Aviation

Ministry of Aviation Counters Aviation Unions Position on Concessioning_Ada Nkong

The Ministry of Aviation has countered Aviation unions position on concessioning Nigeria’s airport
A statement by James Odaudu,Director Public communication says some of the information contained in a statement by the unions as published on June 30th is misleading.
See full text of the Ministry’s position.
RE: AIRPORT CONCESSION IS A CRIME AGAINST NIGERIAN PEOPLE: IT MUST BE RESISTED FRONTALLY

The Federal Ministry of Aviation greatly appreciates the important role organised labour plays in the development of the sector and as such is compelled to respond to what appears to be an intentionally misleading press statement issued by some members of The National Union of Air Transport Employees (NUATE), The Air Transport Services Senior Staff Association (ATSSSAN), The Association of Nigeria Aviation Professionals (ANAP) and The Nigeria Union of Pensioners (NUP), published by various media on Tuesday June 30, 2020.

The Ministry requests those individuals and special interest groups associated with the above-mentioned press statement to urgently familiarise themselves with the workings of the Infrastructure Concession Regulatory Commission (ICRC Establishment Act 2005). The Federal Ministry of Aviation does not approve infrastructure concession programmes as this role is independently played by ICRC. The ICRC is Nigeria’s regulatory agency responsible for regulating all infrastructure concessions and Public-Private-Partnerships in the Federal Republic of Nigeria. Its processes and procedures are in the public domain and accessible to all. ICRC’s website (www.icrc.gov.ng) maintains detailed information on the workings of the Commission as well as documentation concerning current and past projects. We encourage all members of the above-mentioned associations to seek this information out themselves or ask their leaders to familiarise themselves with said, publicly available information, as soon as possible so as to avoid being misled by any individual or group of individuals associating with their respective associations.

We would also like to address some of the misleading content put out by these individuals and special interest groups claiming to be acting on behalf of all members of much respected aviation sector associations – specifically the assets included in the concession programme in question. ICRC has approved and issued an Outline Business Case (OBC) Compliance Certificate for the further development of a concession programme or Public-Private-Partnership focused on the passenger and cargo terminals in four (4) airports only. These airports are Murtala Mohammed International Airport – Lagos, Nnamdi Azikiwe Airport – Abuja (International & Domestic), Port Harcourt Airport (International & Domestic) and Mallam Aminu Kano Airport (International & Domestic. We expect those involved in the press statement to be familiar with what assets are included in ‘passenger and cargo terminals’ so as to stop misleading other members, the media and the general public. These assets do not include airside assets such as runways, navigational infrastructure or ground handling. Furthermore – we enjoin all interested parties to refer to ICRC’s website if they wish to sight the OBC Compliance certificates and associated documentation.

On the issue of procedural due diligence – it is entirely false and malicious to claim that the Ministry has in anyway single-handedly driven this process. Aside from conceptualising this as a high-level opportunity in the very first instance, which itself was a response to the Governments Economic Recovery and Growth Plan (ERGP) as well as the aviation sector roadmap, which envisages a competitive aviation sector that contributes to Nigeria’s socio-economic development – the Ministry has from the very start worked in partnership with all relevant stakeholders within and outside of government, with the oversight of the ICRC and Bureau of Public Procurement (BPP). This concession programme’s Project Delivery Team (PDT), is the only PDT in the entire Nigerian Concession and Public-Private-Partnership (PPP) space comprised of key representatives of organised labour. This novel PDT structure championed by the Honourable Minister was specifically designed to ensure transparency, participation and accountability through-out the process.
Furthermore, those familiar with international best practice will appreciate that programmes of this size and importance require a heightened level of due diligence and project scoping which takes all possible considerations into account – social, financial/economic, legal and strategic. To this effect, ICRC’s rigorous process requires all initiators of concession programmes to procure independent Transaction Advisors (TA) to provide expert advice on the viability of the proposed transactions, which is used to inform the development of an Outline Business Case for review by ICRC. The procurement of these Transaction Advisors is regulated by the Bureau of Public Procurement and guided by the Public Procurement Act 2007. This process led to the appointment of a team of reputable, internationally recognised advisors that include Infrata, Denton, Proserve and Templars. The certification of the OBC by the ICRC means that the transaction is thus viable and has taken a myriad of factors as outlined above into consideration. This OBC Certificate, with all supporting documents, will then go to the Project Steering Committee (PSC) before the process moves into the public procurement phase which will involve a Request for Expressions of Interest (EOI) and Qualifications (RFQ) and then a Request for Proposal (RFP). Throughout this process all key stakeholders will remain engaged by the Ministry and the relevant agencies under it.

The misleading press statement put out by some individuals and special interest groups purporting to be acting on behalf of the various associations wrongly ascribes approval powers to the PDT. This is inaccurate and intentionally misleading. The PDT does not have any approval powers or responsibilities. The PDT’s function is as an advisory and implementation support group. The PDT thus made significant and meaningful contributions to the process throughout the development of concession programme that led to the development of an outline business case for submission to ICRC, under the guidance of the Project Steering Committee led by the Honourable Minister. The processes, various functional units involved, which also includes the Ministry’s Public-Private-Partnerships unit, and their respective roles and responsibilities, is clearly articulated in ICRC’s guidelines. Further information on this matter may be accessed via ICRC’s website. Once again it is important to remember that ICRC is a body statutorily empowered by an act of law to regulate all infrastructure concession and PPP programmes and that the roles and responsibilities of functional units the ICRC states should be involved in such programmes is governed by ICRC’s own Terms of Reference regarding these functional units such as the Project Delivery Team (PDT), Project Steering Committee (PSC) and PPP unit. A copy of the Terms of reference may be accessed using this link:
https://drive.google.com/file/d/0BzaBhwB6XxLWNjNqeE9WZzBiemc/view.

Furthermore, we expect that such vocal actors claiming to be acting on behalf of the entire ecosystem would at least familiarise themselves with the definition of Concessions and Public-Private-Partnerships. Concessions and Public-Private-Partnerships programmes patently differ from Privatisation programmes. In a Concession or PPP the assets remain the property of the Government and so are subject to the regulations and processes outlined above in brief. Privatisation programmes – which is not at all what this programme is, are driven by the Bureau of Public Enterprises (BPE) and involve a full or partial sale of equity in the asset, thus a transfer of ownership, to private parties. A review of all the transactions and examples given in the statement as having failed or experiencing difficulties were legacy transactions that were undertaken before the coming of the ICRC, when the country did not have a legal and regulatory framework for Public Private Partnerships (PPP).

This phase of our aviation sector concessions programme has the most noble of goals, aligned with our nations aspirations to strengthen its economy, create jobs, foster competitiveness and become an attractive investment destination. It has no intention to marginalise any group of stakeholders or any other asset in the aviation sector. It aims to improve efficiency and revenue generation capacity of FAAN and ultimately improve the customer experience, bringing it up to a level all airport incumbents in international markets have become accustomed to.

Our airports lag behind many other airports internationally and indeed even in Africa and this programme aims to address these issues once and for all. It is thus gratifying that the press release accepts that the current system is not operating at an optimal level. We also welcome any well-meaning and practical debate regarding alternative approaches because such debates enhance the transparency of the programme we envisage. We do however reiterate that the option of concession – an outcome of several months of rigour involving world-class independent advisors and close stakeholder consultations is the most viable option given the realities and complexities the sector and indeed our socio-economic context confronts us with.

Once again – Ministry of Aviation and the Honourable Minister appreciates the important place of labour as a critical stakeholder in the airport concession process and has proposed a series of dedicated engagements with the relevant bodies, as previously done a number of times, aimed at addressing their questions and concerns. We very much look forward to further constructive and forward-looking engagements with organised labour.

James Odaudu
Director, Public Affairs, Ministry of Aviation

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