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Explainer: How FG intends to concession four major airports across Nigeria

It is no longer news that the federal government plans to concession Nigeria’s four major airports.

These airports include Murtala Muhammed International Airport Lagos (MMIA), Nnamdi Azikiwe International Airport Abuja (NAIA), Mallam Aminu International Airport Kano (MAKIA) and Port Harcourt International Airport (PHIA).

On Tuesday, Hadi Sirika, Minister of Aviation received the Outline Business Case Certificate of Compliance for the concession

The reason for the concession is to develop Nigeria’s major commercial airports and surrounding communities into efficient, profitable, self-sustaining, commercial hubs which will create more jobs and develop local industries through a Public Private Partnership (PPP) arrangement.

In a recent document issued by the Infrastructure Concession Regulatory Commission (ICRC) it disclosed that the Federal Ministry of Aviation (FMOA) will be adopting Public-Private Partnerships (PPP) procurement methodology for expanding and further developing the Nation’s transport sector.

The FGN through the Ministry of Aviation has adopted PPP as the strategy to leverage private sector participation and investment to achieve the upgrade and development of new terminal infrastructure at the four identified airports in a cost-effective and value for money based manner.

In line with the ICRC PPP precontract regulatory role, the Commission has reviewed the OBCs and have deduced that the Outline Business Cases substantially satisfies the requirements of the ICRC (Establishment Etc.) Act, 2005 and National Policy on Public Private Partnership (N4P).

Based on our review/findings, the Commission issued the Federal Ministry of Aviation (FMoA) an Outline Business Case Compliance Certificate for the four International airports (Lagos, Abuja, Port Harcourt & Kano).

The next stages to be followed towards the realization of the project include preparation of an Information Memorandum (Info Memo) and request for Qualification (RFQ) by the Transaction Adviser and placement of RFQ invitation to interested bidders.

Other procedures that must be followed include the issuance of RFP to shortlisted firms, opening of data room and hosting of pre-bid conference, technical proposals evaluation and public financial bid opening and declaration of preferred/reserved bids, negotiation and Preparation of Full Business Case (FBC) and approval of the FBC by the Federal Executive Council (FEC) and contract signing.

The document further disclosed that the airport terminal concession is one of the critical projects under the Aviation Sector Roadmap of the FGN and fits well within the scope of the Ministry’s strategic plan for the sector.

“The execution of this project is meant to help Nigeria to reach its objective in terms of air transport value chain growth by developing and profitably managing customercentric airport facilities for safe, secure and efficient carriage of passengers and goods at world-class standards of quality,” the document stated.

These four main airports have new terminal buildings commissioned and operational while Lagos and Kano have terminals under construction that are due to be commissioned in 2020.

ICRC explains that the Airports in Nigeria have huge potentials but are currently operating at a suboptimal level due to factors that will have to be improved under the PPP programme.

The factors include: the urgent need for infrastructure investments and modernisation (runway maintenance, navigation aids as well as terminal facilities), relatively low asset utilisation due to the limited opening hours of some airports, lack of terminal capacity at the airports due to inadequate gates, stands and check-in desks and deficiency to operate as international hubs resulting in separate international and domestic terminals.

The Outline Business Case (OBC) Report for the OBC for the concession of the Lagos, Abuja, Port Harcourt and Kano airport terminals under PPP arrangements was transmitted to the Commission on 1st June, 2020 for certification.

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