The concession of airports

Concessions are commonly used across the world to ensure that the quality of life of citizens is improved upon by mobilising private capital and know-how to complement public resources and enable new investments in public infrastructure and services without increasing public debt. To this extent, the decision of the government to concession these airports is a welcome development. Indeed, government does not run the busiest airports in the world. The London Gatwick Airport is run by Global Infrastructure Partners, an independent investment fund based in New York, United States with worldwide stakes in infrastructure assets whose chairman and managing partner is a Nigerian. Through concession agreements, Nigeria can remove the heavy burden from running such airports from its annual budgets. This will free funds for other purposes. Certainly, success in this area can create an uptake in concession arrangements in other airports and infrastructure in other sectors. One of the reasons the concession of the airports is considered overdue is that the government has, over time, failed to bring the airports to minimum standards, in spite of the huge expenditure in the refurbishment and remodeling of the airports in the immediate past administration. Simply put, the government has failed in the management of the airports. However, running effective and quality services in the airports typically requires concessionaires to obtain service permits and operating licenses. This means that the government has important roles to play in the process. The benefits of concessions can only be realised when they are properly done. The relationship between the airport and the concessionaire is usually formalised through a legally binding contract. This should be carefully crafted and implemented to avoid controversies and bad faith on the part of all partners and stakeholders to the agreement. In particular, government officials must learn to respect the terms and conditions of agreements entered into on behalf of the government. Furthermore, in carrying out the concession arrangement, we urge the government to place high premium on transparency and accountability. It should let Nigerians know what to expect from the agreement in terms of improvement in service delivery at the airports. This means that the processes should lead to the selection of the best companies with sufficient resources and technical capacity to bring the airports to globally competitive levels. The importance of creating a good governance environment for the current concession arrangement is underscored by previous concession experiences in Nigeria that were dogged by controversies. A case in point is the concession arrangement of the Murtala Muhammed Airport 2 (MMA2) to Bi-Courtney. Although the effort brought the first airport terminal of international standard to Nigeria some years ago, the Bi-Courtney concession agreement encountered serious legal, quality control and management issues. Several stakeholders are involved in airport concessions. These include air travelers, the prospective concessionaires, airlines, and the local community, including passengers, greeters and concessionaire employees. Airports may face competing demands from these stakeholders because they often have their own challenges and concerns related to the airport concession programme. These have to be addressed. One of these challenges has manifested in the protest by labour unions that has followed the current approval to concession four airports. The government must create an environment that would foster a healthy and productive relationship among parties and stakeholders for the benefit of all, as the concession process unfolds. Culled; tribuneonlineng]]>