‘Only honesty of purpose will make airports’ privatisation succeed’
Recently, the Federal Government announced plan to privatise some airports in the country, what is your take on this?
MY take of course, is to say that it is a very good idea. It is very important to observe how the privatisation will be done because there are different ways to privatise. Most of the airports in Europe are privatised. Let us be blunt and honest, businessmen are mostly interested in making money, everywhere it is about making profit. The way most parastatals in Nigeria are operating is not very efficient. What I am saying is that just take a look at the state of the airports. If you are running a highly profitable business and you don’t show that your business is profitable by investing in it and by promoting high standard, I don’t think its a good example of efficiency.
For government to demonstrate to investors that it is serious and committed to the privatisation programme, the first step is to sit down with the private sector and ask the government what will you allow me to do? No investor will take over any firm if it is full of debts, if the revenue scheme is not clear, if there are lots of revenue losses, if it is over staffed etc.
The private sector would say no to all these sorts of things because this is not a viable company to take over. So the government must be ready to say don’t worry, we will give you all the backing when it comes to laying off staff. Government has to give the assurance that in an event that staff would be laid off, as the former owner it will pay off the affected workers, may be three months or one year salary, depending on the terms of their engagement.
Apart from the issue of staff, what fundamental issue that is of necessity to ensure that the exercise is not derailed?
One vital thing that is of strategic importance but which has been lacking in previous exercise is the lack of honesty of purpose by government when putting pen to paper. This has been largely missing in the past and has led to lost of confidence in government’s privatisation exercise. This is why investors appear to be shunning government’s clarion call.
For instance, take the case of our company, Bi-Courtney, the concession grated us as private sector clearly states that all domestic flights to the federal airports in Lagos state must operate from MMA2 (Murtala Mohammed Airport2). It is there, yet government is operating another terminal next door. Yet the agreement is on paper, that it is only Bi-Courtney that must operate all domestic flights in Lagos. So one will wonder whether it is only written on paper but not to be obeyed. What is the worth of that paper. Why changing the goal post in the middle of the game?
If government fails to discontinue this, nobody will be interested in privatisation and no private sector will come and say I am interested in working with you.
The truth of the matter is that any interested company would want to first ask Bi-Courtney how we are enjoying this private partnership with the government before taking the decision on what to do.
Will it be profitable for government to first put in all the facilities before privatising?
For now, the airports are making money but I cannot comment on the way we spend the money. From my quick calculation, international airports make in one month, what we make in one year. Are those places twelve times better than our own? No, I don’t think so; we are still the best. How they use the money, I don’t know. If you ask me whether it is profitable for government, I will say yes of course.
What should the government go for between concession and privatisation and the reasons why?
I think the government should go for concession. Concession is a kind of privatisation really because the facility is there Or I say please go and run this business for me and give me so much money at the end of the day.
There are many ways of privatising, it could be through concession, partnership, sale etc. Let the government say this is what it wants from the private sector. The Federal Airport Authority of Nigeria (FAAN) that is currently managing the airports is not efficient at the moment because it has so many unions and interests that are making the airports very difficult to thrive.
government should just declare its expectations. Is going to retain it 100 per cent or it will let go? Is it selling and how much or is it concessioning?
FAAN is not efficient at the moment because they have so many unions and interests making it very difficult to thrive.
The government should just declare their expectations. Are they going to retain their 100 per cent or let it go? Are they selling at how much or is it concessioning? They can just say they can not afford the kind of investment the airports require to thrive for many reasons.
Who in the private sector government should be talking to when the exercise commences?
As a matter of national interests, I think it is better to first talk to Nigerian companies that are doing it now, they should talk to us first before throwing it open? We have been doing it and have being rated the best three times in a roll.
Is it not logical to contact a known person rather than outsiders when you are selling your house, we have been doing it consistently for nine years and doing it well.
Investors outside the country will ask government the logical question that: why can’t it find home-grown solution to its problem before going outside.
You mean government should consider indigenous private sector first?
Is it not what the government has been saying that they want to promote the growth of local industries, they want to boost local businesses, they want to expand domestic spending and investment. That is what they should do.
If you are engaging foreign investor, you cannot tell them to leave their money and profit here otherwise they will go with their money.
What in your view is that thing that is missing at the airport, but which if install could turn around its fortune?
Let there be electricity. Oil is at its deepest point in value in the international market, going for as low as $30 per barrel. Gas is so much in this country and gas turbine are connected to most international airports. The consumption of electricity in the airports justifies having electricity plant around it. We are burning diesel instead of having gas from Ikeja to supply the airport turbine for 24 hours if considered and it will benefit everybody.
One, Ikeja will have more electricity because the airport will no longer depend on it for supply. Two, we will have 24 hours light at the airport if the turbine is built around the airport.
Finally, do you have confidence that this privatisation process will succeed?
Where there is the will, there is a way. If they want it to succeed, it will succeed that is all I have to say. If we want to do a good job, we can do it but if it is just talk, that’s the way it will be.