Airport Concession and Labour’s Antics Against Private Sector Participation

Airport Concession and Labour’s Antics Against Private Sector Participation


The federal government has announced plans to concession Nigeria’s four major airports. These airports include; Murtala Muhammed International Airport Lagos (MMIA), Nnamdi Azikiwe International Airport Abuja (NAIA), Mallam Aminu International Airport Kano (MAKIA) and Port Harcourt International Airport (PHIA).

Recently, Hadi Sirika, Minister of Aviation received the Outline Business Case Certificate of Compliance for the concession.

The reason for the concession, according to the federal government, is to develop Nigeria’s major commercial airports and surrounding communities into efficient, profitable, self-sustaining, commercial hubs which will create more jobs and develop local industries through a Public-Private Partnership (PPP) arrangement.

In a recent document issued by the Infrastructure Concession Regulatory Commission (ICRC) it disclosed that the Federal Ministry of Aviation (FMOA) will be adopting Public-Private Partnerships (PPP) procurement methodology for expanding and further developing the Nation’s transport sector.

The FGN through the Ministry of Aviation has adopted PPP as the strategy to leverage private sector participation and investment to achieve the upgrade and development of a new terminal infrastructure at the four identified airports in a cost-effective and value for money based manner.

The prospect of airports being privatised has rumbled on for three years at least, attracting widespread opposition from trades unions in the country.

Now the government, after using loans from China to provide some infrastructure improvements, is persuading a highly belligerent labour to let the privatisation procedure go ahead, even if it is limited to concession agreements, possibly with strict time constraints before they are handed back.

Read Also: Airport Project to be Completed in 2022 – Ebonyi Govt.

 What is more – the government has promised to add other airports to such a scheme beyond the ‘big four’.

A few years ago, the Federal Government had suggested the idea of concession as the way out of the gross inefficiency and heavy losses at the country’s airports nationwide. Aviation workers’ unions, among other stakeholders, who had given an initial nod to the move, later turned their backs on the idea, citing some red flags.

The argument for privatisation was considered quite logical by analysts because the airports, both local and international, were in deplorable states, a condition that has earned them places among some of the worst aerodromes in the world. Fixing them required a lot of money that government could no longer afford. It was thus time to turn the facilities over to private investors who can run them efficiently and profitably.

Even the listening audience of aviation stakeholders could not agree less at the time, and they urged the concession plan to take off immediately. Now in 2021, with the airports still stuck in the tight and unprofitable grips of the Federal Government, the aviation workers’ unions are still up in arms against a planned concession that has been mooted again as the ultimate solution.

Last year, the Nigeria Labour Congress (NLC) led a coalition of aviation workers unions, including the National Union of Air Transport Employees (NUATE), Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) and Association of Nigeria Aviation Professional (ANAP), to embark on a nationwide protest against airport concession.

They warned that it was a dress rehearsal for the showdown that will welcome further moves by the handlers of the concession programme at the Ministry of Aviation. And other stakeholders were alarmed by how an initiative once thought to be noble by the same unions had turned ugly.

The unions, in a statement, alleged that the minister had usurped the responsibilities of FAAN in the concession, adding that the ICRC should have a statutory deal with the airport agency, rather than with individuals.

General Secretary of ATSSAN, Francis Akinjole, said it was regrettable that FAAN had nothing to do with any project identification, prioritisation, or concept note to the ICRC, as required by the ICRC’s protocol.

“The only role FAAN has played so far is that of a representative member on the Project Delivery Team (PDT) and the Steering Committee as appointed by the Minister. Therefore, the ICRC and the Ministry, by carrying on with the airports’ concession project outside the purview of FAAN, is indicative of an unwholesome agenda. Such action is, in fact, unlawful as it contravenes Part II, 3(g) of the FAAN Establishment Act, 2004 as well as the Civil Aviation Act, 2005.

“According to the National PPP processes of the ICRC, the Transaction Advisor (TA) is to be appointed through a competitive bidding process. We all know that the only way to assure a truly competitive bidding process is through open bidding but in this airport concession projects, there was no such bidding exercise known to the public,” Akinjole stated.

He added that ATSSAN was aware that the PDT was at a meeting discussing the issue of TA when they learnt that the FEC had just then announced the approval of the appointment of a TA. “While we agree that the PDT is not an approving authority, we must nevertheless state that the PDT is a vital organ of the PPP process with definite functions and mandates.

“Its functions form the foundation upon which the success of the entire PPP project rests. Therefore, by circumventing the functions of the PDT as the ICRC and the Ministry have done, particularly by the clandestine appointment of Transitional Advisor (TA), there is a clear case of violation of the process as well as a travesty against the Nigerian people,” Akinjole stressed.

President of the Nigerian Labour Congress, Ayuba Wabba, on behalf of the Congress, warned the Federal Government to desist from further contemplation, discussions and arrangements to concession international airports

“We call for social dialogue between government and labour on this. Organised labour and the entire Nigerian working class would resist any attempt to unilaterally concession any of our public airports thus undermining the directive, principles and fundamental objectives of our national constitution, which is actually the fulcrum upon which our collective identity and aspiration rest. We will not give up or surrender public assets to a few well-connected Nigerians, regardless of how powerful they may think they are,” he said.

He noted that the current concession drive of the government did not start today. “It has been part of the neo-liberal predilection of successive governments, stretching from the days of military rule up till the current democratic dispensation to privatise, deregulate, and concession critical national assets to their cronies and friends. Organised Labour has identified this approach to governance as reactionary, predatory and self-serving. We rejected the concession of our core national assets yesterday. We are rejecting it today!

The unwholesome and unpatriotic attitude of giving away our prized national property to private sector operatives is not only unjust and immoral but also in ultra-violation of Chapter 2, Section 16 of the 1999 Constitution of the Federal Republic of Nigeria on the Fundamental Objectives and the Directive Principles of State Policy states that The Nigerian government must manage and operate the major sectors of the economy and ensure that our economy is not operated to permit the concentration of wealth or the means of production and exchange in the hands of few individuals or of a group.

“It is important to note that while our airports, especially the ones earmarked for concession, were in states of eye sore and dilapidation, no private sector invested money towards its rehabilitation. It would be a grand insult to the collective intelligence of the Nigerian public for the Federal Government to invest a lot of public funds into the reconstruction and rehabilitation of our airports and then hand them over to private sector players for profit maximisation and at the expense of the taxpaying public. This is unjust. It is immoral. This cannot stand,” Wabba said.

Group Managing Director of Finchglow Group and Chairman of Airline and Passenger Joint Committee (APJC), Bankole Bernard, said that people did not understand what concession was all about, otherwise, they would not be against it.

Bernard explained that concession does not mean the transfer of ownership. The ownership of airports still remains in the coffers of the government, while the responsibility of managing those airports is transferred to private investors.

According to him, “when the concession is given to reputable hands, then they will deliver better service to the travellers, better service in the industry, and better service even to the regulators.”

For instance, he continued, “the airport terminal is what most travellers or users get to see; they do not get to see how the runway works. They do not get to see the management of the navigation aids. Those are sensitive facilities that should be in the hands of the regulator because that is the backend of the entire airport.”

“I will liken the union to a child. When you tell a child to stop playing rough or not to play with certain gadgets because it might be harmful, the child may not understand. So, more often than not, the unions are not well informed on the position. All they are seeing is that there is going to be a layoff of workers, but not the benefits that will come to all.” He noted.

Continuing, he said, “tell me, the Murtala Muhammed Airport terminal II (MMA2) was concessioned, are there no workers there today? Are they not getting their entitlements? Are they not better paid? Concession will guarantee a win-win for everybody, including the investors that have dropped the money. Now, governments’ money can be used for less viable airports nationwide. So, our viable airports should be given to the technocrats that can manage it better and make it more profitable. And the government stands to benefit at the end of the day.”

Also, Aviation Security Consultant, Group Capt. John Ojikutu (rtd), urged the government not to relent in the concession plan, but should be strategic in the process.

“If you are going to concession, don’t concession only Lagos, Abuja and Port Harcourt. Whoever takes Lagos must be able to take Ilorin, Ibadan and others with it. That is what some people are saying. My position is this: whoever takes Lagos must be able to go to another geographical area, be it in the east or north to take two others along with it.” He said.

For him, “if you do that, we are going to open up some of the airports that you called unviable to domestic routes.  This should go side by side with the multi-destinations that we are giving to foreign airlines at our airports. Like I suggested earlier, no foreign airline should go to Lagos and Abuja. You either go to Lagos or Abuja. If you go to Abuja, you take two or three other airports in other geographical areas but definitely not Lagos. Ditto for Lagos. If you do that with concessionaires and airlines too, the chances are that the foreign airlines can even partner the people in the scheme to develop all these airports.”

Stakeholders, however, called on the government to make the concession exercise very transparent with a view not to replace public monopoly with private sector monopoly, but one that would truly serve the interest of Nigerians.

Categories: Economy