By Chinelo Obogo [email protected]
AS Murtala Muhammed International Airport (MMIA), a premier airport serving Lagos and most South West states, opened its new terminal after commissioning by President Muhammadu Buhari on March 22, 2022, indications are that the Federal Government may be reaping more revenues from increased operation at the facility. At that event, President Buhari said, “This improvement will increase airport operation and management services to about 14 million passengers per annum. With the positive multiplier effect to create 3000 direct and indirect employment opportunities for our youth.”
This was followed by the inspection tour of the facility by the Minister for Information and Culture, Lai Mohammed, on August, 22, which was facilitated under a bilateral arrangement agreement between the Federal Government and the Peoples Republic of China.
Though plans are ongoing by the Federal Government to concession five of the major international airports, the Federal Airport Authority of Nigeria (FAAN) still manages about 21 airports across the country and of these, the Murtala Muhammed International Airport, Lagos generates the highest revenue, followed by the Nnamdi Azikiwe International Airport, Abuja.
Will the new terminal be a success?
On whether the project would succeed, the Authority recalled that in 2020, the MMIA, Lagos recorded 58 per cent of the total revenue generated by 22 airports across the country, while Nnamdi Azikiwe International Airport, Abuja followed with 21 per cent.
The Port-Harcourt International Airport, accounted for 4 per cent of that uyear’s revenue with Mallam Aminu Kano International Airport (MAKIA) Kano 4 per cent while other airports together recorded 13 per cent.
According to Managing Director of FAAN, Capt. Rabiu Yadudu, the Authority remitted N16.7 billion to the Federation Account as contribution to the Consolidated Revenue Fund at the end of December 2021, for the year 2021 alone, in spite of the effect of the pandemic during this period. This implies that in 2021, the Authority generated about N67 billion, given that it is required to remit 25 percent of its annual revenue.
The Authority revealed that Lagos generated 58 percent of the total revenue in 2020, an indication that in 2021, it may have generated over N30 billion in revenue. If this amount is the minimum of what is generated from Lagos airports annually, the indication also is that it could be doubled withe commissioning of the new terminal.
This would not be farfetched as the new terminal comprises a four-storey main terminal building, three-storey finger building, two-storey cargo terminal building, 82,925sqm apron, and external and ancillary works. It also has about 60 sets of check-in counters and six boarding bridges and is built on a land mass of approximately 56,000 square metres. Other facilities in the terminal include five baggage collection carousels, 16 immigration desks at arrival, 28 immigration desks at departure, eight security screening points, two food courts, four premium lounges, 22 guest rooms and spa, 16 airline ticketing offices, visa on arrival and port health facility, as well as praying area, more than 3,000 square metres of duty-free space, approximately 5,000 square metres of lettable utility space.
The government has also designated Lagos, Abuja, Kano and Port Harcourt airports as free trade zones in which Customs duty does not applied. It has also approved the removal of VAT on all forms of shared transportation including air transportation and exemption of commercial aircraft and spare parts from VAT payment.
During facility tour, the Minister said the project started in 2013 and was completed by the present administration in 2022 under a bilateral agreement with the Peoples Republic of China. He said it was not built to replace Terminal one but to complement it and that’s why we were told that you could check in at Terminal one and board at the other. So there is a handshake between the two Terminals.
“What you have seen at the Terminal in Lagos is replicated in four other terminals across the country, Abuja, Port Harcourt, Enugu and Kano. This edifice, and the others like it, is a testament to the commitment of the Buhari Administration’s unprecedented infrastructure development covering roads, bridges, rail, water dams, sea ports, etc. On the air bridge ramp and the interface; one of the things the terminal manger told us is that not only is this airport in use but you can actually board your flights and check-in here. You can arrive in one terminal and pick your luggage in another terminal and this has taken care of the issue of interface between the two terminals.
“I was here 40 years ago when the first terminal was commissioned. There is a time gap between commissioning of an airport and when it becomes operational. You know aviation is not forgiving of any mistake. So we need to test-run and be extremely certain that every equipment is working optimally. The beauty of it is that this airport has become operational. You can come in here and continue to various parts of the world. When the old airport was commissioned, it took quite a while for it to become operational. The new international terminal is not to replace the old one but to complement it. It is gradual, and very soon this airport will be very busy. You can see that terminals are not used only by airlines. We have restaurant operators, banks, foriegn exchange operators etc and you have to screen people over and over again before it becomes operational.“I can assure you that the issue of maintenance up to the cleaning of the airport have been taken care of. As a meter of fact, we refuse to compromise. At the beginning some people said we should give the maintenance of the airport to local companies but I said what is important is safety and security. Gradually, when we give these maintenance to competent people who will also be oblige within a certain time to transfer technology to local companies. As at today, best in the world are taking care of the maintenance of this airport. On the old terminal, When you build a terminal for 40 years for 200,000 passengers and today it carries about 8 million passengers. This is why there is a need for this terminal to complement the old terminal and take off some of the load from there. This terminal is built to accommodate and process 14 million passengers annually,” he said.
More airlines to commence operation. A design problem of apron placement led to delays on the project and several buildings had to be demolished due to these design flaws, including the regional office of the Accident Investigation Bureau Nigeria (AIB-N). Due to the space constraint, international carriers continued to fly in and out of the old Terminal.
At the moment, on Air Peace is carrying out international operations from the new terminal. Capt. Yadudu who was at the facility tour said about eight airlines had indicated interest in using the terminal but that by September 1, five airlines would commence operations there fully. “On the area of the operations of airlines, aviation is a very sensitive business. We will rather take our time than to start on the wrong footing and that does not mean nothing is being done. From the 1st of September, which is in the next two weeks, five more airlines are scheduled to start operations in the new international terminal. A lot of integration has to be done. More than eight airlines showed interest but five are starting from 1st of September from the international terminal.
“There is a connecting area with the old terminal where passengers are move from one terminal to the other. We need to have the aircraft to be able to park at one side. The second part is that FAAN is working with the federal government to ensure the clearing of obstruction so that there will be accessibility for the planes to park in that area.
In terms of the businesses, some of these business of duty free is an international business and it takes time for them to be able to come, especially when you are coming to a government operated area, there are a lot of due process. Most of the basic ones are there such as the BDCs, the restaurants, pharmacies and these are the essential ones. In the next few weeks, we will have some of the duty frees start up,” he said.
He also spoke on allegations that FAAN is in the habit of not respecting concession agreements signed by it. He said: “The issue on FAAN not respecting agreements is not true. An example is FAAN has millions of agreements across Nigeria over the years. We may have problem with one or two, so it will be very unfair to define FAAN by just one or two agreements. Secondly, I do agreements, there may be disagreements and when this happens, issues can be resolved professionally. If anyone has an issue with an agreement with FAAN and you have to go to the media, then go to the media with facts. Don’t go with a slogan. Resolution means you go to court and come to FAAN. If you have to go with the media, then go with the facts not the slogan.”
On plans by the government to repay loan used in building the terminal, the Director General of the Nigerian Civil Aviation Authority (NCAA), Capt. Musa Nuhu, who was also at the facility tour, said: “It is not actually taking the money that is the problem but what we do with the money. When loans are used and invested in infrastructures such as this, it means the loans are wisely used. The major problem is that the tax to GDP ratio is so low because most Nigerians don’t pay tax,. So, I want to appeal to Nigerians to help government in paying their taxes, then there will be reduction in deficit that we are experiencing.”