Airport Concession: Former FAAN MDs, Directors tell Reps Nigeria risks invocation of Mezzanine Clause
Agroup of former Managing Directors and Directors of Federal Airports Authority of Nigeria (FAAN) have identified the Mezzanine Clause in all Chinese sponsored infrastructures stating that any contravention of Agreement with China on the $500m loan for the construction of the new terminal building may lead to the invocation of the clause.
The Mezzanine clause in all Chinese sponsored infrastructure gives the Asians claim to the infrastructure should the host country defaults in payment. If Nigeria should fail to pay as at when due, China would seize the infrastructure, administer it and recover their investment.
The group made this known in a letter to the Chairman, and Members of the House of Representatives Committee on Aviation, lending their voice to the ongoing concession of airports while stating that it was corruption to concession the same terminal to a third party which will not sow a single penny.
The letter was jointly signed by nine(9) former directors including Engineer Ibrahim Mamman, Engineer Sani Babam Engineer Isaac Sakpere; Mr Sule John Ozenua, Engineer Lawrence Adimonye, Engr. Muhammad Sadiq; Engineer Olufemi Shittu, Engineer Rabiu Baba and Arc M.A. Enigbokan
It read,” Contravention of Agreement with China on $500m loan for the construction of the new terminal building at MMA, MAKIA, NAIA Abuja, Port Harcourt and Akanu Ibiam International Airport, Enugu.
“The new terminal buildings in these five international airports were constructed with $500m China loan. We are all now aware of the Mezzanine clause in all Chinese sponsored infrastructures by which they lay claim to the infrastructure should the host country defaults in payment. If Nigeria should fail to pay as at when due, China would seize the infrastructure, administer it and recover their investment.
“The most reasonable thing to do is for FAAN to administer them, collect the revenue and pay back the loan. It is preposterous for the Minister of Aviation to propose to concession the same terminal buildings to a third party which will come to reap where they did not sow a single penny, while the debt liability will be transferred to FAAN and the Federal Government to pay.
“This is a classical case of corruption of the highest order, which the President has sworn to eradicate from Nigeria.”
The group also identified safety and security of the entire nation as another reason the concession plan should be reconsidered highlighting security threats like drug trafficking, gun running and the likes.
The position paper read,” All airports are considered as boarders of the host country. So they are security posts. The entire security of the nation can be compromised if the Airports are in private hands. Setting up a Government security apparatus to oversee the security cannot solve the problems because the Private Airport Operator can create avenues to circumvent security in the transportation of arms and ammunitions, drugs, fake currency and other dangerous goods.
“ The Government will then need the cooperation of the Operator of the Airport to securely manage the whole airport infra-structure. But with the present Government ownership and FAAN management of airports such nefarious activities cannot be entertained. This is one of the reasons why FAAN should be strengthened to run the airports in a profitable manner and then pay a large percentage of their earnings to the Federal Government through the TSA.
The former directors also decried that people who are close to a sitting President always contrive ways of fraudulently selling choice National Assets to themselves at extreme loss to Nigeria and Nigerians.
According to them, if indeed the concessionaires are bringing capital to develop the airports, why is it that their first priority is to cherry-pick the busy International Airports and pounce on the revenue points to collect all revenues?
The group also proffered solutions to issues majorly faced by FAAN from dilapidating critical asset, revenue collection efficiency to continuous review of medium and long term plans calling for an increase in Passenger Service Charge (PSC) and deployment of the increased revenue to fund re-surfacing works and scheduled repayment of loans.
They also canvassed, reintroduction of regular airport operations and maintenance funding from the current level of revenue with immediate effect to tackle security, safety, operations, airport maintenance and utility bills