Chinelo Obogo, [email protected]
The Federal Government’s plan to concession some of the nation’s international airports has been described as a step in the right direction given the acute financial challenges it has had meeting some of its infrastructural obligations over the years.
But just as the Minister of Aviation Captain Hadi Sirika, reiterated government’s plan to put up Abuja, Lagos, Port Harcourt and Kano airports for private sector investment, some stakeholders are now up in gloves to challenge the policy.
Only recently and precisely on October 24, 2019, the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) wrote to the Managing Director of the Federal Airports Authority of Nigeria (FAAN), Rabiu Yadudu, expressing concern over the planned concession of commercial car parks, access gates and other revenue points of the Abuja and Lagos airports.
In the letter, they proposed that rather than hand over the revenue points of the airports to a private company to manage, FAAN should hand them over to the commercial department for at least three months after which a decision can be reached based on performance on revenue generation.
Daily Sun spoke to the National Chairman of ATSSSAN, Ahmed Danjuma to know why the union is opposed to the involvement of the private sector, stressing that ATSSAN members have always generated more revenue over the years than any concessionaire and as such, should be given the access gates to manage.
“We got information that the management wants to give out Lagos and Abuja access gates to a concessionaire to manage even though the Lagos access gates are already being handled by a concessionaire with the understanding that it will be fully automated. Abuja is fully automated with our members managing it but Lagos is not fully automated. We learnt that management is planning to give Abuja out despite the huge revenue we are presently generating. We are used to the government bringing in concessionaires to come and manage our revenue points even though we generate more revenue anytime we handle it.
“We were managing the toll gates but the management then gave it out to a concessionaire in 2003 or 2004 and the amount they agreed to be giving to FAAN was far less than what we were collecting when we were in charge. In Lagos, what FAAN is collecting from the concessionaire is N68 million monthly. If we were the ones managing it, we would have generated more revenue.
“The former concessionaire that took over the Lagos access and abandoned it after two or three years and disappeared. He stopped paying what was due to FAAN for over eight months. He sacked all the staff and went with over eight months’ remittances. Till date, the money hasn’t been recovered and has now been listed as bad debt.
“We raised this concern with the management and we told them that if they want to give out it out, our association should be given the right of first refusal, with at least three months probation to see if how much we can generate in revenue before going ahead with the private sector concession. Unfortunately, the minister we learnt has given approval for the project to continue without given us the the right of first refusal.
“ATSSAN’s concern is that the concessioning of these facilities may lead to more redundancies and job losses. You can’t expect the concessionaire to use FAAN staff, because every indication shows they have to bring in their own people. Moreover, they cannot even afford to pay staff what they are presently earning.
In Abuja for instance, we have four lanes and each lane is manned by one person working four shifts. If you now give the access gates out, what are these people going to do? We have been managing the gates for many years and have the experience, so I don’t know how a concessionaire can do better than what we are doing. Abuja is already automated so what do we need to concession it for?
“The traffic level has drastically increased, so the Lagos gates should be generating more than N68 million for FAAN by now. When we were in charge, we were collecting N100 per vehicle but now it has increased to N200 and that does not include the stickers that are now sold for N50,000 per vehicle per year with people rushing to get to them. So that instead of paying N200 every time you pass there, you can just buy one sticker for N50,000 and you won’t have to pay any other money till one year elapses. I can assure you that if we take over that place, we can make up to N100 million per month or more considering that almost every aspects of the airports have already been concessioned
Danjuma stated that the government may need to clarify the scope of the concession of the airports as most of the revenue points have already been given out to concessionaires with nothing left.
“When government said it wants to concession the airports the question I ask is, what will the scope of the concession. What part of the airports do they plan to concession? What is left in FAAN that has not already been concessioned? Virtually all our points of revenue collection have been concessioned to the private sector, so what is left? Is it the airside or the landside? Are you going to concession the runway? Landing and parking have already been concessioned. If you say you are going to concession the terminal building, all the shops there have already been given to private individuals. Even the car parks have been given to a private company to manage and the lease period is 36 years. If the government is making money from the different charges, why are our airports still underdeveloped?
“The truth is that political interference is killing the aviation industry. We have been running MMA for a long time and statutorily, we are supposed to remit 25 percent of our revenue to the Federal Government after removing overhead and maintenance cost. In the maintenance department, we have very experienced people who know the job well, but there is always political interference that prevents them from doing a good job.
“For instance, if my conveyor belt fails and I send my engineer to determine what it will take to repair it, because most of our capital projects have been taken over by the ministry, I will have to write that we need a conveyor belt. Then the minister will call his brother John and tell him to go and supply conveyor belt. Then John will come and give me an inferior belt and after two days, the belt will spoil and I won’t be able to write to the minister again demanding for another belt,” he says.
Mrs. Henrietta Yakubu, the General Manager, Corporate Affairs for FAAN admitted, that the Director General was in receipt of the petition written by union and would make a policy statement in due course.
“The letter is with the DG so I really can’t say anything about it. He will be the one to come up with the management position on the matter. I can’t really give any feedback until he decides what will be done,” she said.
Experts say concession, way forward
Meanwhile aviation security expert, Captain John Ojiukutu told Daily Sun that members of ATSSAN interested in the concession should withdraw their services from government agencies, form a company and bid for the concession like any other and should not expect to have it on platter of gold.
“Concession does not mean collection of revenue; it goes with progression of development of the facilities or infrastructure that is or are giving for concession. If the unions want to participate in the exercise, let them participate in the biddings like others interested and not expect to have it on platter of gold. Those in the union who want concession should withdraw their service first, form a company that would bid for the concession of facilities or infrastructure of their choice.
“The union may have a point that the access gates could generate more revenue than it is doing presently, that should not be too difficult to confirm with the technology available to count the number of vehicles that pass the gate per hour or per day.
“For instance, the toll gate has about 2,000 vehicles per hour; with that, one can calculate the number per day, month and per annum to evaluate the earnings. There should be no quarrel or doubts between the union and FAAN management about this. If the union feel strongly they can do better, they should withdraw their service from agencies, form a company and bid for the concession of the gates. Again, concession is not only about revenue collection but would include the progressive development of the facilities or infrastructure for concession.
“Globally, all non- aeronautical facilities in airports are given out for concession and they include: passengers and cargo buildings including aircraft packing areas; car parks and toll gates, among others. These are not regulated under the international practices or standards, except the runways, taxiways and their associated lightings and landing aids; aeronautical infrastructure, navigational aids and communication, etc. These are commercialised but still fall under state safety and security regulations based under the global best standards and ICAO practices. If FAAN is not generating more than one billion annually at the Lagos toll gate, I will be glad to generate that much for FAAN annually,” Ojiukutu said.
Another aviation expert, Alex Nwuba, also supports concessioning of the facilities, insisting that revenue should be maximised. “Let it be put up for bid by all the parties with one condition to meet the minimum bid amount or supplement the shortfall before deductions. These revenues belong to the Nigerian people and should be maximised for the benefit of the Nigerian people. Since there’s a challenge, commercialise that unit and let the private sector bid for the job,” he said.
I will be glad to generate that much for FAAN annually,” Ojiukutu said.
Another aviation expert, Alex Nwuba, is also in support of bidding, insisting that revenue should be maximized. “Let it be put up for bid by all the parties with one condition to meet the minimum bid amount or supplement the shortfall before deductions. These revenues belong to the Nigerian people and should be maximized for the benefit of the Nigerian people. Since there’s a challenge, commercialise that unit and let it bid for the job since the impression has created,” he said.