Those Opposed to Airport Concessions are Enemies of Nigeria
Industry consultant and CEO of Belujane Konsult, Chris Aligbe has said the National Assembly is contributing to the retardation of the aviation industry and called for the transparent concession of airport facilities. He spoke to Chinedu Eze. Excerpts:
Before the Senate backed down on Tuesday, the members opposed the planned closure of the Abuja airport for comprehensive work on the runway. Do you thing the Senators were not well informed?
The legislators should blame themselves. It is about two or three years ago they talked about starting a second runway they vehemently opposed it on the grounds that the cost was too high for such a project. I remembered that Senator Dino Malaye, as member of House of Representatives then, was one of those who shouted highest. He was one of those who shouted about it and talked and they started making comparisons with Akwa Ibom airport runway. But it is good to raise questions but you don’t stop at raising questions, how do you address the questions you have raised? They threw away the baby with the bath water.
They did not think about it after they have done that, made all the noise and pandered to public opinion. They gave the impression that people want to collect money and put in their pockets, that is what happened. But they did not say let us have a proper costing of what has to be done because it is very, very necessary that we have a second run way at the Abuja airport. The legislators went to sleep, everybody went to sleep after that shouting and nobody wanted to go back to take a look at the cost, or say this is the cost, this is what it is going to be. So that is where we are and today they are still shouting. I see Prince presenting a paper that they can be operating while they do it in parts the way they do in other places. Has he ever seen it done in other places? Does he know what is put in to do that? It is a lesson we should learn, it should teach us.
Now when we see issues, when we look at those things what we should do is that after raising questions, we should not stop at raising questions, we take the appropriate decision that is what they missed. That is what is dawning on all of us here; nobody can continue to operate in that airport without an accident coming. The airport unfortunately should be closed and then proper maintenance done. And immediately after that what they should be looking at in the next year budget is that there should be the issue of a second runway in Abuja should come in place. That is the truth.
Don’t you think they should have prepared Minna as alternate airport to Abuja, considering its proximity?
You see proximity, yes, and then more importantly Minna was built as an alternate to Abuja but since Minna was built as an alternate to Abuja what has been happening in Minna airport? How many flights have been going into Minna, even domestic operation? They have not been going into Minna, there is no traffic or there is effort to encourage traffic, unfortunately the last governor of Niger State made so much noise, spoke so much English about airport city and all those things but he did next to nothing; he left the place and didn’t do anything despite all the noise he made, unfortunately.
It pains because that man is highly educated, he went to some of the excellent schools and if you heard him you know he is somebody who was looking ahead, that is what all us of thought. And when he was talking about turning Minna into an airport city and something formidable, we believed that he could, but after saying that he didn’t do it. Today nothing is going on at Minna airport. Other airports are by far better; Yola airport takes more traffic, Kaduna is sitting at a point where it will attract more traffic, it has flights daily, Minna airport has no flight.
So putting Minna in place as alternative to Abuja will be a lot of job from the scratch. But the critical question is, after that what will happen to that airport? So there are so many things that come into consideration, yes Minna was built as an alternate but nothing has happened in that airport. Neither the state government nor the federal government did anything to make sure that that airport is functional. And that is why people will talk about it. People will say look leave Minna where it is. It is interesting and disheartening that they are closing this airport and we are looking at where flights will go to.
That is what I talked about when Port Harcourt airport was closed. Owerri airport was used as alternative but nobody thought about expanding Owerri, developing it to handle that traffic. What is being done about Kaduna airport is the right thing to do, make no mistakes about that. They have to put it in place; they have to expand the facilities because flights have to go there. But after that you will see that Kaduna will blow up in terms of traffic because the facilities will become very good.
You could have 24 hours flight; it will no longer be day light flights. But there is no alternative to closing Abuja runway. I have always blamed the legislators in many things because the legislator can push this country to the point where it should be by being proactive. The legislator by now, with all the committees and also the Senate committee on aviation and House committee on aviation should have consultants in various areas. Maybe you don’t engage one consultant, you have the ones who you can call to do a study in various areas and they create a situation where proactive. It becomes a push factor in the entire system that you push the executive to do what it should do. That is the major function of oversight. It is not just lay blames but being proactive. The next budget they are the same people who will cut off everything you need to improve the airports.
Government and aviation agencies don’t seem to realise the critical need to have airfield lighting at airports; yet, everyday lack of such facilities lead to flight cancellations and disruptions?
If the Senate committee or the various National Assembly committees have consultants on airports, during the budget presentation they call the consultants to find out areas that need improvement. And then they have information, when budgets are submitted, during budget defense; you ask the Minister, the CEOs about the critical things they ought to have at the airports? They may request that at least the four major airports should be on 24 hours operation. After that the next four will follow, and so on.
The legislators will say, go and give us what it takes and let us have it in the budget. And they go, you send them back and they go and prepare it. You bring your consultant; he will look at the costing and tell you the right thing to do. The consultant will give you a list; will direct you in terms of costing and everything and he will give you the technical knowledge that you require. This is what is lacking but they want to sit down there and carry on oversight or budget function without any fundamental knowledge of what they are addressing.
The legislators should be able to say sorry, this is of a priority for our country. You can borrow money to fund critical airport infrastructure. African Development Bank (ADB) funds airport development, ADB doesn’t fund airlines, it doesn’t give loans it has no facilities for airlines. But it has for infrastructure, airport infrastructure, technical operation and all those things. FAAN cannot on its own access the loan, the federal government and the Ministry if Finance has to come in. The Ministry of Aviation along with Federal Ministry of Finance can facilitate such loans.
The Minister of State, Aviation, Senator HadiSirika said the workforce is over blotted in the agencies and that much more money is spent on overhead, but without such expenses, do you think the Federal Airports Authority of Nigeria (FAAN) can fund the provision of airfield lighting at airports?
Let me tell you, government wants to eat its cake and still have the cake. It is very difficult, for the simple fact that, they are pushing these agencies including FAAN to increase the Internally generated Revenue (IGR) base, they are pushing them to contribute more to the national coffers. So FAAN is doing all sorts of things to do that, so the more they get the money it goes into national coffers. They are not thinking of FAAN getting this money and deploying it for the development of the airports.
So FAAN does what it does and whatever it gets it has to pay salaries, it is not get subvention and whatever remains goes to government coffers. That is why some of the things FAAN is doing today are making our airports the most unfriendly airports. That is why they charge exorbitant rates for car park tolls. You make it unfriendly through high charges but you lose money because if FAAN was to automate that system based on the length of stay, that is what is done globally, FAAN will make more money than it is making now. When you automate those who park their cars for a longer time pay more.
I know people who park their cars there for almost 18 hours a day and pay the same fixed toll. So there must be a paradigm shift, there must be a mind shift. So what government is doing, is that they are pushing FAAN too hard to increase its contribution to the distributable pull while it is expecting FAAN also to continue running the airports the way it should be run. That cannot happen. I am advancing for the immediate, medium and long-term solution to the problems of airport infrastructure.
That solution is that all the airports should be concessioned. There should not be any more delays in concessioning the airports. To delay concessioning the airports is to bring this country down. The legislators have started again, they say we are opposed to concessioning, you are opposed to concessioning, you don’t look at the budget that you are approving every year. Where will the money come from if you want to have a modern airport? It cannot come from anywhere, it is the concessionaire that will bring money, develop the airports and provide modern facilities at these airports.
There are people who are opposed to concession because of the way the Minister is allegedly going about it. Many people believe that he is trying to circumvent the procedures and that if he does that after the agreement has been signed another problem will come up as witnessed in the past?
Those who oppose concession are enemies of the country. Anybody who believes, who thinks that the airport should not be concessioned, that it should be left in the hands of FAAN to run it as a government agency, that person is an enemy of Nigeria. I say this with utmost sense of patriotism, because you know you cannot get any efficient airport, you cannot get any global standard airport if it is left to be run the way it is being run.
Some people in FAAN will say, yes leave it for us to run, many of them are my friends but I have said to them man to man, their IQ is high but the fact of the matter is that they have not been exposed to modern airport management, they have not seen it, they have not been trained, they don’t know what they will gain when the airport is working on well, they are working with residual and decadence knowledge that cannot bring the airport to modernity, that is the truth of it. We need to call those who know, there is shame in saying I don’t know this and because I don’t know this let me look for those who know.
So I think that people are just running away from reality, the reality is that this country will never ever have a modern standard airport if airports are left to be run the way they are being run today. So those who are opposed to concessioning are enemies of the country. I will say this any day and I will defend it. I know the challenge FAAN workers are facing, that challenge is what happened in the past. Even at the Senate somebody was taking about the challenges with the past concession efforts. Why did that happen?
They were not sitting on any legal framework, there were no laws, it was done at the whims and caprices of those who had ulterior motives, who had their personal motives. That was what happened. The first thing to do is to say no airport should be allowed to be concessioned without legislative Act. People say we now have infrastructure concession Act, look, that is not targeted at aviation, it is a general Act, but there must specific Acts for concession of the airports.
Concession airports is different from concessioning roads or the refineries. So sector specific Act must be put in place to be able to achieve what we want to achieve. Well, people thinking that the minister is trying to circumvent this one, I don’t know about that because that James’ wife yesterday lost her pregnancy, you say Audu’s wife if she gets pregnant tomorrow she is likely going to experience abortion, it doesn’t follow.
Maybe James’ wife did not do proper medical treatment and she experienced stillbirth or abortion. All that you need to do is to make sure that Audu’s wife will go through pre-natal, antenatal and post natal and see that she gets to the point of safe delivery. What we need to do is to put laws in place immediately. The National Assembly has a major responsibility to say; yes the airports have to be concession. Then after the arguments let us put the appropriate laws in place. Because the person who is coming to take the concession, the first thing he will ask for is the framework. He must look at the framework, sit down and analyse it.
It is the framework that will protect his investment. It is the framework that will guarantee return on his investment. And with what happened with Bi-Courtney concession of the Lagos Airport domestic terminal (MMA2), it reverberates throughout the whole world. They said if you treated your people like this how would you treat us? It happens sometimes. Ethiopian Airlines wanted to set up airline in Nigeria but Ethiopian airline stopped because they are worried with what happened to Virgin Nigeria. But none of them knows the actual thing that happened, that Virgin Nigeria was setup without frameworks they were sitting in framework voids. And so the first thing to do is to make sure that there are no framework voids, appropriate frameworks should be put in place and then it is the framework that will determine precisely how you will go on the concession.
Do you think that government will look at the ability of the proposed concessionaire to know whether he could effectively deliver beyond bringing the highest bidding?
You see the fact of the matter is that we have no experience in concessioning particularly airports. If you look at the concessioning that was done in the seaports, they were not properly done. There was no framework when that was done, the concessionaires have gone into a cartel, they determine the price and they are bigger than NPA in terms of their influence. NPA can’t bring them under control, there not yet a strong economic regulator, but they push government, use Customs to go and push them and say prohibit this import, vehicle should not come from land borders and whatever.
That in that way they are taking business away from the ports. But the charges are outrageous; the cost of clearing an item in Lagos is four times the cost of clearing that item in Cotonue. And it is the same duty whether you go through the road or you go through the port, it is the same Customs duty. So it is the ports and the terminals that are losing money and eventually the policy will fail.
Although the legislators are saying Customs should suspend it. But the fact of the matter is that Customs should intensify collecting duties but they should not prohibit importation. Instead government should increase the charges for illegal items through the border. Some Customs would make good person al deals from the policy. Government will still lose; the country will still lose when they engage in such things.
But I tell you; the truth is that the policy will not last long. We are discussing ECOWAS common market, ECOWAS common currency and common market means there are no borders. The truth is that it will impede any further discussion on the common market because Nigeria will benefit more from ECOWAS common market. But when that comes into place it will now force the terminal operators to review their charges and bring it in tandem with the charges of the West Coast because there are no rules and there are no restrictions, it will become open skies. So that is what will happen.
What will be the role of government in a concession of airport?
There are rules particularly because airports are monopolies. If you concession Abuja airport to company A that becomes a monopoly. There are no other airports in Abuja and flights must come in there. This is why you need to put a very strong economic regulator. I heard there are plans to merge economic regulator department and consumer protection department together into a single unit in the Nigerian Civil Aviation Authority (NCAA).
This is a wrong decision. The challenge of economic regulation, the challenge of consumer protection will triple once we concession the airports. This is because you need to bring them into check, as they are now monopolies. So they need to strengthen those departments and opening them to courses on how to regulate airports in terms of economic regulation. I am not talking about operational regulation, NCAA is the technical side but where it affects the consumers, where it affects businesses the airport must come under control.
Those are the thing you don’t border controlling like cost of advertising at the airports, the one you border controlling is the ones that affect operation charges to passengers. Because whatever you charge the airlines they will push it to the passengers and when you are a monopoly the airlines have no choice but to come in there. GAT has provided succour to many airlines; that is why airline will not easily go into MMA2 because the charges are something else.
You price yourself out of the market, it is a clear example of what will happen when there is total monopoly and there is nobody controlling the cost. Normally what happens is that you will put in place apart from the consumer protection directorate of NCAA or anywhere or whether you are creating a new regulator, but the economic regulator and the consumer protection directorate must now become adept in doing what they should do. Their knowledge should become high profile knowledge and they should become ultra active and sensitive in their job where there is concessioning.
In fact today, if FAAN were not a government organization, NCAA should not allow FAAN set the prices for car park at what they have set it. They should stop them because it has made the airport very unfriendly. FAAN needs to make the money but it is not through that way. And they can make more money by doing it on the length of time you stay rather than on the size of the vehicle.
If we continue to have fuel scarcity in 2017 and the difficulty in accessing foreign exchange what do you think will happen to the airlines?
The airlines will do either of two things: One, they could pass the cost to the passengers or the consumer but it is a double-edged sword. This is because the higher the airfare the lower the number of patronage. And you never get to win as an airline because you have lost patronage. The fare is high and you are probably not making as much when the fare was lower. They either do that, although some of them will find it very extremely difficult to operate and they will begin to close shop.
So government needs to sit down to discuss all the issues as they impact on the airlines. Let me tell you, airlines in other countries operate flights for 18 hours, some even almost 20 hours but at least 18 hours. Airlines can fly from 6 am to 12 midnight, domestic operation; I am not talking about foreign airlines. There are security challenges but there are many places where there are no security perils. Abuja today is fairly okay in terms of security, even if you want to strengthen the security in order to make sure that people travel without fear of anything, you just have to do that.
The more an aircraft is in the air the more money it makes. Aircraft are not meant to stay on the ground. But many of them fly fewer hours because of the nature of our airports; they are only day light operation. They don’t operate more than 6 pm; some of them now don’t even start going there by 6 am. So the airlines are suffering and losing money, as they are not allowed to operate fully because of the facilities.
Secondly, on aviation fuel, there is no reason why we cannot have aviation fuel in this country. The Nigerian National Petroleum Corporation (NNPC) should be asked how many oil marketers are allowed to import aviation fuel? I think it is only the major oil marketers. So why is it not possible to have other independent marketers to import aviation fuel? These are the things to be asked, these are the issues to be discussed. And like I have said to you the airlines have so many problems, leave the internal problems of the airlines, some of the internal problems even arise from these external problems.
Conveyor belt is not working well, people come and they are waiting for long before their luggage comes out. Even going to load baggage to the aircraft is all manual process. So it takes a long time, instead of an aircraft being on the ground for one hour it now spends extra 30 minutes or additional one hour. The lateness begins to increase; once it happens once it continues. So things are not going the way they should go in terms of infrastructure, in terms of helping the airlines. The airlines have their own challenges but let us address the external challenges that are killing the airlines.
People are talking about too many staff, yes I saw that in Nigeria Airways, they took that as an index and they started reducing staff from 12,000 to 8,000, from 8,000 to 6,000 and from 6,000 to 4,000. They acted only on that factor the other factor about the number of aircraft; the age of aircraft they did not address them. That is what is happening today. So after reducing the staff those left were not in commensurate with other factors of production like the number of aircraft. So the airline still collapsed. In the question to reduce the workforce they lost many experienced staff, the airline lost captains and pilots who were very experienced, they went to other established airlines. So the fact of the matter is that when you pick up one index out of so many indices it affects financial health of an organisation you will still get to the point of diminishing financial ill health.
Until you take a global perspective of everything, a total overview of what is happening and say what is the optimum of this size, what is the optimum at this point in time? So, our one dimensional analysis in a complex business like airline, airport and aviation will not help. Aviation whether at the airport level or at the airline level is multi dimensional and if you want to do anything in terms of trying to resolve situations, your approach to resolving issues must be multi dimensional, you must look at all the dimensions. But this idea of we must reduce staff is a one line approach.
Is there nothing that could be done to stop Harmattan haze from impeding flight operations during December and January? What do you expect the Nigerian Airspace Management Agency (NAMA) to do this time?
What I expect NAMA to do is to bring up a budget proposal to make at least two or three airports zero visibility landing. Let them take the international airports and say, these international airports within this year and next year there will be zero visibility landing. And put the budget before the National Assembly from the executive to the national assembly and say this is what we need, it is for our country to get to the point where we want to get, for is not to have the challenge of the Harmattan so that our flights can land.
Even if they say it is only 100 meters visibility but now that you put the visibility at 800 meters it doesn’t make any meaning. We can go down to 100, we should decide that our international airport no matter what happens all of them should have zero visibility landing. It is something that the legislators should ask them because it is a budgetary matter. If you don’t provide funds for it you cannot have it done. They could say in 2017 or 2018 we want Abuja and Lagos to be zero visibility landing.
By 2018 Kano and Port Harcourt and Enugu we want zero visibility landing. This should not be taken all at a go; it should be taken little by little. If in four years we make two airports zero visibility landing in four years we will have eight airports. And it will cover round the whole country so that if you cannot land here you go to the airport that is quite proximate to your landing. And if the roads are better and there are train services you know you can move to your destination by train or by road. This is what a forward looking and dynamic legislature should be looking at, they should be proactive, they should not be reactive.
And that is what oversight should be after going; around and then you now decide if they have a consultant to advice them. We are not saying employ consultants all around, no, have a directory of consultants with specific knowledge in certain areas, if it is airport or aerodromes, if it is runway, terminal operation, consumer protection or economic regulation, Bilateral Air Service Agreement have them. When you have issues on any area you call up that consultant. And say look give us your idea even if it is at the beginning of the year, you ask each and every one of them to give you a template for the year and they give you a template for the year. So you have something that you will confront the executive arm with and ask that certain things be done in the country. That is what should be done.