Seventeen state governments are intensifying their drives for investors seeking to have a buy- in for airports in their domains.
The states – Lagos, Ogun, Ekiti, Osun, Delta, Akwa Ibom, Zamfara, Ebonyi, Anambra, Cross River, Taraba, Bayelsa, Yobe, Zamfara, Abia, Nasarawa and Edo are exploring investment model packaged majorly as public private partnerships (PPP).
Discussions by the state governments on the PPP, an expert familiar with the development, said it is being negotiated by local and foreign investors in the form of ; Joint Ventures , Concession and Memorandum of Understanding (MoUs).
The expert said investors keen on providing or funding infrastructure are packaging it as either Build , Operate and Transfer (BOT), Build Operate and Own (BOO) or Design, Build, Finance, Operate and Manage (DBFOM) in the respective airports.
Some of the states have been reaching out to would – be investors at Economic Summits/Investment Fora organised both within and outside the country.
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Airports in these states have either been classified as Passenger /Cargo Terminals or a terminology gaining traction in facility management – Aerotropolis.
Investigations by The Nation revealed that the states are looking for organisations to commit funds into flight and non – related projects that would boost economic/ industrial / commercial offerings in these airports.
An expert familiar with the development said the states are now looking beyond just terminal buildings where passengers are processed for flight, but facilities , including agro – allied processing , cargo , logistics , training centres, aircraft repair and overhaul centres and related initiative that would qualify them for an Airport City, or what aviation parlance is described as Aerotropolis.
It was further revealed that some state governments in the South East / South South regions are wrapping up discussions with aircraft manufacturers based in Canada and South America with possibilities of establishing an aircraft overhaul / repair centre at the airport in Anambra and Akwa Ibom.
A source familiar with the matter said Air Peace and Ibom Air have working relationships with leading aircraft manufacturers – Embraer and Bombardier.
Lagos State, which recently received approval from the Federal Government to construct a cargo /passenger airport on the Lekki/ Epe corridor intends to invest over $ 900 million.
The State Governor, Mr Babajide Sanwo – Olu said it is already seeking investors into the project.
The airport is proposed as a Public Private Partnership (PPP) between the state government and would-be investor in which the government would provide the land and other complementary infrastructure while the private partner would construct the airport on a Design, Build, Finance, Operate and Manage (DBFOM) basis under a competitive tender process and in accordance with international best practices.
Four rated firms had worked with Lagos State as consultants on the airport project.
They included Arup, a firm of consultant engineers, designers, planners and technical specialists; Norton Rose Fulbright, a global legal firm with 54 offices worldwide; Stanbic IBTC Capital, a member of Standard Bank Group, which was appointed sole financial adviser, and Banwo & Ighodalo, a Nigeria-based law firm.
The project, which is expected to take off in 2023 will be constructed on 3,500 hectares of land, noting that the master plan and aeronautical designs are in place; while studies are ongoing about strategies, funding and other issues, after which the project will be taken to the marketplace.
The airport, which is expected to cater to a minimum of five million passengers yearly, will be constructed in partnership with local and foreign investors.
In neighbouring Ogun State, its Commissioner for Information & Strategy , Abdulwaheed Odusile said it is already reaching out to investors for the project.
He said investors have indicated interest in locating businesses in the airport environment, especially those businesses inclined to export agro produce, finished goods for export and other related services and products.
“We are not just building an airport, we are building an aerotropolis. We are bringing different people to do business in the airport environment. This is a specialised airport as it will be an agro-cargo airport. Though there is another facility for passenger operations, already, some agencies of the government are scrambling to be here and I can tell you for a fact that the Nigeria Air Force is already looking forward to being here, as well as the Nigeria Customs Service and so many other private investors. This will be the only truly agro-cargo airport in Nigeria.
“The runway has about four layers with different classes of MM. The layer is about 65mm of asphalt, the second layer is about 50mm of asphalt and the next is about 100mm of asphalt. In the area of warehousing facilities, the state is not in the business of doing all those things by itself. We are going to have private investors to invest in the airport project. Already, there are lots of inquiries. Even the federal government is interested. The state government will provide private investors with the facilities to grow their businesses. That is why it is an aerotropolis.”
Anambra State , it was learnt, is seeking investors to buy into its cargo value chain to drive economic activities in the South East of the Niger.
Nasarawa on its part, sources say is seeking investors into the about to be completed Cargo/Passenger Airport in Lafia.
At a recent Investment Forum in the State, officials of the administration unfolded a blueprint to engage would-be investors into its Airport City Project.
Yobe, which is packaging an airport in Damaturu, is already reaching out to potential investors in the agro- allied value chain to attract economic activity to the North East Region.
Zamfara State, a source hinted, is wrapping up work on the airport in Gusau as the State Government is reaching out to would-be investors to drive solid minerals and precious stones and metals produce value chain.
Experts familiar with the development said Cross Rivers Government is reaching out to would be investors to boost tourism and hospitality activities around the airport in Bebi.
A source hinted that efforts are in full gear to complete the Ebonyi State Airport in Abakaliki for cargo and allied agro activities.
Bayelsa State Government on its part, a source hinted, has opened discussions with some carriers with possibilities of investing in its airport in Amassoma , near Yenagoa, the State’s capital.
Newly completed Ekiti State Government Airport in the capital Ado Ekiti is among aerodromes its promoters are seeking investors to buy into.
Speaking in a recent interview, Chief Press Secretary to the Governor, Mr Yinka Oyebode said lines of discussions have been opened with would be investors to open the state for economic prosperity.
Meanwhile, some experts in the aviation sector have decried the spending of huge funds by state governments for the construction of airports.
Several states have constructed airports in recent years.
The States include : Bayelsa, which put the cost of building the airport at N70 billion. Others include : Zamfara, Yobe, Ekiti, Osun and Ebonyi.
The Ebonyi State government budgeted N14bn for its airport project in its 2021 budget.
An aviation security expert and Chief Executive Officer, Centurion Security and Safety Consults, Group Captain John Ojikutu (retd.) ,said : “ I have repeatedly said that most of the states building airports now have no economic justification for such projects, based on available statistics in their states, especially the statistics for passengers and cargoes.
“The air passengers and cargo traffic between Yobe, Bauchi, and Gombe are not together up to 500,000 and 10,000 respectively. These do not make economic sense, if you consider the support that is needed in the health and educational sectors for the generality of the people of these states where the workers are hardly paid monthly salaries.
“Same with Ebonyi and Anambra that are within minutes away from Enugu and Asaba, even their boundary towns are close to Owerri.”
According to Ojikutu, the total air cargo in Nigeria has not exceeded 200,000 tonnes annually as against 100 million tonnes in maritime, and the total air passengers annually has not exceeded 16 million in the last five years.
“How much of that are they targeting?” he queried, saying the states building airports under the guise of building their economy should seek alternatives for economic growth.
The Assistant Secretary for the Aviation Round Table, a think-tank in the aviation sector, Mr Olumide Ohunayo, said “State governments will always do projects. They can label it anything just to get money out of the system to run the projects.
“Ekiti has Akure airport, which is about 30 minutes from it. Ebonyi has Enugu airport, which is less than one hour if the road is free. Anambra built an airport when there are Owerri and Asaba airports close to it.”
According to him, states should look at their purses, plans and visions and how they intend to run the airports.
He said, “For the core northern states, Yobe is understandable because of the distance to Maiduguri, considering the high level of insecurity.
“But for the South, we need to begin to look at how to develop the economy of their states. Politics should not debar states from talking even if they belong to different political parties.”
According to Ohunayo, states should build airports only when they will not have to service debts after the completion of the projects.
The Chief Executive Officer, MainStream Cargo Limited, Mr Seyi Adewale, expressed support for the building of airports in different states.
He said “Salaries can be considered an expense item and recurrent expenditure, whereas airport construction is a capital expenditure and non-recurrent.”
“These airports being constructed are important for creating jobs within the states. Construction remains one of the largest job-creating sectors that cuts across many artisans, industrial laity, and building professionals.
“Cargo inclined, it improves food and perishable distribution across the country. Enugu and Anambra proximity does not really matter. It is the route and value creation by each state that is important.”
According to the General Secretary, National Union of Air Transport Employees, Mr Ocheme Aba, investment in airports does not shield any state governments from fulfilling its obligations to its employees.
He said, “Any governor feigning incapacity to pay its salaries on account of airport development is simply irresponsible as building an airport is a capital expenditure as per budget. In these days of high insecurity, the absence of an airport in a state capital could hamper business and development.
“There is a connection between the development of a place and an airport available there. Top business travellers are not comfortable travelling by road, even for short distances.”