• Wednesday, February 21, 2024
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Investors to resist FG’s suspension of Nigeria Air, others

Industry stakeholders have said the Federal Government will face various forms of resistance from investors and concessionaires over the suspension of Nigeria Air, airport concessions and other projects and contracts.

Festus Keyamo, minister of aviation and aerospace development, said last week that he owed it to the government and Nigerians to give an honest assessment, adding that the projects would be suspended until he briefed the President.

The controversial Nigeria Air, which was launched by Hadi Sirika, the former aviation minister, said the project has an ownership structure of 49 per cent held by Ethiopian Airlines, 46 per cent by Nigerian private investors (SAHCO, MRS and other institutional investors), and five per cent by the federal government.

Sirika also revealed preferred bidders for the airport concession projects.

He announced the Corporacion America Airports consortium as the preferred bidder for the Nnamdi Azikiwe International Airport, Abuja, while the ENL consortium was selected as the reserve bidder for NAIA.

Read also: Keyamo suspends Nigeria Air project, announces MMIA’s closure for repairs.

According to Sirika, the preferred bidder for the Murtala Mohammed International Airport (MMIA), Lagos, is the TAV/NAHCO/Project Plant Limited consortium. In contrast, the Sifax/Changi consortium was selected as the reserve bidder for MMIA.

Corporacion America Airports consortium was also announced as the preferred bidder for the Mallam Aminu Kano International Airport, Kano.

Sirika said the Port Harcourt International Airport did not receive any proposals when the request for proposal deadline closed.

Stakeholders said the investors had committed some money to these projects and would stop at nothing to ensure the federal government reverses the decision to suspend the project.

“The Lagos International Airport was recently concessioned. What message are we sending to the international community? The concessionaire that won the bid through the Infrastructure Concession Regulatory Commission (ICRC) process will not sit down and fold his arms,” a stakeholder who declined to be identified told BusinessDay. “They will go to court and halt any renovations. Surely a senior advocate of Nigeria cannot just come on TV as a minister of aviation to announce the cancellation of a process conducted by the ICRC.”

Sindy Foster, the principal managing partner at Avaero Capital Partners, wondered how the Federal Government, which has only a five per cent stake in Nigeria Air, could suspend the project.

She recalled that the former minister insisted that even if the federal government tried to stall the process, 95 per cent would keep going regardless.

Read also: Airline operators Laud Keyamo over suspension of Nigeria Air project, others.

“More reasons why this structure was wrong in the first place. If this is truly a strategic public-private partnership, the government should have had a controlling interest,” she added.

Foster said that while court order had not stopped the federal government before, this case may just be different.

However, some stakeholders have called for the termination of the projects, saying most of the projects were shrouded in secrecy and lacked transparency.

“None of the airports’ concessions bidding was transparent, and I wish there were a reverse. For the National Carrier, it must be discarded completely. Government should establish two or three flag carriers from credible domestic airlines for the Regional, Continental and Intercontinental Bilateral Air Service Agreements routes,” John Ojikutu, security expert and former military commandant at the Murtala Muhammed International Airport, Lagos, said.

He suggested that the minister should give out the commercial services for concessions.

“We have deliberately jettisoned the plans for concessions, commercialisation and concession because our political office holders must come into office to count their blessings in abundance and institutional corruption,” Ojikutu said.

Read also Explainer: What new minister can do to make Nigeria Air fly

He said these airlines should sell a 40 per cent stake to the Nigerian public, and the government must restrict the foreign airlines to Lagos or Abuja and the two airports.

According to him, except for new interests from the new political dispensation, there is no reason to suspend any project other than a quick review in reverse and giving out what is meant for concessions, privatisation and commercialisation.

Seyi Adewale, an aviation analyst and chief executive officer of Mainstream Cargo Limited, said the minister had no choice but to suspend the projects for revision, validation, or outright cancellation.

“They should have researched and noted the historical records of politically motivated projects. Specifically, many current investors can be likened to ‘gamblers’; they would know you win some and lose some. In this case, they have a ‘bad hand’, and their nation cannot suffer for their greed,” Adewale said.