Bolanle Akanji
Moderator
Source: Guardian
NIGERIANS and the economy will remain the
ultimate losers if the airport terminals are run as
handed over to private operators, according to
Managing Director of the Federal Airports
Authority of Nigeria (FAAN), Mr. George Uriesi.
But Bi-Courtney Aviations Services, the
concessionaires of the Murtala Muhammed
International Airport (MMA2) terminal,
Saturday, debunked FAAN’s claims saying the
deal followed due process and was devoid of
subterfuge or corruption.
Uriesi, who expressed strong reservations on
what he described as ‘doctored agreements’ to
cede national airport facilities to “private
interests,” said the arrangement left FAAN
almost bankrupt.
Following disagreements and litigations arising
from the concessioning of key services, the
Nigerian aviation sector has generally been in
the news for the wrong reasons. Central to the
recent altercations are FAAN, Bi-Courtney
Aviation Services, and the AIC Nigeria Ltd,
among others.
But FAAN says it is working with the Aviation
Ministry to explore the exit clauses in the
agreements, which, according to Uriesi, is
skewed against national interest.
“For the first time, Bi-Courtney has been tackled
smartly by FAAN. They are experts at obtaining
exparte orders and flashing them as Judgment.
It is not near the way it seems. We are working
smartly with lawyers to arrive at where we want
to. And I have no doubt that we are going to
arrive there. I don’t like the fact that we are
going through this; I would like us to resolve it,”
he said.
Uriesi, who spoke with The Guardian in an
exclusive interview, said global aviation
business, being a “captive” industry, allows
concession for effective airport management.
But such deals, according to him, are
structured in a way that “both the airport and
the concessionaire make money.”
Regrettably, he said, the scenario in Nigeria
became ‘fraudulently’ different and created
untoward opportunities for friends of
government to milk the country dry.
Said he: “Concession allows a fee that is usually
a percentage of the earnings. What is important
is that both the airport and the concessionaire
make money. But in Nigeria, it became a
different matter. It was a situation where
powerful people would look at the airport and
say it would be nice to collect money from the
place.
“They concocted arrangement that gave them
critical assets through their friends in
government to the detriment of the airport
itself. For many years, people got away with the
frauds.”
According to the FAAN chief executive, the
situation had a telling impact on the Authority
as government only struggled to maintain other
key infrastructures apart from the terminals
being run by the concessionaires.
“When I came and looked around, it was an
organisation that was struggling to pay salaries
and maintain the airports; it had a terrible
balance sheet with cash-flow problems.
“To rescue such organisation, the first question
was: why is the situation that bad? We started
looking at the concessions, and they were
baffling. I would be reading the concession
agreements in the night and would be furious.
It was robbery. When I discussed the possibility
of meeting with the concessionaires to re-
negotiate with them, they would say ‘leave this
one alone and concentrate on your assignment
because it is beyond you.
Yet, if the issue were not tackled, the
organisation would not be turned around. Many
of them started talking me down, saying: ‘who
is this, what is he going to do’?”
Uriesi said the issue was not that Bi-Courtney
was given a concession, but that “it was a
mismanaged concession. I cannot understand
how you can concession a terminal for 12 years.
I have heard of 15 years; in some cases 20 or
25. It is difficult to recoup your investment
within 12 years except you don’t know what
you are doing.
“Secondly, the concession was a piece of land,
which you could configure as you wanted. But
you now use the land to do car park, terminal
and have very small left for aircraft.
“You claim the terminal is four million or 4.5
million passenger capacity but you do not have
enough room for aircraft to park, which limits
your capacity. What they have is 14-aircraft
stand, forgetting that the main business is
airport. Hence, it cannot do more than two
million passengers because it has space for
only14 aircraft.
“The concession is for 12 years; but, because of
who they are, they have put a clause that says
there will be no other domestic scheduled
airline terminal in Lagos State for the period of
the concession. That is ridiculous!
“Going further, you now altered the period to
36 years, without changing the terms that are
already ridiculous for 12 years because you are
the master of the universe. The concession is
for 12 years but they have tried everything in
the books to extend it to 36 years.
FAAN approved the design of a terminal that
was N3.9 billion. What they built is not what
FAAN approved; they claimed to have built it
with N38 billion. Take a valuer there to find out
the actual cost of the terminal.
“A consortium of Nigerian banks lent them N38
billion for a 12-year concession…to build a
terminal on a 12-year concession with number
that will not return that kind of loan.
“They now went back to the government and
said, instead of N3.9 billion, we spent N38
billion, let us extend the period. They argued
that an international consultant said it would
take them 36 years to recover the investment.
That was irrespective of the fact that there are
already ridiculous terms for the 12-year period.
It does not make sense. Come let us re-
negotiate, they will say no.”
Reacting to the allegation that the controversial
concession agreement was written by Bi-
Courtney, the concessionaire, yesterday,
challenged Uriesi to publish FAAN’s version of
the agreement for Nigerians to see. Insisting
that the concession agreement was co-
authored with FAAN, Bi-Courtney’s spokesman,
Steve Ajulo, denied allegation of collusion with
government and FAAN officials.
He said the Authority now makes wide
allegations after losing all the court cases it
instituted against Bi-Courtney, while advising it
to take its grievances to the Supreme Court.
On the issue of extension, Bi-Courtney argued
that, although the original concession
agreement was for 12 years, FAAN itself
extended it to 36 years through a letter —
Supplemental Agreement — signed by one of
its directors on behalf of the Managing Director
at the time.
“It is not a matter of Bi-Courtney extending a
12-year concession to 36 years. FAAN wrote a
letter signed by a director on behalf of the MD
offering us 36 years and we replied to accept
the offer.”
“If you have been able to establish the case of
corruption in the process, you go to the court
and prove it. All these arguments have been
marshaled in the court of law and they failed.
These are wide allegations. What have they
been able to do with the officials we colluded
with in FAAN?; it actually means there is rot in
FAAN,” said Ajulo.
According to him, the concession arrangement
has an “opening,” including the Arbitration
Committee, for resolving disagreements.
“They (FAAN) took the matter to the
Committee, which took the issues one-by-one
and resolved them in our favour. They also went
to the Federal High Court and the Court of
Appeal and lost on all fronts. Now, they are
whipping sentiments.
“We believe in Nigeria’s legal system; the
Supreme Court is there. You can appeal to the
Supreme Court.
“As far we are concerned, that concession is for
36 years because everything has been settled
by the Arbitration. From the way official of FAAN
are talking, it is clear that they have not seen
the agreement. There are two agreements, the
original one and the Supplemental Agreement,
which increased the concession to 36 years.”
“The time the agreement was to take off, FAAN
didn’t allow it to take off because of
bureaucracy, which means that, from day one,
FAAN has been flouting the agreement.”
NIGERIANS and the economy will remain the
ultimate losers if the airport terminals are run as
handed over to private operators, according to
Managing Director of the Federal Airports
Authority of Nigeria (FAAN), Mr. George Uriesi.
But Bi-Courtney Aviations Services, the
concessionaires of the Murtala Muhammed
International Airport (MMA2) terminal,
Saturday, debunked FAAN’s claims saying the
deal followed due process and was devoid of
subterfuge or corruption.
Uriesi, who expressed strong reservations on
what he described as ‘doctored agreements’ to
cede national airport facilities to “private
interests,” said the arrangement left FAAN
almost bankrupt.
Following disagreements and litigations arising
from the concessioning of key services, the
Nigerian aviation sector has generally been in
the news for the wrong reasons. Central to the
recent altercations are FAAN, Bi-Courtney
Aviation Services, and the AIC Nigeria Ltd,
among others.
But FAAN says it is working with the Aviation
Ministry to explore the exit clauses in the
agreements, which, according to Uriesi, is
skewed against national interest.
“For the first time, Bi-Courtney has been tackled
smartly by FAAN. They are experts at obtaining
exparte orders and flashing them as Judgment.
It is not near the way it seems. We are working
smartly with lawyers to arrive at where we want
to. And I have no doubt that we are going to
arrive there. I don’t like the fact that we are
going through this; I would like us to resolve it,”
he said.
Uriesi, who spoke with The Guardian in an
exclusive interview, said global aviation
business, being a “captive” industry, allows
concession for effective airport management.
But such deals, according to him, are
structured in a way that “both the airport and
the concessionaire make money.”
Regrettably, he said, the scenario in Nigeria
became ‘fraudulently’ different and created
untoward opportunities for friends of
government to milk the country dry.
Said he: “Concession allows a fee that is usually
a percentage of the earnings. What is important
is that both the airport and the concessionaire
make money. But in Nigeria, it became a
different matter. It was a situation where
powerful people would look at the airport and
say it would be nice to collect money from the
place.
“They concocted arrangement that gave them
critical assets through their friends in
government to the detriment of the airport
itself. For many years, people got away with the
frauds.”
According to the FAAN chief executive, the
situation had a telling impact on the Authority
as government only struggled to maintain other
key infrastructures apart from the terminals
being run by the concessionaires.
“When I came and looked around, it was an
organisation that was struggling to pay salaries
and maintain the airports; it had a terrible
balance sheet with cash-flow problems.
“To rescue such organisation, the first question
was: why is the situation that bad? We started
looking at the concessions, and they were
baffling. I would be reading the concession
agreements in the night and would be furious.
It was robbery. When I discussed the possibility
of meeting with the concessionaires to re-
negotiate with them, they would say ‘leave this
one alone and concentrate on your assignment
because it is beyond you.
Yet, if the issue were not tackled, the
organisation would not be turned around. Many
of them started talking me down, saying: ‘who
is this, what is he going to do’?”
Uriesi said the issue was not that Bi-Courtney
was given a concession, but that “it was a
mismanaged concession. I cannot understand
how you can concession a terminal for 12 years.
I have heard of 15 years; in some cases 20 or
25. It is difficult to recoup your investment
within 12 years except you don’t know what
you are doing.
“Secondly, the concession was a piece of land,
which you could configure as you wanted. But
you now use the land to do car park, terminal
and have very small left for aircraft.
“You claim the terminal is four million or 4.5
million passenger capacity but you do not have
enough room for aircraft to park, which limits
your capacity. What they have is 14-aircraft
stand, forgetting that the main business is
airport. Hence, it cannot do more than two
million passengers because it has space for
only14 aircraft.
“The concession is for 12 years; but, because of
who they are, they have put a clause that says
there will be no other domestic scheduled
airline terminal in Lagos State for the period of
the concession. That is ridiculous!
“Going further, you now altered the period to
36 years, without changing the terms that are
already ridiculous for 12 years because you are
the master of the universe. The concession is
for 12 years but they have tried everything in
the books to extend it to 36 years.
FAAN approved the design of a terminal that
was N3.9 billion. What they built is not what
FAAN approved; they claimed to have built it
with N38 billion. Take a valuer there to find out
the actual cost of the terminal.
“A consortium of Nigerian banks lent them N38
billion for a 12-year concession…to build a
terminal on a 12-year concession with number
that will not return that kind of loan.
“They now went back to the government and
said, instead of N3.9 billion, we spent N38
billion, let us extend the period. They argued
that an international consultant said it would
take them 36 years to recover the investment.
That was irrespective of the fact that there are
already ridiculous terms for the 12-year period.
It does not make sense. Come let us re-
negotiate, they will say no.”
Reacting to the allegation that the controversial
concession agreement was written by Bi-
Courtney, the concessionaire, yesterday,
challenged Uriesi to publish FAAN’s version of
the agreement for Nigerians to see. Insisting
that the concession agreement was co-
authored with FAAN, Bi-Courtney’s spokesman,
Steve Ajulo, denied allegation of collusion with
government and FAAN officials.
He said the Authority now makes wide
allegations after losing all the court cases it
instituted against Bi-Courtney, while advising it
to take its grievances to the Supreme Court.
On the issue of extension, Bi-Courtney argued
that, although the original concession
agreement was for 12 years, FAAN itself
extended it to 36 years through a letter —
Supplemental Agreement — signed by one of
its directors on behalf of the Managing Director
at the time.
“It is not a matter of Bi-Courtney extending a
12-year concession to 36 years. FAAN wrote a
letter signed by a director on behalf of the MD
offering us 36 years and we replied to accept
the offer.”
“If you have been able to establish the case of
corruption in the process, you go to the court
and prove it. All these arguments have been
marshaled in the court of law and they failed.
These are wide allegations. What have they
been able to do with the officials we colluded
with in FAAN?; it actually means there is rot in
FAAN,” said Ajulo.
According to him, the concession arrangement
has an “opening,” including the Arbitration
Committee, for resolving disagreements.
“They (FAAN) took the matter to the
Committee, which took the issues one-by-one
and resolved them in our favour. They also went
to the Federal High Court and the Court of
Appeal and lost on all fronts. Now, they are
whipping sentiments.
“We believe in Nigeria’s legal system; the
Supreme Court is there. You can appeal to the
Supreme Court.
“As far we are concerned, that concession is for
36 years because everything has been settled
by the Arbitration. From the way official of FAAN
are talking, it is clear that they have not seen
the agreement. There are two agreements, the
original one and the Supplemental Agreement,
which increased the concession to 36 years.”
“The time the agreement was to take off, FAAN
didn’t allow it to take off because of
bureaucracy, which means that, from day one,
FAAN has been flouting the agreement.”