FG says no airports ownership changes, defines areas slated for concession

THE Federal Ministry of Aviation has said that there will be no be no ownership change with regards planned concession of four Nigerian airports as the parts of the airports to be concessioned applies to the non-aeronautic assets of the airports located in the Passenger and Cargo terminals.

The ministry in a series of Frequently Asked Questions (FAQ) released recently also said Federal Government will still be making strategic investment to the airports, clarifying that the Federal Airports Authority of Nigeria (FAAN) will continue to oversee airports management after concession.

The document read on change of ownership,’ No, there shall be no change in the ownership structure of the airports involved in this programme. What has been mandated by the Federal Executive Council is a Concession programme.

“A concession is governed by a concession agreement whereby two parties – A private sector investor and a Public sector owner of an asset enter into an agreement that gives the Private sector investor the right to operate said asset for a specific business and within the Governments jurisdiction, subject to certain terms that are agreed upon by both parties during the negotiation and contracting phase. It is thus a form of Public-Private Partnership whereby there is no transfer of equity between the contracting parties.

”The Federal Airport Authority of Nigeria (FAAN) remains responsible for overseeing the management of Nigeria’s airports. FAAN will continue to play this role broadly.

It further stated,” The concessionaires will be responsible for the day-to-day management of the airport passenger and cargo terminals. The FGN, as the owner and partner to the concessionaires will make strategic investments in these assets alongside others from the private sector and development finance sector. Any investment contributions made by the FGN will be based on robust medium to long-term investment and expenditure plans to be developed by the concessionaires with oversight from the Ministry of Aviation.

On the non aero-nautical parts of the airports slated for concessions, the FAQ clarified,”They are thus comprised of the assets from the entry door of the airport to the point of embarking a plane, and from deplaning to the exit doors.

“This space commonly referred to as the Passenger terminal is comprised of retail spaces, waiting and seating areas, airport and airline lounges, baggage collection, check-in counters as well as administrative offices. The Cargo terminals are comprised of the facilities between the point of entry and up to loading and offloading points, including administrative offices within said facilities.

It further said the ministry was not considering putting up all the airports for concession since, according to it, “infrastructure concessions are very complex and sensitive programmes.”

“They often requiring years of planning and preparation to secure the requisite inputs and approvals from the relevant regulatory bodies.

“We are starting with the most strategic assets because successful delivery of this concession programme will give all stakeholders the confidence required to consider other possibilities in the sector,” it said.

On whether the federal government would give preference to indigenous investors in the concession programme, the ministry said: “We are focused on driving a transparent and competitive process that will deliver the very best long-term partner(s) and outcomes for Nigeria.

“There are not many companies with the qualifications, experience and financial resources required to run assets like the ones up for concession.  Whilst we do expect Nigerian companies, or consortiums comprised of groups of Nigerian investors, we expect the process to receive significant attention from the international community, perhaps in partnership with qualified and capable local companies and investors.”

On the implication of the concession programme for national security, it said: “There are no national security implications.

“The Federal Airports Authority, Nigerian Civil Aviation Authority, Nigerian Aerospace Management Agency and all other public authorities tasked with collaborating with the nation’s security apparatus will continue to perform their duties in close collaboration with the concessionaires.

“All relevant agencies have been carried along including the national security advisor.”