The concession deal between the Federal Government of Nigeria and Bi-Courtney Limited, owner of the Murtala Muhammed Airport 2 (MMA2), has been a subject of controversy and dispute for over a decade. The agreement, signed in 2003, granted Bi-Courtney the exclusive right to operate the domestic terminal for 36 years, with the government guaranteeing that no other domestic terminal would be built in Lagos State during the concession period.
However, the Federal Government allegedly breached the agreement by allowing domestic flights to operate from other terminals, including the General Aviation Terminal, and even granting approval for the construction of a new airport in Lagos State.
This move was contrary to the terms of the concession agreement, which guaranteed Bi-Courtney the exclusive right to operate the domestic terminal and collect levies and surcharges from fuel marketers delivering fuel to airlines operating scheduled flights into and from MMA2.
The disputes between Bi-Courtney and the Federal Government led to a court case, with the Court of Appeal delivering a judgment in favour of Bi-Courtney. The court held that the Federal Government had breached the concession agreement and directed it to take immediate steps to move all scheduled domestic flights operations in Lagos State to MMA2 and to render account of all revenue that had accrued on such scheduled domestic flights operations of any airline outside MMA2 while MMA2 was operational.
According to reports, the Federal Government’s actions have resulted in significant losses for Bi-Courtney, with the company estimating that it has lost over N100 billion in revenue due to the government’s breach of the concession agreement.
This has had a devastating impact on the company’s operations and has raised concerns about the stability of the aviation sector in Nigeria.
The case has also raised questions about the ability of the Federal Government to honour its agreements and the extent to which powerful individuals can influence government decisions.
Wale Babalakin, SAN, the owner of Bi-Courtney, has been a vocal critic of the Federal Government’s handling of the concession deal, accusing it of bad faith and breach of contract.
In a study published in the Journal of African Law, it was noted that the MMA2 concession deal highlighted the challenges facing investors in Nigeria’s aviation sector. The study found that the sector is plagued by corruption, mismanagement and infrastructure deficiencies, making it difficult for investors to operate profitably.
The controversy surrounding the MMA2 concession deal has also highlighted the need for transparency and accountability in government contracts.
According to a report by Transparency International, Nigeria ranked 154 out of 180 countries in terms of corruption perception, highlighting the need for greater transparency and accountability in government dealings.
In light of the court’s judgment, it remains to be seen how the Federal Government plans to resolve the disputes with Bi-Courtney and ensure that the company is able to operate the terminal exclusively, as guaranteed by the concession agreement.
The case has significant implications for the aviation sector and investors in Nigeria, and it is hoped that a resolution will be found and will benefit all parties involved.
The story of the MMA2 concession deal is a cautionary tale about the risks of investing in Nigeria’s aviation sector. It highlights the need for stability and predictability in government contracts, and the importance of ensuring that investors are protected from arbitrary government actions.
As Nigeria seeks to attract more investment in its aviation sector, the MMA2 concession deal serves as a reminder of the challenges that investors may face and the need for the government to honor its agreements.
Therefore, the MMA2 concession deal is a complex and contentious issue that has significant implications for the aviation sector in Nigeria. The case highlights the need for transparency, accountability, and stability in government contracts, and the importance of ensuring that investors are protected from arbitrary government actions.
So, in the drive by Federal Government to attract more investment in the sector, it is essential that it learns from the MMA2 experience and takes steps to address the challenges facing investors.
A report by the World Bank says: Nigeria’s aviation sector has the potential to drive economic growth and development, but it requires a stable and predictable regulatory environment. The report noted that the government’s failure to honor its agreements and provide a stable regulatory environment can deter investors and undermine the growth of the sector.
In light of this, it is essential that the Federal Government takes steps to address the challenges facing investors in the aviation sector. This includes ensuring that government contracts are transparent and accountable, and that investors are protected from arbitrary government actions.
By doing so, the government can create a stable and predictable regulatory environment that will attract more investment and drive economic growth and development.
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