‘Airport concession will work if backed by rule of law’
Dr. Wale Babalakin (SAN) is the Chairman of Bi-Courtney Aviation Services Limited (BASL), operator of the Murtala Muhammed Airport Terminal Two (MMA2), Lagos. In an interactive session with the media in commemoration of 10th Anniversary celebration of MMA2, he addressed critical issues concerning the first privately-funded terminal in West Africa and the budding plan to concession airports nationwide. WOLE OYEBADE was there. Excerpts:
MMA2 has been through a lot of ups and downs since it opened. What will you describe as achievements of the terminal in the last 10 years?
May 2017 marks the 10th anniversary of MMA2 having begun operations on May 7, 2007. Despite a formidable resistance from certain segments of the authorities, the management and staff of Bi-Courtney Aviation Services Limited have worked diligently to ensure that the terminal remains the envy of all terminals in Nigeria today. They have been providing electricity continuously in an unbroken manner in this terminal for 10 years now.
Our gratitude to the management is further enhanced by the fact that terminals that have more than 20 times our resources have experienced consistent blackouts while with our modest resources, we have provided consistent electricity. Their effort is a demonstration that if we encourage the right persons in Nigeria, the sky would be the limit of our success.
MMA2 has an obvious passenger and airline demand due to its safety, efficiency and technology. Over the years, the terminal has been home to major airlines flying to various destinations in Nigeria. It has handled over 20 million passengers, 400,000 flights and created employment for over 100, 000 people in the past 10 years. The award-winning terminal is also home to retail outlets, shops, restaurants and banks offering a wide range of products. MMA2 is a product of courage and tenacity.
What are the challenges you are still facing today, especially with regards to regional flight operations given that the terminal is not fully utilised?
We got approval to conduct regional flights in 2006/2007. We built a place for regional flights and till date, you will be surprised that we are still not using up to two-thirds of the terminal. About one-third is completely idle and a substantial part of it is for regional flight operations. Two years ago, the Federal Government signed an agreement for us to commence regional flight operations immediately but to our shock, we have not been able to commence. We are told that it is between the Federal Airports Authority of Nigeria (FAAN) and the Nigerian Civil Aviation Authority (NCAA), that they are the ones stopping us.
We are ready, willing and able to commence regional flights. We actually sympathise seriously with the airlines here that use the same planes for local flights and regional flights. When they land at the Domestic runway and their next flight is a regional flight, they have to taxi to International Airport burning fuel that no one compensates them for. So, it is up to you the media to bring this issue out and let the government do what they are supposed to do.
10 years on, one would have thought that dialogue would have resolved the issue of concession agreement between the Federal Government and BASL?
The former President, late Umaru Yar’Adua, presided over the issues concerning the MMA2 concession. All the issues were resolved; minutes of meetings were issued and copied. So, as far as dialogue is concerned, we have done the dialogue and will continue to dialogue. We appeal to the media to tell those who are in charge to do the needful.
You claimed that the government owes you N200 billion debt over breach of agreement on MMA2 concession. Can you throw more light on this?
MMA2 was built on the premise that all domestic flights from Lagos State must come from an airport operated by Bi-Courtney. The agreement was signed. In furtherance and in obedience to this provision, as soon as MMA2 was ready, the government closed down the General Aviation Terminal (GAT) completely. But, one day, we woke up to see that Arik Airlines had begun flying from GAT in deviance to this clear provision of the law.
Our lawyers had anticipated this kind of issue, so the agreement provides that if there is a need to increase the capacity of MMA2 to accommodate domestic traffic, the government hereby guarantees and assures that MMA2 will be the operator.So, they had anticipated that it was possible that somebody would try to break the law. Even if you break that law, the agreement is that all revenues must come to us.
When this Arik thing happened, we complained. We now went into arbitration; this arbitration was set up by the Federal Government. The Attorney-General of the Federation set up an arbitration panel of three members from Bi-Courtney and three members from the Federal Government. The decisions of the arbitration panel were all unanimously in favour of Bi-Courtney.
They stated that one, the concession is for 36 years; two, all revenue from domestic traffic is for Bi-Courtney; three, the GAT in its entirety belongs to Bi-Courtney and four, if there is a deviate person operating from GAT, he should pay directly to Bi-Courtney.
This was a panel set up by the Federal Government. We had no choice than to go to court when this persisted. My first action was dialogue because in 2009, the court ruled that the development going on at GAT is an embarrassment to Nigeria, as it violates every principle of the Nigerian law. Those who felt they could ignore it ignored it. Then, we approached the court presenting a case for damages. After considering all the submissions, the court awarded us N132 billion damages in 2012, which remains unpaid till date.
Furthermore, everybody went on appeal. The Federal Government went on appeal, it was dismissed; Arik went on appeal, it was dismissed; FAAN went on appeal, it was dismissed, the National Union of Air Transport Employees (NUATE) went on appeal, it was equally dismissed; Air Transport Service Senior Staff Association (ATSSAN) went on appeal, it was dismissed. All the appeals were dismissed. Arik hurriedly went to the Supreme Court; the case was dismissed in five minutes because as soon as the judges looked at it, they said this is a total insult on Nigeria and dismissed it.
Since 2012, the same authority has been accumulating interest on this money, which is now N200 billion. Then our lawyers said Asset Management Corporation of Nigeria (AMCON) is a Federal Government agency and they owe me so much, ‘approach the court and tell them to give you the balance’. So, they went to court and the court ruled that whatever debt MMA2 owes AMCON should be set off against the credit it has with the Federal Government. We have a net credit in excess of N100 billion which we have not received but they still continue to say we are indebted to AMCON. Based on Nigerian law, Bi-Courtney owes no dime to AMCON.
Are you making profit?
If the government owes you N132billion and you have to keep the terminal running, pay for electricity all the time, ensure the service providers are paid, among others; it is very difficult to make profit.
Yours is a case of concession gone awry. Would you advise concession of airports as currently planned by the Federal Government?
Let us be frank, the government cannot develop infrastructure. The number of challenges we have makes infrastructure development something we should give to the private sector. We are still at the stage where there are no proper health care. We are still at the stage where power is a challenge, where education is an issue, where so many things require the government’s input. What we need to do is to give the airports to the private sector but the private sector operates better when there is rule of law and where there is pursuit of justice.
For instance, when you bring another airline, give it billions of naira to function; have you not been unfair to Med-View Airlines? Have you not been unfair to Dana Air? Those who have been there from the start? If you give them the support, they will be great airlines that will be the envy of other airlines in the whole of Africa. How can you just wake up today and say because you have the money, you are building a big airline and you will be using government money to compete with innocent people, the way GAT has been competing with us with governmentmoney. We have to labour, sweat and beg; they have the enormous resources.
Let the concession of airports be done in accordance with the rule of law. If this is done, the 22 airports can be turned around completely in less than three years. But if it is going to be done with ‘man knows man’ mentally, we will not develop.
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