The Minister of Aviation, Hadi Sirika has said that the planned
concession of four airports will last for a duration of 20 to 30
years.
![image](/2020/10/lawreport.jpg")
![image](/2021/05/lawp.jpg")
Sirika disclosed this in a statement signed by the Director,
Public Affairs, Ministry of Aviation, James Odaudu, titled
Frequently Asked Questions (FAQs).
![image](/2021/05/NBASBL2021.jpg")
In the document, the minister pointed out that infrastructure
concessions of this nature come with a significant financial
obligation which any responsible concessionaire will want to
recoup.
He however said the duration will be subject to negotiations and
the final approval will be given by the Federal Executive
Council.
On why the ministry is still going on with the concession,
Sirika said that the delivery of the project will help Nigeria
achieve its objective in terms of air transport value chain growth
by developing and profitably managing customer-centric airport
facilities for safe, secure and efficient carriage of passengers
and goods at world-class standards.
He said the areas to be concessioned include the non-aeronautic
assets of the airports located in the Passenger and Cargo
terminals.
Sirika pointed out that there shall be no change in the
ownership structure of the airports involved in the programme.
“They are thus comprised of the assets from the entry door of
the airport to the point of embarking a plane, and from deplaning
to the exit doors. This space commonly referred to as the Passenger
terminal is comprised of retail spaces, waiting and seating areas,
airport and airline lounges, baggage collection, check-in counters
as well as administrative offices. The Cargo terminals are
comprised of the facilities between the point of entry and up to
loading and offloading points, including administrative offices
within said facilities.
“What has been mandated by the Federal Executive Council is a
Concession programme. A concession is governed by a concession
agreement whereby two parties – A private sector investor and a
Public sector owner of an asset enter into an agreement that gives
the Private sector investor the right to operate said asset for a
specific business and within the Governments jurisdiction, subject
to certain terms that are agreed upon by both parties during the
negotiation and contracting phase. It is thus a form of
Public-Private Partnership whereby there is no transfer of equity
between the contracting parties.
“We are starting with the most strategic assets because
successful delivery of this concession programme will give all
stakeholders the confidence required to consider other
possibilities in the sector,” he said.
On the ideal concessionaires/partners, the minister said the
government is looking for partners who have the financial,
technical and operational capabilities to manage the assets
profitably and responsibly.
On how the successful bidders would be elected, he explained
that the infrastructure Concession Regulatory Commission (ICRC) –
the institution that oversees all concession and
Public-Private-Partnerships in Nigeria has clearly laid out
processes governing a transaction like this.
He observed that the Transaction Advisors – a coalition of
independent and reputable organisation have been mandated by the
Ministry of Aviation (having received approval from the Bureau of
Public Procurement for their appointment) to drive the process
transparently, ensuring that regulations laid out by the ICRC are
followed whilst also ensuring that Nigeria gets the best partner(s)
and deal possible given the unique attributes of the assets to be
concessioned.
On the issue of inviting foreign firms to participate, Sirika
said the Ministry is looking for partners who have the financial,
technical and operational capabilities to manage the assets
profitably and responsibly.
He added that: “We envisage a competitive process and as such we
will be advertising broadly. All qualified companies or consortiums
shall be allowed to submit proof of relevant qualifications once we
have published a request for qualifications”.
On how the issues related to the MM2 concession might affect the
process, he said: ”These are two entirely independent concession
programmes and as such we are not at liberty to comment or join
issues. We do however hope that all stakeholders appreciate that
the concession programme we are focused on right now operates in an
environment of enhanced Governance with enabling structures and
processes. At the time the MM2 concession programme was initiated
on there was no ICRC. We are now operating in a much more evolved
and mature environment as regards governance related to
infrastructure concession programmes.”
On how much the FG intend to generate through the process, the
minister noted that a typical airport concession transaction might
rely on a deal structure comprised of an investment commitment by
the concessionaire for a minimum duration, an annual concession fee
and a share of net operating income.
The Minister of Aviation, Hadi Sirika has said that the planned
concession of four airports will last for a duration of 20 to 30
years.
Sirika disclosed this in a statement signed by the Director,
Public Affairs, Ministry of Aviation, James Odaudu, titled
Frequently Asked Questions (FAQs).
In the document, the minister pointed out that infrastructure
concessions of this nature come with a significant financial
obligation which any responsible concessionaire will want to
recoup.
He however said the duration will be subject to negotiations and
the final approval will be given by the Federal Executive
Council.
On why the ministry is still going on with the concession,
Sirika said that the delivery of the project will help Nigeria
achieve its objective in terms of air transport value chain growth
by developing and profitably managing customer-centric airport
facilities for safe, secure and efficient carriage of passengers
and goods at world-class standards.
He said the areas to be concessioned include the non-aeronautic
assets of the airports located in the Passenger and Cargo
terminals.
Sirika pointed out that there shall be no change in the
ownership structure of the airports involved in the programme.
“They are thus comprised of the assets from the entry door of
the airport to the point of embarking a plane, and from deplaning
to the exit doors. This space commonly referred to as the Passenger
terminal is comprised of retail spaces, waiting and seating areas,
airport and airline lounges, baggage collection, check-in counters
as well as administrative offices. The Cargo terminals are
comprised of the facilities between the point of entry and up to
loading and offloading points, including administrative offices
within said facilities.
“What has been mandated by the Federal Executive Council is a
Concession programme. A concession is governed by a concession
agreement whereby two parties – A private sector investor and a
Public sector owner of an asset enter into an agreement that gives
the Private sector investor the right to operate said asset for a
specific business and within the Governments jurisdiction, subject
to certain terms that are agreed upon by both parties during the
negotiation and contracting phase. It is thus a form of
Public-Private Partnership whereby there is no transfer of equity
between the contracting parties.
“We are starting with the most strategic assets because
successful delivery of this concession programme will give all
stakeholders the confidence required to consider other
possibilities in the sector,” he said.
On the ideal concessionaires/partners, the minister said the
government is looking for partners who have the financial,
technical and operational capabilities to manage the assets
profitably and responsibly.
On how the successful bidders would be elected, he explained
that the infrastructure Concession Regulatory Commission (ICRC) –
the institution that oversees all concession and
Public-Private-Partnerships in Nigeria has clearly laid out
processes governing a transaction like this.
He observed that the Transaction Advisors – a coalition of
independent and reputable organisation have been mandated by the
Ministry of Aviation (having received approval from the Bureau of
Public Procurement for their appointment) to drive the process
transparently, ensuring that regulations laid out by the ICRC are
followed whilst also ensuring that Nigeria gets the best partner(s)
and deal possible given the unique attributes of the assets to be
concessioned.
On the issue of inviting foreign firms to participate, Sirika
said the Ministry is looking for partners who have the financial,
technical and operational capabilities to manage the assets
profitably and responsibly.
He added that: “We envisage a competitive process and as such we
will be advertising broadly. All qualified companies or consortiums
shall be allowed to submit proof of relevant qualifications once we
have published a request for qualifications”.
On how the issues related to the MM2 concession might affect the
process, he said: ”These are two entirely independent concession
programmes and as such we are not at liberty to comment or join
issues. We do however hope that all stakeholders appreciate that
the concession programme we are focused on right now operates in an
environment of enhanced Governance with enabling structures and
processes. At the time the MM2 concession programme was initiated
on there was no ICRC. We are now operating in a much more evolved
and mature environment as regards governance related to
infrastructure concession programmes.”
On how much the FG intend to generate through the process, the
minister noted that a typical airport concession transaction might
rely on a deal structure comprised of an investment commitment by
the concessionaire for a minimum duration, an annual concession fee
and a share of net operating income.