICRC’s rigourous process requires all initiators of concession programmes to procure independent Transaction Advisors(TA) to provide expert advice on the viability of the proposed transactions, which is used to inform the development of an Outline Business Case review by ICRC. The procurement of these TAs is regulated by the Bureau of Public Procurement and guided by the Public Procurement Act 2007.
“This process led to the appointment of a team of reputable internationally recognised advisors that include Infrata, Denton, Proserve and Templars. The certification of the OBC by the ICRC means that the transaction is thus viable and has taken a myriad of factors into consideration. This OBC certificate, with all supporting documents, will then go to the Project Steering Committee(PSC) before the process moves into the public procurement phase which will involve a Request for Expression of Interest (RFQ and then a Request for Proposal (RFP). Throughout this process, all key stakeholders will remain engaged by the Ministry and the relevant agencies under it.
“The misleading press statement put out by some individuals and special interest groups purporting to be acting on behalf of the various associations wrongly ascribes approval powers to the PDT. This is inaccurate and intentionally misleading. The PDT does not have any approval powers or responsibilities. Its function is as an advisory and implementation support group.
“Concessions and public-private-partnerships differ from privatisation programmes. In a concession or PPP, the assets remain the property of the government and so are subject to the regulations and processes already outlined. Private programme, which is not at all what this programe is, are driven by the Bureau of Public Enterprises (BPE) and involve a full or partial sale of equity in the asset, thus a transfer of ownership to private parties,” Odaudu said.