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No alternative to airport concessioning

By Dele Sobowale

‘BETTER late than never” remains the word of wisdom when a measure long delayed had caused immeasurable damages to a nation until it can no longer be avoided. For too long and out of fear of a small minority of selfish individuals calling themselves Labour Unions, governments continued to operate commercial enterprises long after it had become glaring to all other stakeholders that governments are incapable of running businesses successfully.

Akanu-Ibiam-International-Airport

The recent announcement by the Federal Government, FG, to concession four Federal airports – Murtala Mohammed International Airport 1, MMA1, Lagos; Nnamdi Azikiwe International Airport, Abuja, Kano and Portharcourt Airports is half a step in the right direction. In reality, the FG has not gone far enough in this direction. All airports owned and operated by the FG should have been offered to private operators at the same time.

The reasons are not difficult to understand to all by any clear-minded person except the self-serving members of the various unions operating at those loss-generating airports. With the possible exception of the MMIA 1 and the Abuja airport, no other airport in Nigeria operated at a profit for over ten years. Most of them, like Ibadan, Akure and Yola were established for political reasons not because they were ever expected to be viable.

Consequently, they have constituted a drain on national financial resources since their inception while serving a very small minority of the elite and the unions. For the vast majority of Nigerians the airports serve no purpose whatsoever; the majority of our people subsidise the tiny minority of air travelers and the unions.

Such a subsidy could have been partly defended if the country is financially buoyant and if the subsidy would later accelerate economic and social development in the areas where the airports are situated. But, Nigeria has never been so comfortable as to afford the luxury of airports which operate one or two flights a day and the planes only twenty-five per cent loaded. That has been the case with some of the worst airports. At any rate, collectively they have yielded no returns on the investments that have been made and will never do so as long as those who use them are not paying the total bills.

Government-owned airports, generally white elephant projects, have served several political purposes. They have constituted a source of patronage for politicians. Party members are appointed to the board of directors of the airports and padded contracts are awarded to party members making the airports unprofitable to manage. Staffing is also subject to nepotism not professional competence and diligence. In short, we have established airports which are guaranteed to fail irrespective of which government is in power because what is supposed to be a business is run like a family affair.

Now, with sharply dwindling financial resources, the present Nigerian Government is just learning what had become global practice for more than twenty years. No advanced country owns and manages airports anymore. All governments do is to establish regulatory authorities charged with ensuring that airports and the aviation sector are managed in conformity with global standards by the private sector investors who build and manage them. Governments have freed the resources that would have been tied down in airports for investment in other areas like education, health and environment – things that are difficult to hand over to the private sector to manage.

Incidentally, it is instructive that the only private airport in Nigeria today, the MMIA 2, built by Bi-Courtney, is profitable and it is also regarded as one of the best in Africa. No other airport in Nigeria has that reputation. That should not surprise us. The private sector has proved over and over again that it can deliver superior service to customers at any time and they have been doing it with airports worldwide. There is no reason to doubt that they can do it again in Nigeria.  In fact, concessioning airports should serve as the starting point towards concessioning refineries, roads, ports and even hospitals.

That said, it needs to be admitted that two majour obstacles remain. The first is a collective responsibility of Nigerians to overcome; the second can be handled by the FG alone.

The first problem we must tackle is the threat by the unions to go on strike if airports are concessioned. That should not deter the FG from going ahead with the decision which is in the interest of almost hundred per cent of Nigerians whereas the unions constituting less than one half of one per cent are fighting to perpetuate a situation where their members in may airports idly wait all day for flights that seldom arrive. Paid idleness is what they want to perpetuate and the rest of us simply have to say “Enough is enough”.

At any rate, those of them who are good workers will still have jobs in the new scheme of things. It is the dead wood, mostly uneducated and untrained individuals foisted on the management of airports by politicians who will have to go. They have to go because the global standard calls for workers who make significant contributions to the operation of the airports not specialists in sleeping on duty. So, Nigerians must give total support to the FG when the unions go on strike. In fact, the FG should use the opportunity of the strike action to get rid of those already considered redundant.

The second problem was caused by the governments of Yar’Adua and Jonathan when they unilaterally voided the agreement reached between the FG under Obasanjo and Bi-Courtney – to which MMAI2 was concessioned. The global investment community is a closed fraternity; those which specialize in airports concessioning can be counted on the fingers of one hand. None of them will take interest in the airports now on offer unless the Buhari administration reaches a settlement with Bi-Courtney.  That should be very easy to do and I think I have an idea how it can be done.


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