Opinion

Asaba Airport Concession: More Question Than Answers By Eugene Onyeabo Aligbe

Given the socio-economic contribution of airports to national development, since air travel was introduced to Nigeria after the First World War when it became necessary to move passengers and cargo across borders, the Nigerian airports have passed through different stages of development. Airports globally are driven by international laws and regulations. Its operating environment is highly technical with huge capital requirements to meet the set standards and achieve the international best practices.

The realization of airports importance and contribution to the nation’s development necessitated the establishment of FAAN by Decree 45 of 1976 to oversee the operations and maintenance of all 22 Federal Government Airports as well as provide some form of services to state government-owned airports in the country. The Act setting up FAAN statutorily empowers it to generate revenue from aeronautical and non-aeronautical services rendered to the airport users. Apart from FAAN, NCAA also was established to regulate all activities at the airports.

Over the years, as the population of airports users grow, the need for more airports in the country also grows. This encouraged the State Governments and private investors to venture into building airports and airlines to provide services to her people as well as profit-making. The Akwa Ibom state is an example (Ibom Air and Uyo Airport).

Airports provide a conducive business environment for safe, secure and economically viable air transportation as well as contribute to overall socio-economic growth. But, providing the modern technology required such as runway, modern terminals, Instrument landing system (ILS), airfield lighting system, advanced security installations and training of personnel to create seamless operations at the airports have remained a bane to the government. These challenges, therefore, increased the quest to restructure the ownership of airports so as to hand over airports to aviation technocrats and business experts.

When Delta State Government openly announced and selected the Transaction Advisory Committee for Asaba Airport Concession to professionally manage the concession process in line with the Aviation roadmap, the country’s Aviation expert scored Dr. Ifeanyi Okowa and his government high. This was so because it is one of the most viable ways of addressing airports and aviation challenges. Public – Partnership/Concession of the airport through the right business model will eliminate government interference, address infrastructure deficit at the airport, increase operational efficiency, generate more revenue through aeronautical and non-aeronautical sources, create new incentives for the airports owners and employees. Concessioning of airports in Nigeria usually follows the Aviation roadmap inline with the Infrastructure Concession and Regulatory Commission  (ICRC) Procurement Acts, 2017.

Asaba Airport Concession: More Question Than Answers By Eugene Onyeabo Aligbe
In concessioning of Airports, other facilities such as Maintenance, Repair and Overhaul (MRO) centre; Cargo and Allied Terminals most times are included or unbundled and concession differently. Delta State Government have been able to put in place some of the needed facilities and measures to attract flights into the airport which helped in raising the passenger’s throughput. As of 2017, the passengers’ movement in Asaba airport was 29, 768 and in 2018, the figure increased to 65, 864 passenger’s movement and will continue to increase. The higher the traffic at the airport, the viability of the aero – a metropolis of the airport. Asaba Airport has great business potentials. The Airport met some of the business requirements for concessionaire since it was resuscitated by Dr Ifeanyi Okowa, the present government.

It is however pertinent to note that the Asaba Airport was built by the former governor of Delta State, Dr Emmanuel Uduaghan. The foundation laying ceremony was done on May 7, 2008, by Chief Vincent Ogbulafor, the then PDP National Chairman. Dr Uduaghan later disclosed that the total contract sum for the construction of the Asaba Airport was N27.7billion, noting that it was the cheapest contract sum ever awarded for the construction of airports by the State Government and was handled by the indigenous contractor, ULO consultants Ltd, owned by late Ogbueshi Uche Okpuno.

On completion of the said cheapest Asaba International Airport by the Government of Dr Emmanuel Uduaghan, the first flight landed at the airport from Abuja on May 24, 2011, operated by Overland Airways.

In 2013, Nigerians realized that Dr Emmanuel Uduaghan was right when he classified the airport as the cheapest airports in Nigeria following the downgrading of Asaba Airport to Category 3 airport by the Nigerian Civil Aviation Authority  (NCAA). The airport was brought to square one as a result of poor work and materials used in constructing the airports by ULO Consultants Ltd. The runway was shut down by NCAA and directed that the airport be upgraded and rehabilitated.

In order to save the state from imminent shame and monumental economic waste, the Government of Dr Ifeanyi Okowa took it upon itself immediately after assumption of office in 2015 to reverse the negative report of the regulatory authority. The rehabilitation work according to the report therefore increased the final contract sum for Asaba Airport to N40billion.

Consequently, Asaba Airport got approved and successfully secured certification from the Nigerian Civil Aviation Authority (NCAA) to operate. Today, Asaba International Airport can comfortably handle big-bodied aircrafts such as B737, B747 and Airbus equipments to the credit of this present government. With the upgrade of the runway and other facilities, Asaba Airport became a class and no longer a cheap airport. Neither is Asaba Airport a dormant or unviable airport in Nigeria. It is a preferred destination for aviation and airport investors and concessionaire.

The proximity of Asaba Airport to major markets and the access road is second to none in Nigeria. It provides a major gateway to Onitsha and Nnewi markets. This alone can generate for the State an enormous return on investment as many had expected when the government announced its interest in hands off the management of the airport to private hands.

On the 23rd of February, 2021, Delta State Government formally signed the Concessions agreement with Asaba Airport Company to manage and run the Asaba International Airport for the next 30 years.

Surprisingly, Governor Ifeanyi Okowa however killed the morale of Deltans when he disclosed that the Concessionaire will pay an annual fee of N100 million only to the state and an initial sum of N1 billion to the state government on or before the close of business on the 15th day following the signing of this agreement. The governor also informed that concessionaire shall only maintain a 20% employment ratio of its staff reserved for deltans for the period of this agreement.

The governor said that with N28b expected to be pumped into the airports by the consortium over the period of the concessions, the state will no doubt benefits in terms of employment generation, urban renewal, economic growth and tourism potentials.

Sadly, the concession of Asaba International Airport that is supposed to be a source of encouragement and motivation to all and quicken the Federal government concession of all FAAN airports in the country is being criticised by many following the poor economic Return On Investment (ROI). The Asaba Airport on many fronts falls below the expectations of many.

The question is, how can it take three years and a whopping N40 billion to build an Airport, only for it to attract (ROI) of N3billion in 30 years? What this means is that it may take Delta State over four century to recoup the N40billion investment. Truly, what kind of political deal is this or is there any other information that the state government was yet to provide in order to justify the payment of a mere N100million annually and additional 5 years of tax holidays to the concessionaire – Asaba Airport Company. What the Delta government did not understand is that airport advertising and branding alone can generate over N500m per year, not to talk of space allocation to business owners inside the Asaba Airport terminal.

Honestly, with what has happened in Asaba International Airport concession, there is no doubt that the school of thought at FAAN campaigning against the government’s airport’s concession will no doubt be laughing at the poor return on investment of Asaba Airport that is supposed to be a model.

Eugene Onyeabo Aligbe

Public Affairs Analyst

ALEDEH News is not liable for opinions expressed in this article, they’re strictly the writer’s

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