Nigeria’s Minister of Aviation, Hadi Sirika, has again explained why the Federal Government took the decision to concession some of the country’s airports, saying despite the huge potential abound, that the airports are currently operating at a sub-optimal level.
The airports set aside for concession are; Lagos, Abuja, Port-Harcourt, Kano and Enugu which coincidentally are the man at viable of the airports across the country.
According to the minister, the Federal Government is proposing between 20 and 30 years programme for the would-be concessionaire even as he declared that infrastructure concessions of this nature come with a significant financial obligation which any responsible concessionaire will no doubt be keen to recoup.
Under the concession policy, the Federal Government gave a condition that the 20 to 30 years duration may be extended depending on performance and Nigeria’s best interest and that the duration was not set in stone and will be subject to negotiation and then final approval by the Federal Executive Council.
The minister who spoke through the Director of Media, Ministry of Aviation, Dr James Odaudu, explained that, the concession policy that the Federal Government was starting with the most strategic assets saying the successful delivery of the concession programme would give all stakeholders the confidence required to consider other possibilities in the sector.
The concession Sirika declared applied to the non-aeronautic assets of the airports located in the Passenger and Cargo terminals, stressing that they are thus comprised of the assets from the entry door of the airport to the point of embarking plane, and from deplaning to the exit doors.
This space commonly referred to as the Passenger terminal comprised of retail spaces, waiting and seating areas, airport and airline lounges, baggage collection, check-in counters as well as administrative offices, while the Cargo terminals are comprised of the facilities between the point of entry and up to loading and off-loading points, including administrative offices within said facilities.
The Minister put to rest the argument that the airports were planned to be sold, saying: “There shall be no change in the ownership structure of the airports involved in this programme. What has been mandated by the Federal Executive Council is a concession programme.
“The decision of the government to settle for concession rather than outright selling of the assets is because of tremendous national importance from an economic and security perspective; adding, “We believe it remains in Nigeria’s best interest to maintain ownership for this reason.
“A concession is governed by a concession agreement whereby two parties – a private sector investor and a Public sector owner of an asset enter into an agreement that gives the Private sector investor the right to operate said asset for a specific business and within the Government’s jurisdiction, subject to certain terms that are agreed upon by both parties during the negotiation and contracting phase. It is thus a form of Public-Private Partnership whereby there is no transfer of equity between the contracting parties.”
While denying any conflict of interest between the planned concession and China construction giant, China Civil Engineering Construction Corporation (CCECC), the minister added: “There is no conflict. China Civil Engineering Construction Corporation (CCECC) was contracted to deliver a number of infrastructure projects throughout Nigeria in 2013. The Passenger Terminal development works are a small part of this, and the Federal Government has every intention to service its obligation.”
On how to select preferred bidders for the airports to be concessioned, the Minister hinted that the Infrastructure Concession Regulatory Commission (ICRC)– the institution that oversees all concession and Public-Private-Partnerships in Nigeria had clearly laid out processes governing a transaction like this.
The Transaction Advisors – a coalition of independent and reputable organisation, he said have been mandated by the Ministry of Aviation (having received approval from the Bureau of Public Procurement for their appointment) to drive this process transparently, ensuring that regulations laid out by the ICRC are followed whilst also ensuring that Nigeria gets the best partner(s) and deal possible given the unique attributes of the assets to be concessioned.
His words: “We now have OBC Certificates of Compliance from the Infrastructure Concession Regulatory Commission. We are currently finalising the documents required for the procurement phase, after which we will commence the next stage of the process, i.e. publishing a Request for Qualifications (RFQ) – a critical phase of the public procurement process. The RFQ will give interested parties, local and international, ample time to prepare their submissions. Once the deadline for submission has been crossed, we will then begin the pre-qualification process. Only Pre-qualified parties will be invited to respond to a Request for Proposal (RFP), which will also be published as per ICRC guidelines and general best practice in Public Procurement.”