By Dickson Omobola
About a month ago, social media erupted over reports that the Federal Government planned to concession the Akanu Ibiam International Airport in Enugu for 80 years.
The purported long-term agreement, which came as a shock to observers, also elicited jeers from interested quarters.
Amid the protests that greeted the contended deal, the Ministry of Aviation and Aerospace Development refuted the news, saying nothing of such existed.
The federal government, however, admitted that because many of the country’s airports were running at a loss, like apples among oranges, it is considering proposals for the concession of five major airports.
“While it is true that the federal government is considering proposals for the concession of five major airports, this is a proactive measure to ensure these vital facilities can meet and maintain international standards, given the increasing financial demands of their operations. At this stage, prospective concessionaires have indeed submitted various proposals, including different durations for the concession,” the ministry said.
Why concession?
Like the ministry stressed in the rebuttal statement, “many of our airports are at present running at a loss, so they have to be subsidised,” most Nigerian airports grapple with dilapidated infrastructure and poor services due to their inability to generate enough funds to optimise operations when compared to their international counterparts.
Unlike aerodromes in North, East and even West Africa, many Nigerian airports are an eyesore and a drainpipe on the finances of the Federal Airports Authority of Nigeria, FAAN, a situation that has led to persistent calls for their concession by industry stakeholders.
Recently, the outcry grew when the Managing Director of FAAN, Mrs Olubunmi Kuku, revealed that only three out of the 22 airports under FAAN’s management are profitable and contribute largely to the growth of the aviation sector.
Kuku said that 19 of the nation’s airports are being subsidised by FAAN as they do not get passenger traffic commensurate with their operational cost.
To buttress this, Saturday Vanguard observed that of 20 airports across the country, just those in Lagos, Abuja, Kano and Port Harcourt generated 96.4 per cent of FAAN’s total revenue of N358.2 billion in 2024.
16 other airports scattered across states, however, contributed as little as 3.6 per cent to government coffers, even though the Murtala Muhammed Airport in Lagos alone accounted for 67 per cent of the N358.2 billion.
Questions
Against this backdrop, industry analysts have called into question the concession model that Nigeria intends to operate as it seeks to reduce the burden of FAAN.
While some have reservations about the hybrid concession model where concessionaires of profitable airports will develop two or more less viable airports, others deem the approach unworkable.
Sharing their views with Saturday Vanguard, they said any concession agreement being considered must include a clear and achievable airport development plan, noting that anything else will be short-changing the country.
Bunching viable and non-viable airports
Speaking to Saturday Vanguard, the Chief Executive Officer of Belujane Konsult, Mr Chris Aligbe, said: “I do not belong to the school of thought of bunching viable and non-viable airports when concessioning. We should be very careful about concessions. We cannot just say we want to concession these airports. There are so many types of concession agreements. We have to consider if it would be manage and transfer or develop, manage and transfer. For me, I think that if these airports are concessioned, the revenue coming from those airports should be used to develop the less viable ones.
Monitoring concessions
Aligbe stated that the longest concession agreement he has come across is “50 or 60 years somewhere in Eastern Europe,” adding: “As at the time the airport was concessioned, it was handling about three or four million passengers. But they said by the 10th year, they expect that this airport should be able to handle about 12 million passengers. And by the next 20 years, it should be able to handle a higher number. And they grew it to the point that it has the capability of handling over 50 million passengers. That is how to monitor concessions. You must put a mark. If you do not do so, you will not be able to monitor what is happening.”
Factors to consider
According to the aviation analyst, “that is why concessions must be carefully considered while keeping in mind transparency. We must look at population development and well-being. It might be domestic or international travel. You look at the development of the population. What are we likely to have in that airport capture area? What will be the population growth? And how many? We need more standard airports. Airports across the West Africa sub regions are better than ours, even Ghana is getting a lot better.”
Capable hands
Aligbe, however, said while assessing proposals, the ministry should tap into Adebayo Ogunlesi’s and Kuku’s experiences, adding that their combined knowledge will be beneficial to the country in the long-term.
“She (Kuku) worked in Ernst & Young, a consultancy firm that has been consulting for airport development and business globally. They have been in the aviation sector. So, she has a lot of experience on airport concessions. They should tap heavily from her knowledge. For me, it is a lot that they have there, and it is good that we need it in this country. We do not need to start looking elsewhere when we have someone in the agency. I think that the MD of FAAN has at least shown signs that she knows what to do and she can do what will make us grow. It is not just because she is the MD of FAAN, but because she has a wealth of experience.
“We need to have the best. We cannot stay in a country where we have very good hands and we leave them. We should also tap into Adebayo Ogunlesi’s experience. That is the best we have for now in our country. There is no other person that can stand up and say man to man, I can compare. It is not possible. Infrastructure Concession Regulatory Commission, ICRC, has no competence when it comes to airport concession. That is where you must have a sound adviser that has the knowledge,” he said.
Excuses and extortion
On his part, the Chief Executive Officer of Centurion Security and Safety Consults, Group Captain John Ojikutu, retd, argued for a concession model in which unviable airports would be developed alongside viable airports.
Ojikutu said: “I have said it long ago, as far back as 2019, even in my book: ‘Troubled Skylines: Travails of Nigerian Commercial Aviation’, that whenever government wants to concession, it should not concession only the international airports. In fact, federal government should not concession five airports alone. If it does, it will give room for excuses and extortion. If the federal government wants to concession airports, it should concession one international airport with at least four domestic airports.”
Duration
The aviation analyst also warned that the concession agreement should not be more than 20 to 30 years.
“Concession only the non-aeronautical services, you cannot concession the aeronautical services especially at joint user airports owned by government for the military and civil. Anything that has to do with terminal building, cargo terminal, car park, including the land area can be concessioned. This is because we owe an obligation to the International Civil Aviation Organisation, ICAO, when it comes to aeronautical services. The concession agreement should not be more than 20 to 30 years,” Ojikutu said.
Achievables
He added: “The concessionaire should be assessed for 20 years based on the things that they have been told to achieve. What are those things? Enhanced security among others. You must tell them what they will build. If after 20 years they are unable to achieve that, then you can stop the concession and give it to someone else. You must give a goal that they must achieve to meet up with international standards. If they do not, the concession can be easily suspended.
Business plan
“Also, the concessionaire must have a business plan. They must not give excuses like some of the airlines are currently doing. They must not come in and after a while start asking for government’s intervention.”
Aviation College losing talent to better-paying agencies — Rector
Rector Nigerian College of Aviation Technology, Dr Danjuma Ismaila, has lamented the poor wages received by staff, saying it is resulting in talent loss and exit of trained professionals to other agencies.
Ismaila said this during an oversight visit to the College by the Chairman, House Committee on Aviation Technology, Tajudeen Abisodun.
A statement signed by NCAT’s Director of Information, Dr Jude Amadi, said during the tour of NCAT’s facilities, the rector said while NCAT was a leading provider of skilled professionals in the Nigerian aviation industry, inadequate compensation was leading to brain drain and disruption in training continuity.
The statement said: “Our trained personnel are regularly poached by sister agencies and private companies offering significantly higher salaries. This situation is not sustainable.”
The statement said Ismaila insisted that while the college enjoyed government support, retaining experienced staff had become a significant challenge due to better incentives outside NCAT and called for legislative backing to review the salary structure of staff.
According to the statement, the rector “emphasised that more effort is needed, particularly in budgetary allocations. According to him, this will help the college meet rising demands and address pressing operational gaps.”
In response, Chairman House Committee on Aviation Technology, Abisodun, commended the leadership and contributions of the college.
He said Ismaila’s presentation gave a clear picture of the institution’s priority needs and assured that the committee would assess them carefully.
Vanguard
