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Saving the aviation industry from concession predators

By Olu Ayela   |   16 October 2016   |   3:35 am
Aviation sector

Aviation sector

The discussion about the aviation industry and not just the future of the Nigerian airport system is on the front burner once again as concession predators are rising nationwide. The topic has been a recurrent and until they have their pound of flesh it is their way or the highway. It has always been triggered as soon as a new government hits town and the political jobbers and their hangers-on are looking for a piece of a juicy parastatal or agency to latch onto for sustenance in the new political cycle. However, in this dispensation, the noise is so loud because of the background of this government that is steeped in change. Those who are genuinely opposed to the rotten past of the way of handling government business are asking that a dispassionate look be given to the process so that greed, avarice and self-centeredness should not trump the desire for true change.

It is difficult to know where to deposit this appeal to save the Aviation industry in Nigeria and by extension the airports who are the property managers for all other government agencies that have businesses to conduct in the twenty one airports around the country. The arguments for concession are louder because many of the hawkish elements are waiting to buy where they did not build. President Muhammadu Buhari seems to have been swayed by the persuasions for concession if we are to take the Minister of State for Aviation Senator Hadi Sirika to be speaking for him. But the man is known for integrity and should take care to review all that is being peddled before him. It is also not possible for the plea to be sent to the National Assembly whose privatization committee is poised already with the hammer to give the airports to the highest bidder. The only arbiter in this case is the court of public opinion and if the president would live up to his predecessor, may listen to the public and integrity may win.

On his election campaign the president swore that he will create jobs and provide both economic and legal frameworks that will make Nigeria livable for Nigerians under his government. Concessioning the airports will not create jobs; It will only make a few rich people richer and put the lives and means of livelihood of about six thousand Nigerian working there and not to count the pensioners and their families at risk. There are too many hungry and desperate people on the street already as the change process is unfolding and to allow the greed of a few Nigerians to compound this misery is an option that should be avoided.

The word on the lips of the vanguard for concession is that the airports are not viable, not being managed as business operations fit for the twenty first century. Be that as it may, which of the entities in Nigeria including the National Assembly and the governments at all levels are operating as they should. This is an indication that something is fundamentally wrong with the system and should therefore be addressed holistically. There is also the accusation against the airport authority that it is over staffed which is correct. It is also the government and the politically connected people who have used their cronies to fill the place to the extent that the Federal Airport Authority of Nigeria (FAAN) has become obese. Thank goodness it has been trimmed.

There are more directors in FAAN than the National Ports Authority (NPA). Currently there are eleven directors and forty two General Managers which is way too large for the agency to work with to ensure viability. Graduates of less than ten years experience are already occupying positions of general managers and directors. Thankfully, this is the only administration that has not given in to the temptation to use FAAN as a dumping ground for job seekers. The money being wasted as salaries and emoluments can be used for the development of FAAN and will reduce the organization to a more manageable entity. This will also increase the operational efficiency and profitability of the airports; stimulate growth in the non-oil sector if some of the airports being tagged as unprofitable are designated to airlift agricultural materials, solid minerals and other produce from around the country. It will on the long run make Nigeria more attractive as an investor’s havn and a regional hub.

To pursue the case of the non performance of FAAN further, we can set it side by side with the Federal government whose annual budget is N6 trillion which is a whole N1.2 trillion less than what just an airport, the Hartfield-Jackson International Airport in Atlanta Georgia generate annually at $24 billion dollars. Do we for that reason pour scorn on the ability of the Federal government? For years now Nigerians have insisted that the National Assembly has not been an assembly for Nigerians because it is an assembly for waste. With all disgust spewed from there, it has not moved the people there to conduct themselves more appropriately and we are still hoping for something good to come from the Assembly.

Clearly, FAAN is not a drain pipe as many of those whose interest is to buy into the Authority are saying. FAAN generates about N33 billion annually and it can contribute twenty five percent of this money to the federal government which should look into the unwieldy size of the agency and weed out as many of the political appointees as possible so that the charges for salaries and emoluments would be drastically reduced. With what FAAN is generating and without the over bearing interference of the Ministry and the National Assembly Committees who are constantly asking for favours, contracts and all manners of support for themselves and members of their families there is so much FAAN can do and be viable. FAAN can without stress pay for the new phase of the expansion of the terminal building at the international airports with the low interest rate of two percent over twenty two years.

In order to ensure continuity, the contractors should be allowed to manage and operate the terminals according to well laid out regulations for a period to be specified and terms agreed upon before they are eventually transferred to FAAN. This will help FAAN to continue to be profitable and viable and resist the onslaught of those who want to tear the agency to pieces so they can take it as their own share of the political patronage system in Nigeria.

We are all too aware of the recent concession attempt with Bi Courtney Aviation Services Limited (BASL) out of which we cannot make head or take and locked both partners into a spate of litigations with outcomes that were hardly respected by the government that originally approved the concession. The concession is riddled with so much controversy and seems to carry a mark of an under hand initiative. Rather than serve as a model for what concessioning should be the rising trend of disagreement between the government and BASL has become the reason to be distrustful of the concession campaign. Can this be the model to rely on in a country where transparency, public participation and accountability in the governance process is totally disregarded?

But we should also not be unmindful of the challenges of giving full ownership or private majority ownership of airport facilities to private companies. The act of concession does not serve the public good as it will lead to monopolistic pricing, poor airport services and restricted operations which may compromise the objectives of International Civil Aviation Organisation (ICAO). Many of the private operators all around the world only concentrate their attention on the terminal buildings. They hardly contribute to the maintenance of the airports’ most critical safety infrastructures which includes the runway, taxiway, apron, navigational aids, airport ground lighting system, fire and safety service, airport perimeter fencing and the general maintenance airside. For them it is the bottom line and what would keep services alive to bring more money.

Concession may be the way to making huge money roll into the coffers of the concessionaire but current experiences from Africa to Europe and America concession is carrying more baggage than the nations actually bargained for in the years after the concessions. They cannot wait for the years to roll by as security worries and spending has far outstripped the fear of mismanagement of airport facilities.

There is too much is at stake to capitulate so easily to the sweet talk of concessioning. There should be security considerations for the nation’s air borders. In these days of the rising specter of global terrorism, giving up the airspace in order to increase profit is something that should hardly be considered. The entire security of the nation can be compromised if the airports are left in private hands. Those in favour of concession will call for measures to beef up security at the airports but that alone will not be sufficient to stem the possibility of compromising security operations at the airports. The spate of attacks in airports around the world has caused for increased spending which has not solved the problem.

For a country that is not willing to spend on the development of infrastructure, once the airports are concessioned, there will be no willingness to spend on security upgrade. Nigeria should therefore brace herself for the free inflow of drugs, fake currencies, a whole cache of dangerous goods as well as arms and ammunitions in a nation already saturated with small arms and explosives.

Olu Ayela, veteran journalist, lives in lagos.

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