The Asaba International Airport, built by Dr. Emmanuel Uduaghan government in 2011, typifies the fate of public-owned enterprises in Nigeria. It became an addition to dozens of such airports across the nation – built by government, run by government. And true to type, they perennially run at a loss. Aviation authorities say only the Nnamdi Azikiwe International Airport in Abuja, Port Harcourt International Airport and the Murtala Muhammed Airport in Lagos are able to generate their running costs. And that, just barely. Every other airport (over 20 of them) is a burden to the government. And this includes the Asaba Airport. It has been a burden to the state government. But that was not the intendment of Uduaghan. Never!
So, on Tuesday, February 23, 2021, Governor Ifeanyi Okowa, decided to cede temporary ownership of the airport to a private equity, especially one that has demonstrable capacity, technical expertise, and capital to run the enterprise. It’s called concession.
Nigerians love the good life. They are one of the most widely travelled species of homo sapiens. They savour the opulence of First and Business Class sections of the best airlines. They land at the biggest and best airports in the world. Each time you land at the Dubai International Airport, Los Angeles International Airport, Tokyo Haneda Airport, London Heathrow Airport, Paris-Charles de Gaulle Airport or the luxuriant Singapore Changi Airport, you will, without fail, find Nigerians there, shopping or just lounging.
Nigerians love the lavishness of the good side of life, but they don’t want to pay the price. They love the incandescence of great airports, yet they shut their eyes to those things that make those airports great. It’s the same with the luxury hotels around the world that Nigerians love to lodge in and be spoiled. Most of these airports, hotels and even airlines are products of concession, whether in part or in whole.
This is what Okowa wants to achieve with the concession of Asaba airport. He has ceded its management to a private equity to manage for 30 years and then return it to the state. It’s the same way ownership and management (whether in part or whole) of smarter and now profitable airports around the world were ceded to private equities by their original owners: the government. Okowa did not sell the Asaba Airport. He did what a responsible leader should do. Get the over N40 billion investment into the hands of experts so they could turn it from liability to profitability.
Rather than applaud the courage to do what the Nigerian government has not been able to do to its moribund airports guzzling state funds without any return on investment, some hirelings and political jobbers are scouring through cyberspace vending a toxic theory that Okowa has sold Asaba airport for cheap. This is the stuff of the ignoramus, the infantile slurred thinking of a demented mob. How, in the 21st century, is it difficult to understand the basic economics of concession, especially of an airport which since inception has been mired in administrative cesspit, manacled by Nigeria’s legendary public sector inefficiency?
The concept of concession cannot suddenly lose its essence just because Delta State, notorious for baleful ethnicity-marinated propaganda, is involved. I need hardly emphasise that while the hired rabble of unlettered propagandists and political hirelings unleash their fatuous ignorance on Okowa and his government for doing what is right, some smart, well-heeled and properly educated Nigerians have taken advantage of the inherent benefits of concession to expand the horizon of their investments and businesses around the world.
Take the case of Mr. Adebayo O. Ogunlesi, a Harvard and Oxford-trained old boy of Kings College, Lagos. The lawyer and investment banker currently owns the majority stake in London Gatwick Airport which he acquired in a concession through his firm, Global Infrastructure Partners (GIP). He also has stakes in London City Airport as well as Edinburgh Airport, among others. And he’s a Nigerian. The British community did not call for the head of government officials for ceding ownership of aspects of their airports to a man of Nigerian root. They did not accuse their government of ‘selling’ their airports. So why would some Deltans cry foul over the concession of Asaba Airport, a masterstroke that would take the young airport to the cusp of global competiveness.
For an airport that was in March 2015, shortly before the inauguration of the Okowa government, downgraded to a Category 3 aerodrome by the Nigerian Civil Aviation Authority (NCAA), something has to give. That something started with Okowa having to fully rehabilitate/reconstruct the runway, taxiway and other ancillary works. It completed the perimeter fence, and evacuated the controversial hill adjoining the airport to give it the status of obstacle-free zone for the runway as demanded by the regulatory authority. Based on these, the airport was upgraded to Category 6, which enables aircraft as large as the Boeing 737 to land.
The government also completed the installation of the Instrument Landing System and the Airfield Ground Lighting System. On account of this, the airport can now handle night operations. It has been doing so in the last two months during which it has operated several night flights as approved by the NCAA and the Nigeria Airspace Management Agency (NAMA).
Yet, even this did not make it profitable. It is expected that the emergence of First Investment Development Company (FIDC)-MENZIES Aviation (MA) Consortium as the concessionaire would turn around the fortunes and profile of the strategic airport.
Two heroes have emerged in the evolving story: Dr. Uduaghan, who demonstrated liberal leadership by siting the airport at Asaba against the whining of some elements and for which he’s still being politically persecuted till this day; and Dr. Okowa who has damned the gormless noise and banal beer-parlour argument to concession the airport.
Concession of the airport does not amount to selling. It’s, on the contrary, a ticket to a brighter future for Deltans. And that future has just begun. The concessionaire is to invest not less than N28 billion in the next three years to upgrade the airport and build business units in the form of cargo business and the development of the cargo terminal; development of the logistics hub and cargo warehouses; operation and management of the Tank F; development and management of the Business Park; development and management of the Hotel and Convention Centre, among others.
In a matter of days, the state is expected to receive an agreed N1 billion from the concessionaire. Other benefits include: the concessionaire shall at all times ensure that 20 percent of its staff are indigenes of Delta State. Furthermore, a royalty fee of 2.5% of the annual earnings before interest, taxes, depreciation, and amortization, and an annual fee of N100 million each year during the concession period, with 10% escalation every five years of the concession period. Like in most concession deals, all assets and infrastructure constructed by the concessionaire, together with all related investments, shall be handed back to the state at the end of the concession period. This makes it a win-win for both parties, and not a subject for street gossip in Delta.