The Federal Government of Nigeria has approved the concession of the Nnamdi Azikiwe International Airport, Abuja and the Mallam Aminu Kano International Airport, Kano for 20 and 30 years, respectively.
This is as the Federal Government looks to generate $797.4m (N368.8bn) as concession fees and taxes from the Concessionair, Corporación America Airports.
“Put together it is about $800m. And this is equal to the amount of money that we borrowed to build those four airports,” the Minister of Aviation, Hadi Sirika, told State House Correspondents after this week’s Federal Executive Council meeting presided over by the President, Major General Muhammadu Buhari (retd.), at the Aso Rock Villa.
Sirika said Wednesday’s approval is part of the ministry’s roadmap items to concession the nation’s assets rather than privatising them.
He explained, “It is a concession of the Nnamdi Azikiwe International Airport and Mallam Aminu Kano International Airport. The consortium that won the bid are MSSRS Corporación America Airports consortium and in the consortium, they have MSSRS Mota-Engil Africa and MSSRS Mota-Engil Nigeria and this is through a PPP and it’s for 20 years for Abuja and 30 years for Kano.”
On the amounts payable to the government as fees and taxes, he said “The concession fees or upfront fees is $7m for Abuja and $1.5m to be given for Kano. Fixed concession fee is $401.2m for Abuja and fixed fees for Kano is $21m.
“The variable costs concession fee is $154m for Abuja and $26.9m for Kano. Tax $111.2m for Abuja and $42.7m for Kano. The ICRC’s supervision fees is $16.4m for Abuja and $5.3m for Kano.
“So the total amount of money that is accruing to government is $700m for Abuja and then $97.4m for Kano. Put together, it is about $800m. This is equal to the amount of money that we borrowed to build those four airports.”
Sirika explained that the aforementioned fees are completely separate from the direct fees the Federal Airports Authority of Nigeria will continue to earn from passenger service charge, which is projected to be $4bn (N1.84tn).
The minister claimed that, having ensured the Maintenance, Repair and Organisation of several airports, established the Nigerian aviation leasing company and facilitated several Public-Private Partnerships, the ministry is set to launch the national carrier, Nigeria Air.
Sirika also announced the renaming of the Ministry of Aviation to align with the practices of “future aviation” which now incorporates space exploration.
“So the ministry will be called the Ministry of Aviation and Aerospace of Nigeria,” the Aviation Minister explained, adding that the name change was one of 32 out of 60 memoranda considered at the eight-hour meeting.
He said the change in nomenclature means the office will, henceforth, play a critical role in cementing Nigeria’s place in future space exploration.
“If you look at what is happening in future aviation, as they call them, see what is happening with Elon Musk and Richard Branson. You can go to space now, have lunch and come back. So aviation and aerospace are now together and intertwined.
“It’s important that we become proactive and set our policies to be in tandem with what is obviously coming.
“So the ministry must be positioned in such a way that it is aligning itself with the changes that are in aviation and aerospace. That is why the government established the African Aerospace and Aviation University here in Abuja,” Sirika explained.
The council also approved N2.38bn for the provision of airfield lighting for aircraft night navigation and other associated civil works at Taxiway B at the Murtala Mohammed Airport Lagos, with a proposed completion period of one year.
This was followed by the approval of N1.31bn for the purchase of the Zaria Hotel building to serve as accommodation facility for trainees of the Nigerian College of Aviation Technology, Zaria.
“That hotel will be rehabilitated and used for executive courses and then to house some of the students and trainees in the college.
“In view of the security situation, they are now in house so to speak, because they’re contiguous.
“We only need to remove the fence and the hotel will be within the college and it is bought for the sum of N1.31bn and from a company called Africa Continental Hotels and Resorts Limited,” he explained.
FEC also considered the draft national Civil Aviation Policy which, among other things, favours the concession of national assets, as opposed to privatisation.
The minister explained that the “draft policy is geared towards tending to the vibrancy of civil aviation and its changing nature. It was last reviewed in 2013. So, it took a very long time for this policy to be reviewed.
“However, during our time we waited for the Act to be assented to by Mr. President, so that we can implement some of the components of the policy out of the act.”
“This will continue the policy of concession in all our airports as against privatisation. We will not be privatising our national assets which is a Commonwealth for all of us to continue to remain in the hands of people.”