N712bn too small for airport upgrade, N3trn required – Aligbe
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By Dickson Omobola
Last week, Minister of Aviation and Aerospace Development, Mr Festus Keyamo, said that the Federal Executive Council, FEC, has approved N712.26 billion for the full rehabilitation of terminal one at Murtala Muhammed International Airport, MMIA, in Lagos. Since then, the Federal Government has suffered a wave of criticisms over the cost. In this interview, former General Manager, Public Affairs for defunct Nigeria Airways, Mr Chris Aligbe, among others, argues that N712 billion is insufficient to upgrade an airport to international standards.
Aligbe, now the Chief Executive Officer of Belujane Konzult, however, faults federal government’s decision to invest directly in the terminal’s upgrade, saying a concession agreement would have been better.
In aviation, a concession agreement grants a private entity (the concessionaire) the right to operate and manage specific facilities or services at an airport for a defined period, in exchange for investment and revenue sharing with the airport authority which, in this case, is the Federal Airports Authority of Nigeria, FAAN. Excerpts:
What is your assessment of the N712bn approved for the renovation of the old terminal at the Murtala Muhammed International Airport in Lagos?
Those who are criticising government’s decision to invest in the airport are too quick to do that. Maybe it is because our Naira has become almost powerless; that is why they think that N712 billion is too much to put together a modern airport. It is not. Airports cost up to $2 billion and above. There are those built with $5 billion. However, the amount of money that is being used to develop airports is usually not spent by governments these days. A few countries, who have money to spend, like the Middle East countries do. In Africa, there is Angola. Angola is an oil producing country, but I think it is not even doing so itself. Some other West African countries have done theirs themselves, but these are countries with just one airport. Their population is not very large, but the fact is that new developments have shown that concession is one of the best ways to finance airport development. There are two ways to finance airport development: finance it yourself, like government wants to do now, or concession it. But whatever the intentions are, transparency is required.
Although the Bureau of Public Procurement, BPP, is in charge of procurement and all, the minister cannot run away without explanation because he is in charge. He cannot abdicate. If you abdicate when you are in charge, then the challenge comes and people will begin to doubt, while wondering about transparency. It is not the responsibility of BPP to disclose those details to Nigerians. It is the responsibility of the Ministry of Aviation and Aerospace Development and the buck stops at the minister’s table.
You mentioned direct investment and concession as the two ways to finance airport development. Looking at the country’s current situation, which of these methods do you think would have been better?
I won’t blame government for wanting to invest in this project. If government has decided that it is a priority, then they will have to invest. But the fact is that: for people who say that the money is too much, it is not true, especially if they know what it costs to build a modern airport. This is long overdue. Some of us have argued for concession because we think that an airport that will serve Nigeria for a long time should attract at least $2 billion, but government does not have that kind of money.
There are so many things begging for government’s investment. But even if they do not put that down or they have that to put down, N712 billion (that is not up to $500 million) has been approved for the project. I disagree with those criticising it when I compare other airports. Some of us believe that the money (N712 billion) is not enough to give us a modern, global standard airport that will last for some years.
Government has shown us videos of what they intend to transform the old terminal into and how the international airport will look when they are done. What do you make of it?
Yes, I have seen graphics, I have seen designs, a smart airport and whatever the connections here and there. But what will be the capacity of that terminal in five years or two years? Will it be built to cope with the expected rise? Currently, we have challenges here, particularly economic challenges, but I think that eventually whether it is two years, five years, or 10 years, things will change. The air traffic population will rise again. What will be the capacity of that airport in the next five years? Can it cope with the expected rise in traffic in the next five, 10, 15 years? Do we have appropriate projections? What is the projection? It must be statistically proven.
We will look at the way things have gone and things are going in terms of growth in passenger traffic. Currently, we are experiencing a decline. We are not growing, maybe because of the economic situation, but I think the economic situation will not continue the way it is. We are about 200 million today or more. What will be the capacity of this airport when the traffic grows? And so how will this capacity cope with the projections? The ministry must come clear on that, so that we know what we are looking at.
Do you think government has given enough details about its plans for the upgrade?
Ethiopia is building a new airport. That new airport is about $2 billion. It is a greenfield airport. Ours is not a greenfield airport, but we are pulling down the entire terminal, so it is almost like a greenfield airport because all the structure will be pulled down. There are so many developments that they have noted that should be done in that terminal. Yes, but they should come clear. Every detail of it is not yet clear. Go to all the airports being developed. They will tell you how much is being spent. They tell you the passenger capacity, all the facilities that will be there. Everything will be clear so that people can engage.
You have consistently preached for concessions. Why?
Yes, I have talked about concessions over the years because when you concession, you are using other people’s money to build your airport, not your own money. When you talk about a concession, you are bringing technical expertise; and that concession, with proper arrangement, will give a better airport, a larger airport. There will also be technical competence put in place. Given that we decided to invest our money, what we should prepare for ourselves is to make sure that we create competency. It is not that we start looking for management concessions after building. It would be a terrible thing to spend this amount of money and look for management concessions.
While rebuilding, FAAN should be restructured to build the capacity that will manage it. During the period of rebuilding, enough funds should be voted for training and retraining staff. Again, my advice to government is that it ensures that while rebuilding, enough investment is made in FAAN to train technical people to learn from those managing the airports from which the concept will be taken. If government succeeds in building such a smart airport, it would be excellent for us. And that is why I say people who are criticising it do so because they do not know what the details are. They have not studied airports in other places, whether directly or indirectly. Terminal five that everybody is running to in Heathrow was built with about 5 billion pounds, and that is the best in Heathrow. In our country, we have come to the point that whenever something happens, people shout without knowing what they are talking about.
Meanwhile, a well-developed, well-prepared concession will be good for us because the money that we are using, wherever it is coming from, budget, Renewed Hope, or whatever, could have been invested in other areas. In the aviation industry, you use other people’s money to make money. With that kind of arrangement (concession), you have technical competence coming from the concessionaire. It is not the type of concession that is being touted for Enugu airport where there are 80 years rumours. 80 years is unheard of. No country in the world has done that. The longest I have seen is about 50 years in one Eastern European country.
Don’t you think the backlash is a result of lack of trust between government and the people?
I agree. It is one of the reasons. That is why I say we must be absolutely transparent. And then, FAAN must be involved. The Chinese terminal was built without the full involvement of FAAN. The repository of knowledge in airport development and airport management is FAAN. No other person has that knowledge as much as you can find in FAAN.
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