Stakeholders present at the Aviation Safety Round Table Initiative (ART) Breakfast Business meeting held last week have once again identified the arrangement of Public Private Partnership (PPP) as the anecdote to taking the country’s aviation sector out of its present predicaments.
The ART regular meetings often put together by experienced different professionals in the business of aviation have become the most consistent gathering where issues affecting the sector is put on the burner for deep discussions with solutions subsequently proffered.
At the latest ART meeting which centered on: ‘Funding Aviation Infrastructure Deficit in Nigeria Using Private Capital: Challenges and Prospects’, it was unanimously accepted that with the way things were going in the aviation sector particularly as it affects infrastructure, that the only solution rests on PPP.
Therefore, for any government seeking to expand infrastructure, the public-private partnership offers an option that lies somewhere between public procurement and privatization, as it brings private sector competencies, efficiencies, and capital to improving public assets or services when governments lack the upfront cash.
Obviously, as good as it is for any government to partner with private investors, certain conditions must however be considered for it to yield the desired results which include: a clearly defined terms of agreement that is flexible to amendment, ability to respect the agreement signed at all cost, need for representatives of both parties to have a good grasp of what they are about to commit their different interests to, ability to intelligently and transparently interpret the terms before signing the deal.
Going through all these will surely make the partnership achieve its aim and target for the two parties.
The different nations and individuals that had embraced this policy and still embracing it and keeping to the terms have sweet stories to tell as through such partnerships many countries have been able to successfully provide standard dividends to their citizens in their area of needs.
Nigeria’s aviation sector is no doubt one of the sectors of government going through myriad of problems including infrastructural challenges as witnessed in the obsolete structures adorning the different airports which required trillions of Naira to upgrade.
Some of the airports including the gateway airport in Lagos is still carrying the architecture of 1979 built after the Amsterdam Schiphol airport which has been transformed many times.
It is no longer news that it was during the tenure of former President Olusegun Obasanjo that the first PPP policy was embraced in the aviation sector through the agreement signed between the Federal Airports Authority of Nigeria (FAAN) and Bi-Courtney Aviation Services Limited (BASL) that gave birth to the beautiful edifice now popularly called MMA2 at the local wing of the Lagos local airport.
Unfortunately, this beautiful deal not quite long went bad as the government’s representative, FAAN suddenly woke up to question an already signed and sealed deal, while Bi-Courtney on the hand continues to stand its ground on why the existing agreement should remain. To back up its position, the MMA2 managers have since dragged government to court.
There are many other PPP arrangements in the sector that had gone sour which sadly has put a question mark on the credibility of partnerships in Nigeria amongst the circle of both local and international private investors.
The partnership between the maverick chairman of the Virgin Group, Sir Richard Branson to help set up Virgin Nigeria between 2004 and 2005 which finally hit the rock over attempts to change the rule of the game midway.
According to Branson: “We have Virgin’s ill-fated footsteps by setting up a new airline in Africa in conjunction with Nigerian government. Together a very good airline-the first airline in West Africa that was ever IOSA/IATA operational safety audit accredited but unfortunately it got tied down to the politics of the country. We led the airline for 11 years, we fought daily battle against government agents who wanted to daily make fortune from us, politicians who saw the government 49% as a meal to seek for all kinds of favour. Nigeria people are generally nice but the politicians are very insane.The joint venture should have been the biggest African carrier by now if the partnership was allowed to grow, but the politicians KILLED it. Nigeria is a country we SHALL NEVER consider to doing business again.”
For sure, these strong words that came from Branson which are still hunting PPP policy in the country, must have sent a very strong signal to private investors around the world about the danger of PPP policy as it affects the aviation sector.
Nigeria though, to an extent have shown interest in the PPP policy but unfortunately what would have been a positive move ended up in tears as majority of such deals in aviation ended up in courts.
The question now is; with the overwhelming challenges confronting the sector, will the government be able to woo private investors into partnerships that will help upgrade infrastructures and other airport facilities for seamless operations in view of the catalogue of failed PPPs in the sector?
Will the ghost of past bad partnerships not continue to hunt any PPP government is considering now as it plans to concession airports, float national carrier, mulls idea of assembling aircraft in Nigeria, building an aircraft maintenance hangar (MRO) among others. All these can only be achieved through a PPP arrangement but with the load of baggage hanging on its neck, how will these beautiful ideas become a reality.
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