After the Federal Government and Bi-Courtney Aviation Services Limited (BASL) ended the two-decade-old legal duel over the Murtala Muhammed Airport 2 (MMA2), that stalled investment, distorted revenue flows and limited infrastructure development within the nation’s busiest aviation hub, stakeholders, apart from hailing the breakthrough as a catalyst for infrastructure expansion, are also excited about the Lekki-Epe Airport project, which has just received fresh momentum. OLUSEGUN KOIKI reports.

The resolution between the Federal Government and Bi-Courtney Aviation Services Limited (BASL), the operator of the Murtala Muhammed Airport Two (MMA2) in Lagos, has temporarily brought to an end an impasse that has stalled industry development for almost two decades.

If followed to the letter, it would also eliminate the proviso in the agreement between the Federal Government and BASL that prohibits the construction of other airports in the state during the concession period.

Industry experts, however, are quick to point out that both parties should tie up loose ends to prevent future crises, especially in a Public-Private Partnership (PPP) deal.

Also, the Minister of Aviation and Aerospace Development, Festus Keyamo, has reiterated that the 36-year Design-Build-Operate-Transfer (DBOT) agreement reached by both parties remains in effect.

Keyamo, in a chat with The Guardian over the weekend, maintained that the concession period as stipulated in the 2007 addendum would run till May 6, 2043, having commenced on May 7, 2007.

Keyamo further told The Guardian that all the parties involved in the execution of the concession had agreed to the terms and conditions before he tabled the issue at the Federal Executive Council (FEC).

He said: “The concession period provided for in the addendum dated 2nd February 2007, where parties agreed to extend the concession period to 36 years commencing on 7th May 2007 and terminating on 6th May 2043; (This is as affirmed by the courts).

“All parties agreed to these terms before we approached the Federal Executive Council.”

However, various documents obtained exclusively by The Guardian over the weekend indicated that numerous approvals were granted for concession agreements between the Federal Government, through the Federal Airports Authority of Nigeria (FAAN), and Bi-Courtney Ltd.

For instance, the first concession agreement, a 102-page document that approved the construction of the terminal, was signed on April 24, 2003, between the Federal Government, represented by the Minister of Aviation and FAAN, on the one hand, and Bi-Courtney Limited and Stabilini Visinoni Limited.

The document was signed by the then Minister of Aviation, Dr Kema Chikwe, on behalf of the Federal Government in the presence of a staff member of the Federal Ministry of Aviation, Dr Imoro Kubor.

This approved a 12-year concession period, while the construction period was 18 months from the construction commencement date, or a longer period as may be granted by FAAN.

The initial agreement also approved approximately 35,000 square metres for the terminal to be built upon, including the terminal building, fingers, car parks, overhead pedestrian bridge, fence, boreholes, water treatment house, firefighting facilities, sewage treatment and pumping plant, powerhouse, communication facilities, and all appurtenances.

The concession agreement further assured that “all scheduled domestic flights in and out of FAAN’s airport in Lagos State shall, during the concession period, operate from the terminal.”

It further assured that it would not, during the concession period, cause or authorise the erection or development of a shopping mall or any facility/facilities within 200 meters of the perimeter of the site, capable of impeding and/or threatening the concessionaire’s revenue generation.

The agreement also directed the concessionaire to remit to FAAN five per cent of its annual turnover as a concession fee. The amount was to be paid quarterly within 30 days from the end of each quarter.

Besides, another document, a 14-page material, dated February 2, 2007, indicated the lease agreement between FAAN and Bi-Courtney Ltd for the development and management of a four-star hotel at Lagos airport with the project size of “10,800 square metres lying and situate at the Murtala Muhammed Airport.”

The lease agreement also specified that the lessee (Bi-Courtney Ltd) would pay to the lessor (FAAN) an Annual Ground Rent (AGR) in the sum of N16,200,000 at the rate of N1,500 per square metre. The AGR was to be paid in advance to the lessor at its Lagos office.

The lease agreement also indicated that Bi-Courtney would pay FAAN 10 per cent of the AGR as a service recovery charge, and another five per cent of the hotel’s annual business turnover.

Another 14-page document, dated February 2, 2007, also approved the construction of a conference centre measuring 8,206.691 square metres by Bi-Courtney at the Lagos airport.

The terms and conditions at the conference centre were similar to those of a four-star hotel.

FAAN, in another document, insisted that there was no approval from the Federal Executive Council (FEC) for extension of the concession agreement from 12 to 36 years, despite the suggestion by the then Minister of Aviation, Femi Fani-Kayode.

But, an addendum agreement from BASL claimed the 36-year approval was granted by the Federal Government before the completion of the terminal project.

Almost from inception, the relationship between BASL and FAAN was mired in disputes over contract terms, revenue remittances and operational rights.

Despite the disagreements, the current breakthrough, brokered by Keyamo and announced last Thursday after the FEC meeting, effectively ended a contentious concession disagreement that has lingered for almost 20 years, stalling investment, distorting revenue flows and limiting infrastructure development within the nation’s busiest aviation hub – Lagos.

Keyamo, in a press briefing at the State House last Thursday, said that under the terms of the negotiated settlement, Bi-Courtney has agreed to write off the N132 billion Supreme Court judgment debt previously owed by the Federal Government.

Also, the company, he said, had relinquished the exclusivity clause tied to the MMA2 concession and has handed back the Murtala Muhammed Airport Terminal 1 (MM1) to the Federal Government.

In return, he explained the Federal Government has restored to Bi-Courtney the rights to complete and operate the long-stalled hotel and conference centre project on a mutually beneficial revenue-sharing basis. The hotel, he said, must be completed within two years.

Plans are also underway to relocate regional flight operations to MMA2, with provisions for apron expansion to accommodate increased traffic, as needed.

“It also clears longstanding encumbrances that have hindered broader infrastructure development, including the proposed Lekki International Airport project.”

Commenting on the development, a former Director-General of the Civil Aviation (DGCA), Nuhu Musa, said the reconciliation was a necessary step towards unlocking stalled projects.

For instance, he explained the resolution removed a major legal and operational bottleneck that had hindered progress on the proposed Lekki-Epe Airport project.

He stated that Lagos State needed multiple functional airports to truly evolve into a global aviation hub, but this was stalled by the crisis between the Federal Government and BASL.

He argued that Lagos, as Nigeria’s commercial capital and primary aviation gateway, required expanded airport capacity to accommodate growing passenger and cargo traffic.

Musa added that another major benefit of the agreement was the potential to enhance revenue generation within the aviation ecosystem.

The former DGCA, however, emphasised the need to maintain strict adherence to international safety and security standards, as recommended by the International Civil Aviation Organisation (ICAO), for the approval of regional flight services for the terminal operator.

He emphasised that international best practices, such as separating arriving and departing passengers and segregating domestic and international travellers, must be fully implemented and adhered to.

Musa also said that the completion of the MMA2 hotel and conference centre was expected to boost non-aeronautical revenues, an increasingly important income stream for modern airports worldwide.

He maintained that the planned relocation of regional flights to MMA2 was also expected to increase passenger throughput, stimulate commercial activities within the terminal, and improve asset utilisation.

Babalakin

“These are not optional standards; they are critical for safety and security. I believe the authorities would have ensured compliance before approving regional operations.

“The hotel is essential. It will improve passenger convenience, support transit operations and generate additional revenue for all stakeholders.”

Also, aviation analyst Alex Nwuba said the resolution was a decisive step towards restoring investor confidence and regulatory clarity.

He regretted that the dispute exposed deeper structural weaknesses in Nigeria’s PPP framework, including inconsistencies in regulatory enforcement, ambiguity in contract drafting and the disruptive impact of policy reversals across successive administrations.

According to Nwuba, the resolution showed a growing recognition within the government that unresolved legacy disputes pose a significant threat to infrastructure development.

He said: “This resolution sets a significant precedent because it signals to both local and international investors that the government is willing to resolve legacy disputes, honour contractual obligations, and create a more predictable environment for long-term aviation investments, and it also demonstrates that PPPs in Nigeria can survive political transitions if the underlying agreements are structured clearly and managed professionally.

FAAN MD, Olubunmi Kuku

“This simply means that future concessionaires may feel more confident committing capital to airport terminals, cargo facilities, and ancillary infrastructure knowing that disputes will not be allowed to linger indefinitely or derail the entire investment framework.”

He insisted that the aviation sector must build on this moment by strengthening governance structures, ensuring transparency in concession agreements and fostering a more stable operating environment, stressing that if sustained, the resolution of the Bi-Courtney dispute could serve as a blueprint for future PPP engagements across other critical sectors of the economy.

Besides, aviation analyst Chris Amokwu said the successful resolution of the MMA2 dispute would signal a new era for Public-Private Partnerships in Nigeria.

According to him, for years, investors had expressed concerns about the sanctity of contracts and the risks associated with infrastructure concessions in the country.

He said that by demonstrating a willingness to renegotiate terms and resolve disputes amicably, the Federal Government was sending a positive signal to both local and international investors.

He said: “This is a significant step forward. It shows that the government is committed to creating a stable and predictable investment environment.”

Amokwu also stressed the importance of maintaining transparent and accountable processes in any contractual agreements to prevent a recurrence of past disputes.

However, when contacted, BASL declined to comment on the issue, but a source close to the terminal operator expressed delight with the resolution of the dispute.

The source explained that the agreement reached would be formally signed by both parties very soon.

The source said: “It is a win-win for everyone. We are happy that the issue has been laid to rest. Officially, I can’t comment now, but you will definitely hear from us very soon.” (Guardian)