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The Delta State government recently announced its decision to concession the state-owned Asaba Airport to private investors. Although the government believes that would earn it revenue and save the state from spending scarce resources on the airport, many other people in the state are worried that the business was not clear. DOMINIC ADEWOLE reports from Asaba on the differing voices
When a critical asset is being privatized, it is normal for citizens that owns it to feel concerned. This is currently the situation in Delta State as the state government on Tuesday, Fenruary 23, concessioned the Asaba International Airport to the Asaba Airport Company Limited for N100 million per year.
Few minutes after the story circulated that the Memorandum of Understanding (MoU) had been signed, there were discordant voices. Many saw it as, one, an affront on the oil rich state, two, as a criminallyminded venture and three, as a deliberate attempt by Governor Ifeanyi Okowa to sell-off all the lucrative sectors of the state to himself.
They made allusion to how the Delta Line Transport Company was ‘sold’ to the God is Good Transport Company, in a ‘mysterious’ circumstance and the workers were sacked without proper entitlements over two years ago by the governor. Pundits are of the stance that the Bill of Public Procurement (BPP) was violated in the process leading to the airport concession.
The former Delta State Intelligence and Investigations Officer with International Human Rights Commission, Comrade Victor Ojei, a.k.a Wong Box, who is the current Public Relations Officer (PRO) of Delta State Coalition of Civil Societies and Non-Governmental Organizations (NGO’s), said: “Evidence that the bidding process for the concessioning was fair, transparent and in line with the guidelines as set out by BPP, were shrouded in mystery until the day the treaty was signed.”
He wondered why the people of the state were kept in the dark, only to wake up to observe that their common patrimony had been traded to the highest bidder. He said: “Under extant Nigerian laws, Public-Private-Partnership (PPP) concessions are in most instances awarded through auction or tendering of bids. Section 4 of the ICRC Act stipulates that the bidding process should be through a competitive public bidding.
After it has been decided by the State Executive Council (SEC) that a particular project should be embarked upon using the PPP model, the MDA must invite prospective concessionaires to a competitive public bid process through advertising such invitation in three national daily newspapers”. But a Public Affairs analyst, Fred Edoreh, called for caution in apportioning blames.
He said the concessioning of the airport should be better understood and encouraged as it shows a government with a good sense of insight and responsibility for progress. While he agreed that those criticising have the right to do so, he said effort should be channeled towards educating and enlightening them on what is going around the world. He explained that airlines and airports operations required steady and huge capital investments for stability and competitiveness, as they remain as tricky businesses.
He said the two main sources of airport revenue via incomes from aeronautical services and non aeronautical activities must be understood. According to him, the aeronautical revenue that accounts for between 50 and 60 per cent of airport income comes from passenger departure taxes, terminal services, landing and parking charges on airlines but the non-aeronautical revenue takes between 30 and 50 per cent of airport income from retail services within the airport, parking slots, rentals and other commercial activities. He said the major problem for Nigeria and very many African airports is their inability to invest in upgrades and maintain standard services to attract bigger airlines.
He said: “Indeed, it is known that 70 per cent of Nigerian airports across various state capitals and cities operate at a loss. The state governments struggle to keep them alive to provide for the takeoff and return of citizens and business partners in and out of their states, albeit at great cost in subsidisation.
“This difficulty is not peculiar to Nigeria. In 2013, 70 per cent of airports across the world ran at a loss. At about 2015, major airports across the world began to see the need to invest more to improve on income from non-aeronautical services. This is done mostly through airport privatisation and consessioning to attract capital investments from local and international investors.”
He said, John F Kennedy Airport in the United States, the most profitably run airport in the world, has series of concessioned activities and most airports concessions across the world are granted for between 30 to 50 years to enable return on investment for the risk takers. “As we speak, Brazil, one of the fastest developing nations, is on its seventh tranche of privatisation and concessining. It involves the giving out of about 43 airports to private investors to invest on and manage while the government rakes in funds from the fees to apply on the development of other social infrastructure and services.
The situation is the same in various European, Asian, North and South American countries.” He said it is unfortunate that Africa (Nigeria) has missed out in the global trend. “Sadly, Africa has not been a major consideration for international investors because of the various social and infrastructure deficits, usual inconsistency in maintaining government policies and the consequent huge risk in the uncertainty of return on investment.”
He said Asaba Airport has witnessed low passenger traffic apart from one or two plying Abuja and Lagos routes on daily basis, and big aircrafts don’t fly into the airport for a number of reasons, even as there is little or no significant presence of non-aeronautical services and commercial activities in it. Hence, the need for huge investment to improve on its efficiency and safety standards, raise its standing in aviation ranking, attract more airlines and improve on non-aeronautical and commercial services to reposition it into a preferred hub for local and international passenger flow.
He said: “Indeed, it is a mystery that Governor Ifeanyi Okowa was able to attract and convince foreign investors to commit to an investment about N28 billion towards improving on the Asaba Airport. Not many airports in Nigeria and Africa have been that lucky in the face of the circumstances under which they exist.”
He maintained that the consessioning of the airport should not be hastily judged and described it as “a forward planning move intended to give future hope of a better aviation condition for airlines and passenger experience for Deltans and all origins and classes of travellers.”
Provoked by this, the All Progressives Congress (APC) – the main opposition political party in the state, described the concessioning exercise as “an economic coup and a fraud”. The party maintained that the business of any serious minded government is to provide enabling environment for private businesses to thrive and not running shady businesses for 30 years.
The Caretaker APC Publicity Secretary in the state, Barr Sylvester Imonina, said the process leading to the concessioning of the public property was not transparent. But the governor, who assented to the three bills establishing three universities in the state, supported by the Speaker of the state’s Assembly, Rt. Hon Sheriff Oborevwori, accompanied by his Deputy, Chief Christopher Ochor and other principal officers, said the concessioning was in the best interest of the state, owing to its futuristic advantage. He said: “People will come to appreciate it in the future.
We believe that whatever actions we take, it is always in the best interest of the state. We have been able to build the airport to the stage it is today and we thank the administration of former Governor Emmanuel Uduaghan for the vision of building the airport.” He lamented that the airport was downgraded despite the effort of his predecessor to complete it.
He said: “Unfortunately, the vision suffered a major setback when the airport was downgraded to a Category 3 airport by the Nigerian Civil Aviation Authority (NCAA) just few months before my administration came into being. That meant the airport could only accommodate smaller aircraft such as the Q400 and DASH 8. In the face of an economic recession at the time, we were confronted both with the challenge of upturning the downgrade and turning the airport into a model economic platform that is self-sustaining through a robust public/private partnership.”
He explained that concessionaire shall undertake the development of Mandatory Capital Projects, and they shall be completed within a period of three (3) years from the effective date of the transaction. The Mandatory Capital Projects include Airport/Terminal Facility, Cargo Facility, Maintenance, Repair and Operations (MRO) Facility, Tank Farm Facility, Industrial Park and Office Facility, and Hotel and Conference Facility. “Due to competing needs, it is not possible for the state to continue with the development of the airport.
We are beginning to spend more than we are able to get from the airport. “We went through a very rigorous process in getting a Transaction Advisor who led us through the bidding process before arriving at the consortium that won the bid. “Obviously, it’s a lot of input that is expected from them and in the next three to five years, we will begin to reap the benefits of the decision.
“Rather than making losses to the Concessionaire, beyond bringing the airport to our dreams, they are to pay the sum of N100 million yearly and 2.5 per cent of their annual turnover as royalty to the state. Deltans should trust the government they have voted into power even though we appreciate that people are entitled to their opinions. “We will continue to stand on the side of our people to do the right thing in their interest,” he stated.