The insistence of the Federal Government to concession the four most viable airports in Nigeria is once again raising some dust. OLUSEGUN KOIKI writes.

When the Federal Government in 2024 renewed its drive to concession Nigeria?s four most commercially viable airports ? Lagos, Abuja, Kano, and Port Harcourt, it rekindled an old debate that has trailed the nation?s aviation sector for years: can Nigeria trust private hands to deliver efficiency and modern infrastructure where government bureaucracy has failed?

On paper, it was a good idea. Globally, airport concessions and Public-Private Partnerships (PPPs) have transformed major gateways into world-class facilities. From Delhi in India to Johannesburg in South Africa, the model has unlocked billions of dollars in private capital and spurred passenger growth.

But in Nigeria, where mistrust runs deep and memories of the Nigeria Airways liquidation still sting, the plan again faced resistance, especially from labour unions, who are insisting on full implementation of extant labour laws for their members in the Federal Airports Authority of Nigeria (FAAN).

Also, some industry experts and even investors doubted the transparency and financial structure process, but agreed that airport concession was the solution to the massive infrastructural decay in the industry.

However, the current government, led by the Minister of Aviation and Aerospace Development, Festus Keyamo, assured that, unlike in the past, every step taken by the government would be transparently executed, while the industry unions would be carried along.

Four airports bring 96.4% of FAAN?s revenue

A document obtained from FAAN revealed that the four airports slated for concession accounted for a staggering 96.4 per cent of FAAN?s total revenue of N382.1 billion in 2024.

The Murtala Muhammed International Airport (MMIA), Lagos alone, generated 67 per cent of the agency?s total income, amounting to N256 billion. This is followed by Nnamdi Azikiwe International Airport (NAIA), Abuja, with N81 billion (21.3 per cent), while Kano?s Mallam Aminu Kano International Airport (MAKIA) and Port Harcourt International Airport (PHIA) contributed N20.2 billion and N10.7 billion, respectively.

By contrast, the remaining 16 airports combined ? including Enugu, Sokoto, and Ibadan ? generated less than N3.6 billion, a mere 0.9 per cent of FAAN?s total earnings.

This sharp revenue imbalance is precisely why many currently believe the government?s decision to concession only the four ?big earners? could cripple FAAN?s finances and reduce its capacity to maintain the smaller airports that depend on internal cross-subsidies.

Past distrust

Barely a week to the exit of the former Minister of Aviation, Sen. Hadi Sirika, the government announced preferred bidders for three of the four major airports slated for concession.

Sirika mentioned an international consortium, composed of Corporac?on America Airports (CAAP) and Mota Engil Group (Mota Engil), along with their local Nigerian partners, as the concessionaires to invest, upgrade and operate landside and terminal operations at the Abuja and Kano airports, respectively.

For the Lagos airport, the government also named TAV/NAHCO/Project Planet Limited (PPL) Consortium as the preferred bidder, while the government failed to secure a reliable concessionaire for the Port Harcourt Airport, according to Sirika.

Additionally, the government gave all the preferred bidders a deadline to make a financial commitment for the allocated airports, but none invested their resources in the project, likely due to the warning from industry unions.

Sirika promised that the private operators would ?invest, upgrade and operate? the landside and terminal facilities, while the government would retain ownership of the airports.

But what followed was silence as none of the preferred bidders made the required financial commitments. Earlier, three aviation unions ? the National Union of Air Transport Employees (NUATE), Air Transport Services Senior Staff Association of Nigeria (ATSSSAN), and Association of Nigeria Aviation Professionals (ANAP) ? jointly warned investors to stay away, describing the process as ?sheer wastefulness.?

They insisted the Federal Executive Council (FEC) approval cited by Sirika was ?a ruse,? and hired the law firm of Femi Falana to challenge the concession in court. The case effectively froze the exercise.

Expert submissions

Speaking on the issue, the Managing Director, Aero Contractors, Capt. Ado Sanusi said that airport concessioning was the best option for the government to grow the sector, but canvassed for the right regulatory framework.

According to him, when critical infrastructure like airports is handed over to the private sector under the right regulatory framework, they tend to be run more efficiently, sustainably, and with greater customer satisfaction.

He posited that if executed correctly, concessioning could bring in private sector efficiency, new investment, and enhanced service delivery without compromising safety or regulatory oversight.

He added: ?Government-run airports, on the other hand, often face challenges of bureaucracy, inefficiency and limited investment. For Nigeria to truly modernize its aviation sector and compete globally, concessioning under a strong regulatory framework is the better option.?

Also, the Chief Executive Officer (CEO) of Belujane Konsult, Chris Aligbe, said the concessioning option was the best for the country.

He insisted that without the concession of the airport, the country would never have a world-standard facility, while bureaucracy would continue to slow it down.

Aligbe also expressed that the developmental plans for each concessioned airport should be made public, agreed to by both parties and followed to the letter, maintaining that the concession agreement for each airport would also be different from the others.

Besides, he stated that there are several models of airport concessions that the government could choose from.

He mentioned management concession, Build, Operate and Transfer (BOT), Build, Own, Operate and Transfer (BOOT) and the Develop, Operate and Transfer (DOT) models as some of the models the government could choose from.

Aligbe also posited that Nigeria lacked the financial resources to build a global standard airport, while also condemning the reconstruction or refurbishing of terminals slated for concession by the government.

He specifically said that the planned reconstruction of the Lagos international airport terminal one by the government had generated confusion, adding that the N712 billion earmarked for the project was grossly inadequate for a state-of-the-art facility and an airport for the future.

Aligbe also pointed out that no airport concession should exceed 30 to 35 years and be renewable, if necessary, while all the essential legal approvals are obtained by the government and the investors.

In his comment, the Managing Director, Aviation Africa Plate-Forme (APP), Dr. Frank Ogochukwu, said that the plan to concession Nigerian airports was consistent with global trends but insisted that execution and regulation were key.

According to him, concessioning of airports is a tool to unlock private capital, modernize infrastructure and improve operational efficiency, but he feared that without strong regulation, there is a risk of unfair tariff increases, labour displacement, and skewed revenue sharing.

Ogochukwu pointed out that Europe leads in concession models and mentioned airports like Heathrow, United Kingdom, Schiphol, Netherlands, and Frankfurt, Germany, as some of the airports, which are either under private management or partially privatized.

He added that India?s Delhi & Mumbai Airports? successful PPPs led to world-class infrastructure, while Kotoka International Airport (Ghana) was modernized under a PPP with international support, leading to improved service quality and higher passenger satisfaction.

Ogochukwu in his statistics said that within 10 years of concessioning, Delhi Airport passenger numbers rose from 23 million (2007) to 57 million (2019), Turkey (Istanbul Airport), built through a PPP concession model, handled 64 million passengers in 2022 and South Africa (ACSA) operates airports (O.R. Tambo) had continued to maintain international hub status, attracting global carriers.

In Nigeria, he said the service remained low according to Skytrax, while Addis Ababa and Johannesburg airports processed more passengers than the Lagos international airport.

He lamented that in terms of Africa ranking, none of Nigeria?s airports was in the top 10, while Addis Ababa, Johannesburg, Cape Town (South Africa) and Casablanca (Morocco) dominate.

Besides, a former Director in the Ministry of Aviation and Aerospace Development, Hassan Ejibunu, said that the concessioning or privatization of Nigerian airports was long overdue.

Eijbunu, who is also the Agent of Foreign Airline Holders in Nigeria, stated that government control of the airports had not yielded any positive results for the country.

He raised the alarm that the level of infrastructural decay of the airports was very alarming and required urgent attention from the government, adding that Nigeria by its geographical location, is the hub of aviation for Africa and the entire globe, but regretted that the sector had been lagging over the years.

Besides, General Secretary of ATSSSAN, Comrade Frances Akinjole, told The Guardian that while unions were not against concession as a concept, they rejected any ?selective concession? that targets only profitable airports.

?If the government insists on concessioning, it should concession all airports, including runways and support services,? he said. ?Otherwise, it?s a disguised privatization of public assets.?

Akinjole added that the unions? position included a demand for an up-to-date actuarial valuation of FAAN?s pension liabilities and guaranteed job protection clauses in any concession agreement. (The Guardian)

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