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Why FG must look inward for bidders, investors in airport concession plan, by Babalakin

By Wole Oyebade
18 October 2021   |   4:05 am
Chairman of Bi-Courtney Aviation Service Limited (BASL), Wale Babalakin, has urged the Federal Government to look inwards for credible bidders and investors in the ongoing concession of its four major airports.

Wale Babalakin

• ‘MMA2’s initial design was a shed, not terminal’
Chairman of Bi-Courtney Aviation Service Limited (BASL), Wale Babalakin, has urged the Federal Government to look inwards for credible bidders and investors in the ongoing concession of its four major airports.

He said it diminishes the country and discourages potential foreign investors that there is no local capacity on the bidding priority list.

The Federal Government recently invited investors to submit bids for the concession of international airports in Lagos, Abuja, Port Harcourt and Kano.

Signs of cracks and insinuations of investor apathy, however, emerged in the process when the Ministry of Aviation advertised an addendum of four-week extension in the timeline for submission of bids.

Babalakin told reporters at the weekend that it was embarrassing seeing the Federal Government’s advertisement in the Financial Times beckoning to the world to come and invest in Nigerian airports.

He said in other climes, the government would have checked past and present performance of companies that have done well enough, like Bi-Courtney is doing with Murtala Muhammed Airport II terminal (MMA2), and offer them a right of first refusal before opening the process.

He said notwithstanding the messy fallout between his BASL and Federal Airports Authority of Nigeria (FAAN) on MMA2, BASL has within its limited resources operated MMA2 for 14 years and has run the terminal well to emerge the best in the country.

Babalakin recalled that the company was in 2003 invited to construct the new terminal after the former General Aviation Terminal One (GAT 1) was razed and the preferred bidder, Sanderton Limited, failed to meet the deadline for commencement of work.

According to him, what the government wanted the company to construct was “a shed,” but in one of his visits to South Africa, he discovered that the South African Government was equally constructing a new domestic terminal for the country and he decided to replicate the same terminal, which was completed and commenced operations in May 2007.

The Build, Operate and Transfer (BOT) agreement was, however, gutted by bitter and yet unresolved controversy over years of operation and amortisation, with FAAN insisting on 12 years, while BASL stuck to the 36 years contained in an addendum.

He said though the MMA2 concession was the primus inter pares in Nigeria, the investment in terminal construction has spurred other state governments like Bauchi, Delta, Akwa Ibom and lately Anambra states to invest in terminal facilities.

Babalakin said: “In other places, those who have demonstrated such expertise and have the capacity will be the first choice. But in Nigeria, we are looking for investors from people that do not have proven track records, especially at a time when credible companies are leaving Nigeria for neighbouring African countries. Why look for expertise from outside when you have tested technical hands that are proven for 14 years?

“BASL is interested in anything that is intelligent infrastructure development. I have had people say are you a businessman? I am not a businessman. I am a lawyer and an infrastructure developer. I don’t trade. I don’t import and export. What is my interest? Infrastructure development and that’s where you find me.

“So, we are interested but we are more interested in the process leading to the emergence and we believe that we are entitled to be first option. In any very organised country, we would be given the first option.”

The request for qualification (RFQ) to run the facilities efficiently and profitably is open to firms or consortia with track records in airport terminal management and net worth of N30 billion per bidding firm or consortium. The concession is billed to run for 20 to 30 years tenure in a BOT model.

In an addendum published by the Ministry of Aviation last week, Permanent Secretary, Hassan Musa, announced the extension of the deadline by four weeks, now ending on October 25, 2021.