Confusion as CCECC abandons work at Lagos Airport terminal
About six months after it was due for opening, the China Civil Engineering Construction Corporation (CCECC) has stalled work on the new terminal at Murtala Muhammed International Airport (MMIA), Lagos.
The Guardian learnt that the development was not unconnected with the planned concession of the four main international airports and alleged default of the Federal Government (FG) to pay the counterpart fund in full.
The project, though 90 per cent completed, was further roiled by confusion over a move to concession the four main international airports and the government’s refusal to clear the air on the status of the terminals, and the repayment plan of the Chinese loan.
FG has since 2017 begun moves to concession all the 22 airports, beginning with the big four in Lagos, Abuja, Port Harcourt and Kano. Coincidentally, the big four were beneficiaries of the 2013 $500 million loan deal between Nigeria and China to build four new terminals for the four airports. Abuja and Port Harcourt currently use the new terminals, while those of Lagos and Kano remain yet uncompleted eight years on.
A coalition of aviation unions and stakeholders has described the “concession within concession” as untidy and not in the best interest of the country. They requested details of the $500 million loan deal to build the four terminals, especially the add-on plan to concession the same terminals. Government’s response didn’t come their way.
The Managing Director of Federal Airports Authority of Nigeria (FAAN), Capt. Rabiu Yadudu, early this year, said the Lagos new terminal was scheduled for completion and commissioning by the first quarter of 2021. The terminal has not been completed and the contractor has left the site as of last week.
Sources at the CCECC confirmed that work has temporarily stopped on the facility. “I think it has to do with some disagreements. Yes, part of the counterpart funding of $100 million from Nigeria has not been fully paid and the status of the concession too. There is no clear direction on the whole process.”
It was also gathered that the contractor had made efforts to speak with the concerned authorities without headway.
The General Secretary of the National Union of Air Transport Employees (NUATE), Ocheme Aba, told reporters that the conflicting policies of the FG show lack of seriousness about what it wants to do with the airport infrastructure.
Aba said the agreement the government had with the Chinese government before it accessed the EXIM Bank loan, was that the contractor would recoup its investment by running the terminals for a time, which is akin to a concession.
“Not only has the debt risen from the initial $500 million loans to about $1 billion, but the government seems to be contradicting itself because the principle of the agreement is like a concession. CCECC and the government agreed that the company would have a firm order to receive a particular amount of money every month from the revenues of the terminal to a dedicated account. Although it is a loan repayment, it is like a concession,” Aba said.
President of the Aviation Safety Round Table Initiative (ASRTI), Dr. Gbenga Olowo, said a number of initiatives in the aviation industry were getting “cloudy” and against the long-term interest of the sector.
“Private sector participation in aviation with this administration, safe for airlines, remains cloudy. National carrier rebirth itself remains a contradiction. In six years, Arik, Aero, and the national carrier remain a mirage.
“Policy statement on the concession of airports to evolve total private sector participation is not here in six years when Ghana Airport’s transformation took barely two years. One would have expected the Infrastructure Concession Regulatory Commission (ICRC) to concession the airports after resolving the many bugging issues already identified by industry experts, workers unions and the general public, and utilise these funds on more pressing issues in the sector. Pardon my ignorance,” Olowo said.