Resolving the FAAN, Bi-Courtney Imbroglio

On Monday the Infrastructure Concession Regulatory Commission met with the Federal Airports Authority of Nigeria and Bi-Courtney Aviation Services Limited with a view to resolving the protracted disagreement over the concession of the domestic terminal of

There is hope in the horizon that the over a decade disagreement between the host and landlord- the Federal Airports Authority of Nigeria (FAAN) and its tenant and concessionaire, Bi-Courtney Aviation Services Limited (BASL) would be resolved soon by the Infrastructure Concession Regulatory Commission (ICRC). This is coming after more than 10 years of legal battle and the same period of acrimony and belligerent outburst, exacerbated by media wars and occasional fisticuffs.

But surprisingly, on Monday when the representatives of the two organisations met at the conference hall of the domestic terminal of the Murtala Muhammed International Airport (MMIA), Lagos, known as MMA2, a facility built by BASL, there seemed to be a disappearance of the old and well-known hostilities. The two groups seemed to have carved the façade of two cantankerous children allowed to exhaust a fight, tired and vanquished motioned to be separated. ICRC as an arbiter seemed to have stepped in at the right time.

The leadership of ICRC led by its acting Director-General, Chidi Izuwah met with top officials of BASL and FAAN to chart a way to resolve the intractable problem, which officials of the concessionaire and the agency agree was long overdue for resolution. The crux of the disagreement was the terms, duration and content of the concession of the terminal, the hotel being built by BASL opposite the terminal and the conference located adjacent the terminal.

The terminal, which took off in 2007 was given out in concession by FAAN, as representative of the federal government on Build, Operate and Transfer (BOT) basis, but while BASL insists that the concession agreement was for 36 years and that the General Aviation Terminal (GAT) belongs to the company in cognisance of the agreement, FAAN insists that it did not endorse 36 years for the concession but 12 years and that GAT was not part of the agreement.

Addressing the representatives of the two companies, Izuwah said the objective of ICRC was to amicably resolve the problem and put an end to the crisis that has bedeviled that concession for years, so as to encourage the private sector to continue to invest in public infrastructure development in the country.

Izuwah said he was aware of the pains both FAAN and BASL were going through by the current disagreement so ICRC is seeking for solution that would be beneficial to both the agency and the concessionaire.

“The Commission is therefore here today as the regulatory body saddled with the responsibility of monitoring and ensuring the efficient execution of all Private, Public Partnership (PPP) projects entered into by MDAs (Ministry, Department and Agencies) on behalf of the federal government as spelt out under section 20 (a) of the ICRC establishment Act, 2005,” Izuwa said.

The acting Director-General noted that the MMA2 and the hotel and the conference centre that were also given out to BASL in concession by FAAN were projects that were particularly dear to ICRC.

“The projects no doubt have had their fair share of the challenges, which the Commission is not unaware of. We want to assure you that the Commission is equally concerned about the difficulties these projects have experienced even as a model greenfield aviation PPP terminal in Nigeria,” Izuwah said.

The concession of MMA2 was endorsed in 2003 between FAAN and Bi-Courtney, while that of the hotel and conference centre was done in 2005 for duration of 40 years. The initial concession of the airport terminal was billed to last for 12 years, but according to Bi-Courtney, after renegotiation and inclusion of facilities, the duration of the concession was extended to 36. This is where FAAN disagrees with BASL.

The Chairman of BASL, Dr. Wale Babalakin in a welcome speech told ICRC about what his company has gone though, seeking that the concession agreement, which allegedly was repudiated by FAAN, be respected. He told of how the GAT, which ought to be part of the concession, was taken away.

He said that one of the misconceptions about the concession is that BASL drafted the agreement between it and FAAN and stressed that it was not true, disclosing that it was drafted by Prof Akonde who was appointed by FAAN and the Ministry of Aviation.

He also said another misconception was that the concession was given to BASL without due process and described it as false, adding that BASL did not win the concession. Standerton Venture won the concession and BASL only inherited the concession as a reserved bidder and based on this fact, BASL could not have been handpicked as alleged.

Babalakin said that a minister allowed Arik to operate at GAT and when his company protested and there was no positive response BASL went to court and the court ruled in its favour.

“Since then GAT has been operating unlawfully, all the revenue generated from GAT belong to BASL and we are going to insist on the payment to us in arrears. At one of the sessions in National Assembly, one of FAAN’s advisers said FAAN has appealed to the court, I am not aware of it and even if there was an appeal, it does not affect the judgment of the court or stay of proceedings and if there is stay of proceedings I would like to see a copy but if there is none, any such statement is an invalid statement of law.

“So we ask ICRC to study the document and effect a handover of the GAT and the payment of all arrears since the legal operation of this facility began, to us,” the BASL Chairman requested.

However, speaking on behalf of FAAN, the Deputy General Manager, Public Private Partnership, Mrs. Monica Alphonse who has followed the case for a long time as senior official in the legal department of FAAN said that GAT has never been part of the concession agreement and that the monopoly status that stated that no other airport terminal should be developed during the course of the concession period by BASL may have taken cognizance of the fact that the concession was only for 12 years.

Mrs. Alphonse traced the background of the concession and said: “There was a request by FAAN inviting bidders to send in their bids for the development of a domestic terminal and that was how we came about the concession we have today. Talking about the agreement, Yes, Professor Akonde was engaged in drafting the document by the Federal Ministry of Aviation being one of the grantors. I am aware that the agreement was negotiated by both parties, so it is a product of the parties that executed the agreement.

“If you actually want to resolve the issues between the parties, it is fair that you hear from the other side. You cannot just hear from one side and pass decisions and expect it to be binding on the other party.

The decision will also impact on the other party. I have not heard where that is done and I don’t know how that is supposed to be done. We are not aware that the Minister of Aviation was put on notice, asked to send in their nominees or asked to come and make presentations. These are issues that concern both parties because when you talk of disputes, it takes at least a minimum of two parties for a dispute to arise, so you cannot hear from one side and draw conclusions,” Alphonse said,

She noted that resolution on the case was passed without recourse to FAAN and the agency was asked to implement it.

Mrs. Alphonse said FAAN has suffered so much over the concession.

“FAAN is bleeding over this concession. This is typical to the advert of a bank, where a woman holds the hand of her baby and walking into the bank and the girl was crying. That is FAAN going into the bank crying and shortly after that, they came out and the little girl was laughing and that is Bi-Courtney laughing. Since the commencement of this agreement, FAAN has not earned anything from the concession. The five percent concession fee is stated in the agreement. FAAN has not earned one kobo from Bi-Courtney and the reason is that we operate the GAT terminal and allow domestic flight into it.

She said the sole responsibility of FAAN apart from managing airports is to ensure that the airport operations grow seamlessly.

“What the agreement says is that it is for12 years and Bi-Courtney shall have exclusivity for the operations of all scheduled domestic flights. FAAN shall not materially develop any existing terminal that will compete with Bi-Courtney and FAAN shall not develop any competing terminal. When this agreement was put down, I have my reservations concerning the clauses.

“It was conceptualised with the vision of 12 years. Should we now say, based on the addendum that was put for 36 years, that for the next 36 years, FAAN should not materially develop another terminal? If the drafters of this agreement had the vision of 36 years at the back of their minds, I assure you, the issue of exclusivity would not have been there, the issue of non-development of domestic terminal to compete with Bi-Courtney terminal will not have been there,” Alphonse insisted.

She said the vision of government and its responsibility is to develop the country and described the Bi-Courtney agreement as anti-competition and monopoly, “for you to say that for 36years, there shouldn’t be any terminal that should be materially developed. That means for 36 years, we will remain with Bi- Courtney and even if aircraft are so much and there are no facility for them to land, they will remain in the air. I don’t like the experience of the air traffic controllers telling the pilots to keep hovering in the air for some minutes because there are no spaces to park the aircraft. Is this in the interest of Nigeria?”

Industry stakeholders reason that with the ICRC’s intervention, it is hoped that the issue, which is the most controversial in the aviation industry, would be amicably resolved.