Commercialisation, privatisation of Nigerian airports long overdue —Ojuri

Since the President Muhammadu Buhari-led government announced its plan to go ahead to concession four major international airports across the country, there has been reactions from key players within the sector. In this interview with SHOLA ADEKOLA, the Managing Director of Aglo Aviation Support Services, Mr Tayo Ojuri, an airport management expert, spoke on the urgent need for government to concession the airports and what the country stands to gain from the airports concession.

 

Recently, the Federal Government announced plans to privatise four of the country’s airports which has triggered a debate. Are you in support of the decision or not and why?

It is important to clarify that Federal Government goal based on policy state announced in May was to concession, rather than privatise four major airports been Lagos, Abuja, Port Harcourt and Kano. The missing part of the puzzle is the fact that government did not justify the rationale for picking these four airports, nor did it highlight the concession model, neither is there an awareness and communication platform for stakeholders and FAAN staff.

However, the commercialisation and privatisation of Nigerian airports is long overdue in my opinion. This process will definitely improve efficiency, increase revenue and promote a safe, secured and commercially viable airport system. Coincidentally, government currently does not have the funds to manage airports, hence the need to partner with a global Airport Management Company that will ensure appropriate infrastructure that will enhance passenger travel experience.

 

Do you think this decision is ripe for the country?

I reckon this is the appropriate time as there are paucity of funds from government. Looking back when airlines were liberalised in 1978 or when BAA airports were privatised in 1987, there is never a perfect time, the pertinent thing is to ensure that the process is transparent and reputable organisations are engaged with the task of managing these airports.

This process will certainly take away the daily management and operations away from frequent government interference which invariably puts focus more on performance through provision of excellence customer service to airlines and passengers, enhanced ambience, provision of attractive food and beverage outlets and provision of other ancillary services.

Realistically, we should have a balanced scorecard management system. This multi-dimensional system will enable FAAN achieve positive financial performance, customer satisfaction, business systems and human capital development.

 

People are accusing the government of planning to sell the most viable airports to its business associates. Do you agree with this notion?

I do not operate in the realm of rumours, however, it is government’s obligation to push the process through a fair and equitable process. Interestingly, we are not reinventing the wheel as various airports concession transactions have been conducted worldwide so it is just for us to follow best international practise.

Moreover, there are organisation such as International Finance Corporation and reputable global transaction advisors that can help government attract serious investors. According to the Airport Council International (ACI), it is essential for government to foster the right environment for investment in airports and ensuring that regulation evolves in step with the industry for a sustainable future with the ability to accommodate growth in the demand for air service.

 

Some are even suggesting that in privatising the viable airports that some of the unviable ones should be paired with them, for the would be private investors. How do you view this?

I do not know the rationale for cherry picking the four airports. However, I am conversant with Canada’s model of vesting responsibility for the operation and capital investment of all but 18 very small airports from the Federal Government to local entities which happened in 1992.  The larger airports were designated “National Airports System” airports and transferred to 21 fully private airport authorities which were incorporated as “non-share capital corporations,” these major airports operate on a not-for-profit basis, with all operating surpluses poured back into the airport.

Likewise, South Africa’s airports were owned and operated by the state until 23 July 1993, when Airports Company South Africa was officially established and nine airports were transferred to the company. While some stakeholders are clamouring for clustering of airport based on geographical location, I am of the opinion that each airport can grow based on various economic drivers. Airports should not be seen as social service but commercial venture that can bring grater wealth, provide substantial employment opportunities and encourage economic development.

 

Do you think privatisation is the answer to the current challenges confronting the airports?

Considering the Nigerian peculiarities, the current government interference in FAAN’s management and operations, lacklustre staff motivation, inefficient operations, over blotted personnel and other loopholes in the system will certainly be mitigated in a concessioned environment which would be driven by targets, performance and service level agreements. The airport management will be keen to focus on Airport Collaborative Decision Making (A-CDM), total system automation and route development in other to increase passenger footprint.

 

Amidst the planned privatisation of the airports; where lies the security and safety of the airports particularly now with security challenges confronting the country?

The safety and security oversight for airports in Nigeria is the responsibility of NCAA in line with ICAO aviation security (AvSec) standard regulations and procedure. Within a concessioned airport environment, FAAN’s AvSec and Aircraft Fire and Rescue staff can still process the security coverage from the airport but like its been done by FAAN with MMA2, Ibom Airport, Asaba and other state airports. This is also the model operated in Canada and USA where CATSA and TSA provide security screening. I do not envisage any issues as each party have delineated duties and responsibility.

 

Majority of the airports are running at the expense of the viable ones. What is the way out of this menace?

I see it as an opportunity rather than a menace. It is often said that necessity is the mother of invention, therefore we can leverage on current government policy focus on agriculture, mining and tourism to activate agro-based product movement from the smaller airports.

Based on their size, they could provide FBO services at competitive rates, provide last mile transport for mining companies, build tourist attractions, and promote private investment in conference and convention centres. Due to the bad state of our roads, these airports could be used as early entrance advantage for intermodal movement of goods and services.