10 years after MMA2 concession; controversy lingers

Kindly Share This Story:

10 years after, controversy over MMA2 concession lingers

Advertisement

The privately operated Murtala Mohammad Airport (MMA) Terminal Two is basking in the euphoria of clocking 10 years amidst unresolved issues relating to the concession.

For operating successfully for 10 years, the MMA2, managed by Bi-Courtney Aviation Services Limited (BASL), incontrovertibly deserves a pat on the back. The MMA2 is the first Public Private Partnership (PPP) initiative in the history of Nigeria’s aviation, anchored on a Build, Operate and Transfer (BOT) arrangement. The decision to concession the terminal was a corollary of an inferno that gutted the terminal and prompted the then government of President Olusegun Obasanjo to invite private developers to rebuild it.

It would be recalled that the BASL came second during the bidding process, but the responsibility of rebuilding the terminal fell on Bi-Courtney, a subsidiary of Resort Group, chaired by a business mogul, Dr. Wale Babalakin. Massive investment went into the terminal, which was commissioned with glitz and glamour by Obasanjo.

Other than the glamour of the commissioning, the MMA2 concession has had to contend with seemingly intractable controversy shortly after the expiration of Obasanjo’s tenure. While the BASL argues that by the concession agreement, all domestic flights emanating from Lagos airport, including the General Aviation Terminal (GAT) where Arik Air operates from would be handled by the company, the authorities have resisted the move.

For a decade, the BASL and the Federal Airports Authority of Nigeria (FAAN) have engaged in a running battle over the concession. Several court cases, up to 30, were filed and the crises drag on. Bi- Courtney also went ahead to invest in regional operations, but up till now, the terminal was never allowed to operate regional flights, even though some of the airlines operating from the terminal fly to Ghana and other West African countries.

The airlines patronising the terminal are Med-View, Dana Air, Azman, Overland, First Nation and Aero Contractors.

Advertisement

Also, the two gigantic structures opposite the MMA2 were meant to be a hotel and park, but the projects have remained practically abandoned, almost constituting nuisance at the airport because of the raging controversy.

Rolling out drums to mark the 10-year anniversary of its operations, the BASL primes itself as the pioneer of PPP in aviation, running a terminal adjudged the best, not only in Nigeria but in the African continent. Although it has the capacity to process 4 million passengers per annum, the terminal successfully handled 20 million passengers, 400,000 flights in 10 years of operation, while providing jobs for 100,000 Nigerians.

The chairman of BASL, Dr. Babalakin, who addressed newsmen in Lagos on the 10-year anniversary, said the current controversy over the concession sprang up as a result of the alleged breach of contract by the government. He noted that the MMA2 concession agreement stipulated that all domestic flights from Lagos, as well as revenues accruing from such flights, were to be operated by BASL.

According to him, the company was shocked when Arik Air began to operate from the GAT.

“In furtherance, and in obedience to this provision, as soon as the MMA2 was ready, government closed the GAT completely. Now, one day we woke up and Arik Airline began flights from the GAT in defiance of this clear provision of law.

“Our lawyers had anticipated that it was possible that somebody would try to break the law. Even if you break that law, the agreement will now say all revenues must come to us and we should be given the first option to make any such development. When this happened, we complained. We now went to the arbitration panel set up by the Attorney General of the Federation. It has three members from Bi-Courtney and three from the Federal Government.’’

He alleged that the agreement unanimously reached by the panel was never implemented, leaving the company with no option than to go to court, which ruled in BASL’s favour in 2009.

“We went back to court to seek for damages. After considering every submission, the court awarded us N132billion damages in 2012, which remains unpaid till date,’’ he said. He added that six appeals were filed by the Federal Government, Arik Air, (National Association of Air Transport Employees (NUATE); Air Transport Services Senior Staff Association of Nigeria (ATSSSAN), and two others, which were all dismissed

“Arik went to the Supreme Court, but the case was dismissed in five minutes. Since 2012, the same authorities have been accumulating this money, which is now N200bn,’’ Babalakin added.

On the option of dialogue, he said the company had always shown interest in resolving the issues amicably, recalling that the late former President Umaru Yar’adua once sat on the case but the agreements were not implemented.

Despite the first PPP experiment in airport infrastructure management, stakeholders and analysts have lampooned the authorities for inking an agreement they would not be bold and audacious enough to implement. Some have described the MMA2 arrangement as a bad reference in airport concession, which undoubtedly sends a wrong signal to would-be investors at a time when government has prioritised concession.

Already, the present government has commenced the process of inviting private sector players to take up the management of the four viable airports in the country. They include the MMA in Lagos; Nnamdi Azikiwe International Airport (NAIA), Mallam Aminu Kano International Airport (MAKIA) and Port Harcourt International Airport (PHIA). Just last week, the government appointed transaction advisers who would advise the government on the best way to do the concession.

It was learnt that one of the issues to be explored is the lingering controversy over MMA2 since no fresh concession can be seamlessly carried out without making reference to MMA2 in terms of the successes, loopholes and failings of the concession. The Minister of State for Aviation, Senator Hadi Sirika, during a stakeholders meeting in Lagos where he unveiled the roadmap for aviation development, also confirmed that the transaction advisers would look at the MMA2 concession, warning that any government official found wanting in shortchanging the government would be duly reprimanded.

The Senate Committee on Privatisation, which also visited the MMA2 terminal, said it was disappointed that government mishandled the issue of MMA2 by failing to abide by contractual agreement. Senator Ben Bruce, who chairs the committee, said the failure of government to honour agreement once it was already signed was bad, and such posture could scare away investors.

Advertisement

With government’s commitment to concession airports, sitting down to dialogue with Bi-Courtney might not be a bad idea as stakeholders would believe, with a view to learning from the past mistakes and resolving the protracted controversy so that the country can move on.

An aviation analyst, Group Captain John Ojikutu (retired), said government appeared to have gained notoriety for reneging in agreements, saying that just as it did with Bi-Courtney, it also reneged its agreement with Virgin Atlantic. He said the agreements it signed with the BASL were not done transparently, noting that the transactions were left in the hands of politicians and political officeholders to manipulate for their own interest.


Kindly Share This Story:

Related Post

Leave a Reply

Your email address will not be published. Required fields are marked *

amehnews greetings

x