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Chinelo Obogo, [email protected]
The Federal Airport Authority of Nigeria (FAAN) had for years outsourced some of its revenue points to concessionaires in order to maximise revenue. Its decision for adopting such strategies were informed by the general belief that projects done under Public/Private partnerships arrangements are better managed and would yield higher returns on investment.
But such thinking appears no- longer suitable in the aviation sector as many of the public-private partnership deals have ended up in conflict where the concessionaire more often than not, resort to dragging the airport authority to court over control of the revenue points to ‘recoup their investment.’ The effects of such crises have usually led to underdevelopment and inefficiency of airport infrastructure.
On October 31, 2007, FAAN signed a concession deal with Maevis Nigeria Limited for the acquisition, installation and management of the Airport Operation Management System (AOMS), Flight Information Display System, Common User Self Service System, Airport Pricing and Billing System and Electronic Payment Gateway System at the four international airports in Abuja, Lagos, Kano and Port Harcourt. The company was to fund the contract at the total cost of N3,959, 293, 695.97 and the contract was for a period of 10 years, subject to a renewal term of five years.
Along the line, the then FAAN MD alleged that Maevis had breached some terms of the agreement and on February 24, 2011, FAAN served the company a termination notice with the approval of the Attorney General of the Federation. It then swiftly removed Maevis AOMS which prompted the company to immediately go to court where it obtained a favourable judgment ordering both parties to either maintain the status quo or resolve it through arbitration which FAAN refused to heed.
A similar scenario is currently playing out between the Integrated Intelligent Imaging West Africa (I-Cube), the concessionaire that was in charge of collection of fare at the Lagos airport access gate till January this year and FAAN.
I-Cube has accused FAAN of disobeying court orders and acting illegally after the agency terminated its contract and seized control of the access gate. At a press conference at its office, the legal counsel of I-Cube, Charles Ebhoman, said the company was compelled to address the issue after members of the aviation unions cut off water and light supply within their office premises and allegedly harassed their staff in a bid to force them out. One year after the contract for the control of the access gates expired, FAAN wrote a letter to the management of I-Cube, asking it to vacate the premises but the company took the agency to court, accusing it of breaching the contract which gives it the right of first refusal.
Ebhoman told journalists that despite the fact that the Federal High Court, Ikoyi, gave an injunction on February 19, 2020, that the status quo be maintained, FAAN is yet to comply. “We are compelled to address the issue because of what happened on Thursday, February 20, at the company premises at the toll gate despite the fact the issue of the control of the access gates is currently before the Federal High Court, Ikoyi.
“On February 13, I-Cube got a letter from FAAN stating that they should remove all their properties within the access gate on or before February 14. Upon receipt of that letter, we immediately wrote a letter to the author who is the regional general manager, South West of FAAN. We let her know that they do not have the right to take laws into their hands. We copied the judge who is handling the matter, the commissioner of police, airport command, we copied the counsel to FAAN, the Managing Director and the Director of Legal services and we have the acknowledgement of that letter from all of them.
“On February 18, we brought the attention of the court to the fact that despite the suit, FAAN has chosen to go about the issue as if nothing was happening. The court ordered that the parties should maintain the status quo and on February 19, we served them with the order to notify them of the court’s injunction but despite the existence of the order, we were surprised that the aviation union members came back and vandalise our property. I made an attempt to speak to one of them but I was rebuffed.
“The court stated that the status quo should remain and that means that parties involved in the suit are supposed to maintain the position of things before the matter went to court, which was when I-Cube was the operator of the gate. That is the position of the law when it comes to status quo ‘ante belum’. By this injunction, FAAN is supposed to vacate the gate for I-Cube to continue the management. “Three months to the expiration of the contract, I-Cube wrote to FAAN for renewal and but FAAN didn’t respond. However, from February last year, till December last year, I-Cube continued to pay the concession fee which is N68 million and there are receipts to back it up.
“The reason FAAN gave for the termination is that they want to determine the amount generated by the access gate and not because of performance which was never a term of the contract. When the so-called union took over, the ticket they were giving motorists was FAAN ticket, so where did they get it from. We knew that it was just an attempt by the management of the agency to exonerate themselves of the blame but we knew what happened.
“A company called Rosepine Integrated Limited took FAAN and I-Cube to court to say that they got information that the Lagos and Abuja contract has expired and so they applied to be given the contract and FAAN wrote to them to say the contract has already been given out. As a federal government agency, before awarding any contract, you are meant to advertise and call for public bid. Since FAAN didn’t do that, Rosepine took it to court and we counter sued because in the contract that we signed, before FAAN can advertise, we have a first offer of refusal. We have a better claim that Rosepine and the case was still in court when the unions came and I-Cube away as initiated by FAAN,” Ebhoman said.
What led to the crisis
The public move by the three major aviation unions to get back control of the access gate from the I-Cube, began last year. On October 24, 2019, the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) wrote a letter to the Managing Director of the Federal Airports Authority of Nigeria (FAAN) threatening to resist any attempt by the management of the agency to bring in another concessionaire to control the revenue points at the Lagos and Abuja airports. In the letter, they proposed that rather than hand over the revenue points which includes the access gates of the agency to a private company to manage, FAAN should hand them over to the commercial department for at least three months after which a decision can be reached based on performance in revenue generation.
The Lagos State chairman of ATSSSAN, Ahmed Danjuma told Daily Sun at the time that the commercial department of FAAN has always generated more revenue over the years than any concessionaire and as such, the union should be given the access gates to manage. “We were managing the toll gates but the management then gave it out to a concessionaire in 2004 and the amount they agreed to be giving to FAAN was far less than what we were collecting when we were in charge. In Lagos, what FAAN is collecting from the concessionaire is N68 million monthly. If we were the ones managing it, we would have generated more revenue,” Danjuma said.
Then on Monday, February 3, ATSSSAN, Association of Nigerian Aviation Professionals (ANAP) and the National Union of Air Transport Employees (NUATE), arrived at the access gates and ordered staff of I-Cube to vacate the collection points. The leaders of three unions who spoke to Daily Sun said that the control of the access points by a concessionaire has rendered many staff of the agency redundant and has also caused a depletion of revenue generated by FAAN.
By the afternoon of February 4, FAAN wrote a letter to I-Cube, ordering it to cease collection of toll fares and vacate the access gate with immediate effect.
In a letter dated February 4, 2020 and signed by the managing director of FAAN, Captain Rabiu Yadudu and copied to the Airforce commandant, MMIA, Commissioner of Police, Airport command, Director of State Security Services, all directors of FAAN and all the aviation unions, FAAN said the concessionaire should immediately vacate the access gate as the agency has resolved to temporarily take over.
By the morning of February 5, FAAN had assumed full control of the access gates effectively ending the 11-year relationship between it and the concessionaire. For stakeholders in the industry, it is not enough to take control of the access gates, what plans does the authority have to elevate the place to world class standard considering that it is the gateway into the country.
Experts weigh in
An aviation security expert, Captain John Ojikutu, told Daily Sun that he believes the unions cannot be trusted long term with the huge revenue being generated at the access gates based on past their records. He still believes that a concessionaire should be in charge but that the monthly remittance should be reviewed upwards.
He said: “You can automate it the way Lekki toll gates are and still get duped. The union too cannot be trusted for too long without a drawback to the recent past. From personal research on the toll gates, about 2,000 vehicles pass through them both ways in one hour; within 12/15 hours a day the earnings per month should not be less than N150m/N180million per month. A reasonable contractor should be ready to give FAAN 70 percent of any of these agreed earnings and be satisfied with 30 percent. If there are additional earnings above the agreed earnings, that should be a bonus to the contractor but the contract should be reviewed every three years. Danjuma however assured that FAAN is already taking measures to automate the gates and also give it a facelift. He told Daily Sun that there are plans to give the access gates a face lift and that steps are already being taken to achieve that.
