The decision by the minister of aviation to look into issues that have hindered the expansion of the general aviation terminal at the local wing of the Lagos airport is part of steps taken to resolve the standoff between the federal government and Bi-Courtney Aviation Services Ltd in the purported concession of the of terminal.
IME AKPAN writes.
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Recently, the minister of aviation, Stella Oduah-Ogiewmonyi, called for details of the suit filed by Bi-Courtney Aviation Services Ltd (BASL) that has hampered the expansion of the general aviation terminal (GAT) at the local wing of the Murtala Muhammed Airport, Lagos.
The details are required ahead of a planned crucial meeting between the Federal Ministry of Aviation, BASL and the Nigerian Air Force to resolve outstanding issues militating against the apron expansion at GAT.
At issue is the defunct Nigeria Airways Ltd (NAL) property partially used by the Nigerian Air Force (NAF) which BASL and Arik Air sandwich.
The dispute over the ownership of the building that has decayed as a result of many years of disuse is coming on the heels of the tussle by the two firms that the property was ceded to as part of the agreement that each of them signed with the federal government.
BASL, which operates the Murtala Muhammed Airport Terminal 2 (popularly called MMA2), hinged its argument on the agreement it had with the Federal Airports Authority of Nigeria (FAAN) on the concession of the new terminal which it claimed extended to GAT.
Arik on the other hand insisted that since the facility was located within the precincts of NAL, which it (Arik) bought from the federal government, it naturally owned the property and needed it to expand its hangar.
While expressing a strong desire to see to a quick resolution of the imbroglio, Oduah-Ogiewmonyi beleives that such a development would pave the way for the commencement of expansion work at the GAT to give the facility the much needed face-lift.
With the action she has taken on the property, the minister has only been told part of the problem.
The bigger one is the ownership of the GAT which BASL lays claim to, courtesy of its concession deal with the government.
The terminal operator has consistently hinged its argument on Article 2.2 of the concession agreement executed on April 23, 2003 (including the addendum executed on February 2, 2007 and the report of the coordinating committee of October 10, 2008).
The contentious paragraph, entitled: “Exclusivity of the Concession Rights,” in the said agreement has the following provisions:
(a) Save as otherwise provided in Articles 17A and 20.2 the concession granted to the concessionaire pursuant to this Agreement is exclusive.
The grantor shall ensure that no part of the concession shall be granted to any other party unless the concessionaire is in breach of any of its obligations under this agreement that would give rise to a right of termination by the grantor under Article 17 or is in breach of Nigerian law in relation to the concession.
(b) The grantor guarantees and assures that it will not build any new domestic terminal in Lagos State and that no existing domestic terminal will be materially improved throughout the concession period that would compete with the concessionaire for the same passenger tariff .
Provided that the concessionaire shall have a right of first refusal in the event that passenger traffic during the concession period necessitates an expansion of the terminal and the first right of consideration if the grantor elects to build a new domestic terminal in Lagos State.
(c) The grantor further guarantees and assures that all scheduled domestic flights in and out of FAAN’s airport in Lagos State shall during the concession period operate from the terminal.
(d) FAAN further assures and guarantees that it shall not during the concession period cause or authorise the erection or development of a shopping mall or any facility (ties) within 200 metres from the perimeter of the site capable of impeding and or threatening the concessionaire revenue generation
(e) In the event that the grantor decides to privatise or otherwise dispose of FAAN or the terminal, the concessionaire shall have the first right of first refusal.
As the controversy continued, FAAN published advertisements in some national dailies in August 2008 for expressions of interest for consultant to bid for designs for expansion and improvement of the GAT as a prelude to open bidding for concession of the terminal.
BASL reportedly instituted a suit against the attorney-general of the federation in March 2009 claiming, among other things, the right to own and manage the operations of the MMA2 and GAT for a period of 36 years with effect from April 2004.
“Any government or nation that cannot live by its agreements and obligations is bound to attract international alienation. Nigerians and friends of Nigeria must join in ensuring that agreements remain sacrosanct and implemented.
“We want to assure the general public that the transfer of management of GAT to Bi-Courtney will not in any way affect the smooth operations of any airlines.
Rather, it will translate into better services, better facilities and better experience in air travelling,” BASL stated.
While the matter was yet to be disposed of, the late president, Umaru Musa Yar’Adua, ordered the formal and immediate hand over of the controversial GAT to BASL in October 2011.
The executive fiat followed the presidency’s rejection of the recommendations submitted to him by his special adviser on aviation, Capt. Shehu Iyal on the vexed concession of the terminal.
To comply with the executive directive the managing director of FAAN, Richard Aisuebeogun, was asked to execute the presidential order immediately.
In compliance with the directive, Aisuebeogun sent a letter to the regional manager of the Murtala Mohammed International Airport, Edward Olarerin, informing him of the development.
In a letter dated October 8, 2009, Olarerin was told: “Consequently, you are directed to hand over the said operations and management of the GAT to BASL with immediate effect, and to give all necessary support and cooperation to the management of BASL during the course of the handover.”
However, the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN), National Unions of Air Transport Employees (NUATE) and National Union of
Pensioners (NUP) criticised the federal government for handing over of the terminal to BASL under a contractual agreement.
They threatened to paralyse the industry should BASL take over the facility. Government was forced to issue a counter directive for the status quo to be maintained.
Arik had also stoked the fire when its counsel, Chief Assam Assam (SAN) contended that the concession contract for the construction and management of MMA2 between the federal government and BASL did not cover the GAT.
Assam, who first came to the limelight when he levelled corruption charges against the former governor of Akwa Ibom State, Victor Attah declared:
“The said directive from the Attorney-General is purportedly premised on the judgment of the Federal High Court in Abuja dated March 3, 2009 wherein Bi-Courtney
Limited as plaintiffs took out a suit against the Attorney-General of the Federation claiming among other things, the right to own and manage the operations of the
MMA2 and GAT for a period of 36 years with effect from April 2004.”
He alleged that both FAAN and the Nigerian Civil aviation Authority (NCAA) knew that the concession agreement did not include the domestic terminal, stressing that it was for that reason that FAAN published an invitation on August 2009 for expressions of interests for consultants to bid for designs for expansion and improvement of the area as a prelude to open bidding for concession for the GAT to deserving bodies.
The lawyer further alleged that in November 2007, his client paid the sum of N160 million for a space in the new terminal, but was yet to be allocated any.
He accused the federal government of trying to “foist on Nigerians, a ruthless, unjust and entirely destructive monopoly such that does not exist in any civilised part of the world under the guise of build, operate and transfer.
We understand the nature of that monopoly. We have been victims of some of this fairer aspects.”
Assam who did not state explicitly whether his client was interested in bidding for the reconstruction of the terminal.
He said that the airline, whose flights take off from the terminal, would not operate from any facility managed by BASL.
“What all of us as citizens of this country want is the rule of law. If GAT is listed for concession, that concession has to go through due process.
Every property of the federal government that has to be given out to a concessionaire either by way of BOT (build, operate and transfer) or by way of direct lease for management by any private individual must be approved by that commission and sent by a memo to the federal executive council for approval,” he stated.
The minister may not achieve much working with the Infrastructure Concession Regulatory Commission (ICRC), which is studying all the concession deals, including MMA2, GAT and the other ones in the aviation industry.
Joe-Kyari Gadzama, a member of ICRC and chairman Board Contract Compliance Committee (BCCC) admitted that in some of the concessions involving what he described as “legacy projects” there were hiccups and challenges because there might have been omissions and certain conditions flouted.
“We want to see how we can remedy the situation and in some cases, probably make the parties to renegotiate some of these contracts, make concessions, give and take, here and there.
“There have been complaints from one party to the other in many of the concessions.
But the most important thing is the ability to sit together, identify the challenges, problems, and the hurdles we need to overcome.
And we have narrowed down the issues; so we are now at the stage of seeing what we can do…enlisting the cooperation of the principal parties in particular to ensure that they shift grounds and probably to advise them not to insist on their rights as contained in some of the complaints so that we can overcome and put the problems behind us,” said Gadzama.
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