Saving Nigeria’s Airports Through Private Sector Participation

If the Nigerian government and the airports authorities refused to accept the bad recent bad rating of the Port Harcourt international airport by the SleepingInAirports.net as the world’s worst, they must not contend that the disembarking of 32 passengers by Aero Contractors with an unauthorised equipment, a ladder at that, at the Bauchi airport recently is a bigger shame of a nation.

As Aero and the Federal Airports Authority of Nigeria (FAAN) bicker on the Bauchi airport saga, concerns are growing over the state of Nigerian airports and the need for private sector involvement in the management of the airports for better service delivery, improved revenue generation and increased contribution to the nation’s gross domestic product (GDP).

From the N400 billion said to have been spent by former minister of Aviation, Stella Odua on airports remodelling, through another $1 billion being put into aviation infrastructural development by the Chinese Government to the N63 billion reportedly demanded by FAAN before the end of the former president Goodluck Jonathan administration to build another runway at the Nnamdi Azikiwe International Airport in the nation’s capital, questions have come up regarding government’s continued investment and management of the airports.

States take share

Yet, there are states which now adopt airport ownership just for ego. Such states have built airports with billions of naira with no economic activities taking place at the airports.

For example, the Delta State Government under the Emmanuel Uduaghan administration built the Asaba airport with over N27 billion. Today, the airport has been downgraded by the airport authority and needs another $40 million to come on board again. Yet, it did not receive more than two aircraft in a day during the few months it was operational.

The Kebbi airport also gulped N17 billion, but remaining under the management of the stage government keeps the rate of returns low.

ome of the airports are better forgotten, as mere mention of their names is can be nostalgic. The Akure, Ibadan and Ilorin airports find themselves here. In the north, the Zaria and Makurdi airports are begging for commercial attention.

Aviation’s poor contribution to GDP

While aviation in South Africa and Kenya contributes as much as 25 per cent and 49 per cent respectively to the national GDP, Nigeria’s aviation manages to contribute a ridiculous 0.4 per cent. The trend has been blamed by experts on corruption and failure to involve generous private sector participation in the management of the nation’s airports, among other factors.

Towards resuscitating Nigeria’s airports, other experts recommend two radical solutions, especially for airports with a minimum annual traffic of five million passengers. The first is full privatisation, while the second is leasing (concessioning). The Conservative government in

Government can’t run airports alone; need for PPP

While addressing the the Senate ad-hoc Committee on Aviation recently, the managing director of FAAN, Mr. Saleh Dunoma said most of the facilities and equipment at the airports were obsolete as most of them were acquired over 30 years ago.

ndustry experts believe privatising or concessioning the airports, while the government retains ownership and maintenance of key airport infrastructure such as the runway, radar and lightings remains the best option for Nigeria.

Chief executive officers of Centurion Securities, Group Captain John Ojikutu said the plan of the federal government to privatise the aviation industry should not be comprised.

According to him, government should adopt the Public Private Partnership (PPP) for the four major airports in Lagos, Abuja, Kano and Port Harcourt in view of the limited resources for capital projects development towards the realisation of the industries’ potential.

However, in privatising the four major international airports, the federal government should ensure that it attaches at least two of the non-viable or smaller airports each to the four airports, advised Ojikutu.

He said, “The new government’s decision to privatise the airports is an indication that it has seen reasons to go back to the Privatisation and Commercialisation Act of 2000, which actually gave birth to the Murtala Mohammed International Airport 2 (MMA2) managed by Bi-Courtney Aviation Service Limited (BASL).

“But one thing I would appreciate this government to do is that they cannot just privatise the four major airports alone, because we all know that all the funds that are generated from the viable ones especially the airport in Lagos is what is being used to manage other 12 airports. So while privatising an airport like Lagos, whoever is buying Lagos should at least also be ready to buy other smaller airports, at least two smaller airports.

“The same thing for Abuja, the same thing for Port Harcourt airports. Government should avoid selling to anybody more than one of these airports. Whoever is buying any of these viable airports should also be ready to buy alongside the smaller airports. Some governments all over are against outright sale of airports that is why they are proposing PPP option to bring about some control where you have the investor maximising profit to the detriment of the passengers and security.

“All over the world, that is what is happening but what areas of the airport is being sold? I don’t expect the federal government to sell the control towers, landing runways. The terminal building like I always say is like a shopping mall. What the government should seek to sell is the terminal buildings. We have spent money in building airport terminals that are not regulated by the International Civil Aviation Organisation (ICAO) Annex 17. So, the area the government should concern itself is the safety and security aspects. So that is part of the partnership while the government is handling the security areas, the comfort areas such as the terminal, air-conditioners, car park, conveyor belts, those are public things the government should sell out and that is where the private sector comes in. Those are the areas we have spent too much money and have not yielded anything in aviation and it has not progressed aviation because most of the Nigerian airports today do not have landing lights.”

Captain Ojikutu also advised the states to privatise or concession their airports.

“They (the states) cannot just be building airports all over the place hoping that the federal government will take over. We have got six state airports now that the states have built. They too should be thinking of how to privatising their airports. Again, not the safety and not the security part of it because that is the responsibility of the government.

“The airports will only make returns if and only if they themselves find ways of generating traffic to those areas. One of the ways to generate traffic to that area is that if you are paying N1,000 for landing and parking, you can reduce the landing and parking to about N500. You find out that you can use the bigger airport as a hub for the smaller airports. You can even give them free holidays landing and parking for three years and this can develop traffic for these areas.

“The businessman knows how to get these airports working. It is only government that has problem with managing business. The airport is a business environment provided you sell it to the right people. I am not saying the government should sell it politicians because what they are going to do now is to sell it to politicians. There are people outside, who can come in and develop these airports for market purposes. A Nigerian bought Gatwick Airport for about four billion Pounds. There are people outside who would come into this country and make these airports work so that all the money we are wasting on terminal buildings, building cold rooms and warehouses for vegetables that we have not even planted. “What the government should do is exactly what they are doing in aviation by giving the terminals and other service providing areas to the private sector and face safety and security of aviation,” he explained.

Source:leadership