Globally, infrastructure concession has proven to be a way of reducing infrastructure deficit in a nation. Based on a Punch news report, the Federal Government has begun to request for proposals (RFP stage) from the pre-qualified bidders for the concession of Nigeria’s four major international airport terminals in the country, namely, Murtala Muhammed International Airport Lagos (MMIA), Nnamdi Azikiwe International Airport Abuja (NAIA), Mallam Aminu Kano International Airport Kano (MAKIA) and Port Harcourt International Airport (PHIA).
The phase, which started on 1 June 2022, is expected to close on 5 September 2022. The RFP phase is open to only short-listed bidders who successfully met the pre-qualification requirements during the Request for Qualification (RFQ) stage. The RFQ phase began on 16 August 2021 and ended on 25 October 2021.
Over the years, Nigeria’s widening infrastructure deficit has been a recurring discourse, as it is widely believed that the weak stock of infrastructure investments is one of the biggest challenges to the ease of doing business. From poor port infrastructure to dilapidated transport networks, epileptic power supply, and a huge housing deficit, Nigeria’s infrastructure gap cannot be overemphasized.
According to the IMF, Nigeria’s infrastructure stock of c.25% of GDP remains far below the 70% international benchmark. This implies that the country’s public capital stock per head is lower than the global average, a worrisome situation that has continued to hinder growth in GDP and private sector investments.
Since the government is incapable of embarking on such significant infrastructure development, public-private partnerships (PPPs) have emerged as one of the highly touted models the government can embrace to close the infrastructure gap. While this model has become part of government policies in both developed and developing markets, several attempts at concessioning public infrastructure in Nigeria have been riddled with many
controversies.
It is either government officials of the concessioned public utilities frustrate the efforts of the concessionaire (private investor(s)) through protests for fear of losing their jobs or persistent intervention by the government, leading to loss of the concessionaire’s interest. Among the various concessions in the aviation industry that have failed previously was the notable case between the Federal Airports Authority of Nigeria (FAAN) and Maevis Nigeria Limited between 2010 and 2012. Also, a concession arrangement between FAAN and AIC Ltd in 1998, which failed in 2000 over the construction of an international hotel around MMIA, is still pending in court.
Without a doubt, the quest to facilitate a concession agreement in line with the Infrastructure Concession Regulatory Commission (establishment, etc.) Act 2005 is highly commendable. At a time when the country’s oil revenue (Nigeria’s major revenue segment) is being lost to expensive subsidy payments, huge debt servicing and rising recurrent expenditure, the government cannot afford to bear the significant cost of infrastructure development which makes the timing of the proposed concession agreement opportune.
However, we are concerned about the continuity of the project since the current administration is left with less than one year to complete its tenure.
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