Tuesday , 4 October 2022
Mallam Aminu Kano International Airport (MAKIA) one of the terminals being built by through the $500 million Chinese-loan

Concession: Unions again question rationale behind 60-40 profit sharing, $1b debt repayment

FOUR major aviation unions have again questioned the rationale behind the profit sharing of the proposed concession and why the Federal Airports Authority of Nigeria (FAAN) is disadvantaged  despite bearing major costs including the over $1bn loan repayment utilized to build the terminals.

This is just as they have alleged that the promoters of  Outline Business case (OBC) are unsure of what model of concession to adopt as the Build operate Transfer (BOT) or Renovate operate Transfer (ROT) do not follow because there is nothing for the investors to build  or to renovate  for the next 25 years.

The unions: National Union of Air Transport Employees (NUATE), Air Transport senior Staff Services Association of Nigeria (ATSSSAN), Association of Nigerian Aviation Professionals (ANAP) and Nigeria Union of Pensioners (NUP)- FAAN  made this known in a joint statement vowing to keep the pressure up.

The statement titled: The Airport Concession Quagmire- Time to make our Stand signed by all the scribes of these associations in part read:

” The economics of the concession do not add up at all. While the profit sharing ratio is proposed  to be 60:40 in favour of the concessionaire, the disadvantaged FAAN is made to bear the repayment of the $1bn  loan utilized to build these terminals, continue to pay emoluments of its staff and pensioners and return 25% of its Internally Generated Revenue (IGR) to the FGN under the Fiscal responsibility Act

“ And also maintain the remaining the remaining 18 airports in Nigeria. Unless through some abracadabra, there exists no possibility of FAAN meeting even a quarter of the above enumerated obligations under this obnoxious sharing formula.”

The unions further argued that the basis for even granting the concessionaires the lion’s share of revenue generated remains shrouded in secrecy as they are no real financial investments to be made by the concessionaires stating that it was a Take-Operate and Transfer as the concessionaires were reaping without sowing.

It stated that  no case has been established for the concession of any of the airport terminals as in the first place terminals earmarked for concession are brand new 21st century terminals  which have no need for significant investment in the next 25years a fact established by the OBC.

The unions in the statement also stressed: “A cursory look through the OBC shows that the promoters are unsure of the concept to adopt between Build-Operate- and Transfer (BOT) and Rehabilitate- Operate and Transfer (ROT).

“This apparent confusion to us stems from an established fact; in these particular terminals, there is neither a thing to neither build nor rehabilitate. In that case, if there should arise a need for Expansion in the terminals (which is not envisioned in the next 25 years) then the Green Field concession option would have been more applicable.

The unions also  drew the attention of government and all stakeholders to the plethora of unattended legal battles bordering on the concession, unattended outstanding labour issues stating that the OBC is claiming erroneously, that the litigation around FAAN is of no consequence.


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