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FAAN to grapple with $1bn loan after airport concession

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Airport Concession
A view of Nnamadi Azikwe International Airport in Abuja

The Federal Airport Authority of Nigeria (FAAN) would be put at a disadvantage of bearing a $1 billion repayment loan if the Federal Government continues with its airport concession policy, the unions of airport workers said on Tuesday.

The union which includes the National Union of Air Transport Employees, Air Transport Services Senior Staff Association of Nigeria, Association of Nigeria Aviation Professionals and the Nigerian Union of Pensioners, FAAN branch said the economics of the concession did not add up at all.

It was reported earlier that some members of the union noted there were a lot of liabilities and labour issues that had not been addressed by the government.

While addressing journalists in a press conference on Tuesday in Lagos, union executives, which included representatives from NUATE, ATSSSAN, ANAP and NUP-FAAN disclosed that the policy to be adopted by the Federal Government would be unfavourable to them.

The General-Secretary for NUATE, Ocheme Aba, who spoke on behalf of the union said, “While the sharing ratio is proposed to be 60:40 in favour of the concessionaire, the disadvantaged FAAN is made to bear the repayment of the $1 billion loan utilised to build some terminals, continue to pay emoluments of its staff pensioners, return 25 per cent of its Internally Generated Revenue to the government under the Fiscal Responsibility Act, and maintain the remaining 18 airports in Nigeria.”

According to the union, there is no possibility of FAAN meeting even a quarter of the obligations.

Aba noted that the basis of granting the concessionaire the lion share of 60 per cent of the profit remained dense.

He said the model of concession by the government could be surmarised as Take, Operate and Transfer and translated to reaping without sowing.

He noted that FAAN’s unresolved litigation on the airport concession was within the public domain.

Aba said, “No case whatsoever has been established for the concession of any airport terminal in Nigeria in the first place.

“The terminals earmarked for concession are brand new 21st century terminals which have absolutely no need for any significant investment other than maintenance in the next 25 years.”

He said the fact was confirmed by the Outline Business Case (OBC) itself.

“A cursory look through the OBC shows that the promoters are unsure of the concept to adopt between BOT and Rehabilitate, Operate and Transfer. This apparent confusion to us stems from an established fact in these particular terminals that there is neither a thing to build or rehabilitate,” he added.

The workers’ spokesman said if there should arise a need for expansion in the terminals, which according to the unions was not envisaged in another 25 years, then the Green Fields concession option would be applicable.

He added that all airport workers, aviation workers should stand for their rights in lending their voice to say no to the concession model of the airport terminals proposed by the Federal Government.

The federal government has embarked a plan to concede four Nigerian airports to private operators who will run them for at least 20 to 30 years.

According to the Federal Ministry of Aviation, the concessions will affect the Lagos, Abuja, Port Harcourt, and Kano airports.

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