Reps set up sub-committee on proposed airport concession, lament profit-sharing arrangement
The House of Representatives on Tuesday resolved to set up sub-committee to interface with the Federal Ministry of Aviation, the Financial Adviser, (FAD) and the Project Delivery Team, (PDT) on the proposed airports’ concession by the Federal Government.
Chairman, House Committee on Aviation, Hon. Nnolim Nnaji disclosed this in Abuja, after the presentation of the Minister of Aviation, Senator Hadi Sirika on the Nigerian Airport Concession Strategy, who assured that the airport terminals concession will not lead to job losses, adding that the assets to be concessioned are: cargo terminals, airport terminal buildings, Aprons and Car Parks.
Some of the lawmakers who spoke during the investigative hearing including Hon. Linda Ikpeazu queried the rationale behind concessionning after Federal Government had fully funded the remodelling through borrowing, for which paltry 40% revenue sharing formula would be for the Federal Government while 60% of the revenue goes to the concessionaire.
Hon. Ikpeazu who queried the concessionning of already profitable/viable assets, however, urged the government to redirect the planned concession in such a way that it would bring about the development of new airports, reduce airfare and other areas that would help to increase patronage.
Hon. Ikpeazu who frowned at the development observed that the concessionaire which has no role to play in the repayment of Chinese loan is the major beneficiary of the concessionning while Federal Airport Authority of Nigeria (FAAN) has a huge liability of remitting 25% operational cost into the Federation Account and payment of salaries.
According to him, the sub-committee is to review the reports of the FAD and the PDT which according to the chairman fell below expectations, also requested for the Assets Evaluation Report of the affected airports, (AER), cash flow of the airports, (up for concession), for the last five years, copies of all existing concessions on the four airports the on-lending agreement, repayment schedule and every other document pertaining to the Airport concession.
In his opening remarks, Hon. Nnaji emphasized that the intervention of the committee was not intended to oppose the policy of the executive but to make sure that Nigeria and Nigerians are not shortchanged.
“Our aim is not to unnecessarily meddle with the policies of the executive but as the representatives of the people, we would not close our eyes to issues that may create instability and unrest in this critical sector. This prompted our earlier meeting with the leadership of the aviation unions and the Nigerian Labour Congress,” the chairman stressed.
Hon. Nnaji recalled that the concerns raised by the labour unions warranted the committee’s letter to Ministry Aviation requesting for the copy of outline business case for the concession, the Chinese loan agreement for the four airports slated for concession, report of the project delivery team, (PDT) and the report of the financial adviser, (FAD).
Hon. Nnaji had also in his opening statements said, “in addressing this matter, l expect all of us to be sensitive and show understanding to safeguard the industry and the national economy.
“l equally expect all parties to be prepared to shift positions were necessary for the interest of peace and harmony. There should be no rigidity on the part of labour and the ministry. Let everyone be guided by one ideal- the overall interest of the nation,” he added.
According to the Minister, the approved aviation sector roadmap include: Airport Concession, Establishment of a National Carrier, Maintenance, Repair and Overhaul Centre, Development of Agro-Allied Cargo Terminals, Establishment of an Aerospace and Aviation University, Establishment of Aviation Leasing Company, Development of
an Aerotropolis (Airport City), Search and Rescue and Establishment of five Airport Free Trade Zones.
According to the documents presented to the Committee, some of the challenges faced on the resumption of duties in November 2015 include recession, falling in price of oil price, inadequate safety, security and surveillance equipment, dilapidated infrastructure and obsolete equipment, external debt of $1 billion Chinese terminal buildings, a large number of unemployed trained professional Nigerian aviators, high debt profile of domestic airlines operators and local debt burden – AMCON, Bi-Courtney, Sanderton Ventures Ltd, etc.
The Minister, Senator Hadi Sirika had also assured the committee that the entire exercise would be transparently carried out and that the ministry would cooperate with the subcommittee to ensure that proper things are done.
The meeting was adjourned for continuous interactions to review the progress until all the contentious areas are resolved.