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  • Port Harcourt Refinery: A concession gone awry

    Port Harcourt Refinery: A concession gone awry

    The rehabilitation and subsequent concessioning of the nation’s moribund refineries, starting with the Port Harcourt Refinery and Petrochemical Company, has pitched the executive arm of government against the legislative arm. While each of the parties to the controversy may have reasons for insisting on its position, industry experts and stakeholders say that urgent resolution of the disagreement will save Nigeria huge foreign exchange and jobs from importation of refined petroleum products. Assistant Editor EMEKA UGWUANYI reports.

    The executive and legislative arms of government are at loggerheads over the repair,  maintenance and concession of Port Harcourt Refinery and Petrochemical Company by Nigerian Agip Oil Company, the Nigerian subsidiary of Italian oil giant Eni, in partnership with Oando Plc, a Nigerian oil and gas conglomerate, the local vehicle.

    While the executive, through the Ministry of Petroleum Resources (DPR), believe that the arrangement was in Nigeria’s interest considering the technicalities and huge financial resources required to rehabilitate and manage a refinery, the legislature thinks otherwise.

    To the lawmakers, the DPR, under the arrangement, took a unilateral and unlawful action devoid of transparency and due process when it awarded the contract allegedly without wider consultation or open bid.

    The lawmakers, who have been literarily up in arms in the past two weeks, argued that the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, should have consulted and engaged widely with stakeholders and the public on the plan to rehabilitate and concession the refinery.

    Consequently, the aggrieved lawmakers have directed the Minister to put on hold the rehabilitation plan until they conclude investigation into the entire process of award of the contract to Agip and Oando.

    While the executive may have acted in good faith, in view of decades of government’s fruitless efforts to fix the moribund refineries after billions of naira have been sunk in Turnaround Maintenances (TAMs), the legislature argue that as a country guided by rules, the executive through the Ministry and the DPR should not have been involved in an arrangement that allegedly stood transparency on its head.

    The Head, Energy Research, Ecobank Group, Mr. Dolapo Oni, sought to justify the position of the executive when he said that the Minister’s involvement of private sector-driven firms was an excellent idea. According to him, the refineries had suffered negligence for a long time.

    His words: “Private sector help is appreciated in revamping the refineries. The refineries have suffered poor maintenance and needed to be restored to their true state. There are parts of the plants that need to be changed over the years, but because the refineries are managed by government, there were no funds to put them in their proper shape.”

    Oni said this was Kachikwu has been globe-trotting in search of investors with the requisite technical and financial muscle to bring the refineries back on track. “So, when the minister found Agip agreeing to his proposal to take over the Port Harcourt refinery, he quickly handed it over to the firm,” he said.

    Oni while reacting to the Senate’s directive that all processes to the rehabilitation and concession of the refinery to Agip and Oando be stopped, however, said although he doesn’t have the details of the transactions to enable him make informed comments, he does not see anything wrong with the Senate insisting on making details of the award public.

    Listen to Oni: “We don’t have the full details of the transaction. The Minister didn’t explain whether the Agip/Oando partnership will transfer ownership of the refinery to the government at some point or whether the partnership will seek repayment of the rehabilitation and management from the government. Making the details of the contract public is important.

    “Don’t also forget that the same Agip promised to build a brand new refinery in the Niger Delta. Will Agip hands off its involvement in the Port Harcourt refinery on completion of construction of the new one or will it manage the two refineries? These knotty areas need to be explained so that Nigerians and other interested investors will know.”

    Oni, however, said that the Senate should have invited Kachikwu for proper briefing before stopping the contract, noting that such unilateral decision by the Senate does not speak well of the country to investors. “The Senate should have called for proper briefing with the Minister before going public to stop the deal. The hallowed chamber’s action signals to the investors that we are not together as a people,” he said.

    Ecobank Group research head stated that the Ministry needed to conduct a proper concession process, while the Senate, going forward, needs to urgently notify the public what they found in the Ministry and lift the suspension so that work will continue on the refinery.

    This said this was necessary because Nigerians needed the refineries to work toi halt the huge roreign exchange and jobs that go into the importation of petroleum products.

    The Senate had last week asked the Federal Government through Kachikwu to suspend all processes for the concession of the Port Harcourt refinery to Agip and Oando Plc. The suspension order was sequel to a motion moved by Senator Sabo Mohammed at the plenary.

    In the motion entitled ‘Non-transparent transaction relating to the planned concession of the Port Harcourt Refinery to Agip and Oando by the Ministry,’ the Senate noted its worry on the “non-transparent transactions” of the planned concession.

    In the motion, Mohammed said: “The Senate is aware that the Federal Government recently entered into an agreement with Nigerian Agip Oil Company, a subsidiary of Eni, an Italian oil giant, to construct a $15billion refinery in the Niger Delta region.

    “It is a deal that also includes investment by Agip in a power plant, with the Italian company assisting Nigeria in the repairs of the Port Harcourt refinery.”

    “The Senate notes that the Minister stated that the agreement was part of a broader Federal Government plan to increase capacity for local production and consumption of petroleum products, with the aim of ending fuel importation in Nigeria by 2019.

    “It also notes that while the resolve by the Federal Government to increase local refining capacity is laudable and should be applauded by all Nigerians, the observance of corporate governance principles and the country’s extant laws must be followed to the letter.”

    On this note, Senate President Bukola Saraki who presided over the plenary, set up a seven-man ad hoc committee led by Senator Abubakar Kyari to investigate the transaction and the processes applied to select Agip/Oando for the deal.

    The Senate also mandated the ad hoc committee to probe the cost and timeframe of the concession. The hallowed chamber also stopped the entire transaction until the committee submits the outcome of its investigation.

    Besides, the lawmaker stated that the Senate was concerned that the planned concession of the refinery “without recourse to due process is illegal and a clear attempt at ridiculing Nigerians, and will definitely create a big hole that will be hard to fill in the anti-corruption crusade of the present administration.”

    The Senate said it was aware that in such transactions, the best practice was to select partners through open and competitive bids. Such steps, it added, will prepare the business for sale, market the business, select the buyers and close the transaction.

    The upper chamber noted that any exclusive arrangement that does not follow the above procedure, hatched in the dark without the knowledge and participation of relevant stakeholders, tends to lead to sub-optimal outcomes for the seller; in this case, the Federal Government.

    The Senate also said it was aware that the major stakeholders such as the Bureau of Public Enterprises (BPE) that was empowered by law to conduct such an exercise and labour unions were not aware of the deal that is supposed to be signed officially in July this year.

    Besides, the Senate expressed concerns that since Agip has no technical record or history in the Port Harcourt refinery that was built by a Japanese firm, one would have expected the concerned authority to look at the Warri refinery that was built by Agip where they have technical record.

    Mohammed also stated that the Senate was saddened that on assumption of office as the Group Managing Director of the Nigeria National Petroleum Corporation (NNPC), Kachukwu declared that by the end of 2015, the refineries in the country would be working at 90 per cent capacity.

    This, according to the Minister, will drastically reduce fuel importation and subsidy payments. Mohammed, however, stated that up till now, 2017, the refineries have yet to be fixed and can’t  produce at 50 per cent capacity let alone 90 per cent.

    To the lawmaker, such concession would have been wonderful should it result to an end to importation of refined products by 2020. “Is it Agip or Oando Plc that is taking over the Port Harcourt refinery? Was there observance of the privatisation law as regards due diligence and selection from preferred bidders before ceding Port Harcourt refinery to Agip/Oando?” he asked, insisting that the Minister needs to explain some issues in the transaction.

    Senator Dino Melaye also accused the executive of taking Nigerians for granted. Citing the concession of power supply to electricity generation and distribution companies and the concession of Ajaukuta and Delta steel companies, which have resulted to total decay of the industries, he said these may be replicated in the Port Harcourt refinery.

    However, the Chief Strategy and Corporate Services Officer, Oando Plc, Ainoije ‘Alex’ Irune, noted that Oando chose to be part of the deal because it shares government’s aspiration to make Nigeria self-sufficient in fuel production.

    “We wish to explicitly state that Oando shares the vision of the Nigerian Government to become a petroleum product self-sufficient country in the short to medium term and ultimately be a net exporter of such products.

    “Accordingly, pursuant to the Memorandum of Understanding (MOU) reached with the Federal Government and NAOC/ENI. Oando will partner with NAOC/ ENI in the proposed rehabilitation of the Port Harcourt Refinery (PHRC).

    “This will be based on a Repair, Operate and Maintain (ROM) agreement, which will see PHRC’s capacity grow from its current 30 per cent to 100 per cent, its name plate capacity of 210,000 barrels per day,” he said.

    ‘Alex’ Irune  said in line with the concerted efforts of the Ministry and the NNPC to aggressively drive private sector led refineries rehabilitation and expansion programmes, Oando as local partners to NAOC/ENI will support the rehabilitation of PHRC’s on activities. He said active negotiations are ongoing and it is expected that a final agreement will be reached by end of July, 2017.

    However, the outcome of the probe panel set up by the Senate to look into the rehabilitation and concession deal will determine how the partnership goes.

    The Minister had stated in Vienna, Austria, during the 172nd Organisation of Petroleum Exporting Countries (OPEC) meeting that the refineries concession cannot be done in an open bidding process because it’s a highly technical area.

    Also, Kachikwu had on May 9 after meeting with Acting President Prof Yemi Osinbajo and Agip officials at the State House, announced that the Nigerian Agip Oil Company had committed to repair the Port Harcourt refinery, as part of a $15 billion investment that includes building a 150,000 barrels per day refinery and a power plant in the country.

    As a follow up, the Chief Executive Officer of Oando Plc, Wale Tinubu, also on May 11, on the floor of the Nigeria Stock Exchange, said his company had received approval of the Federal Government partner with Agip on the refinery deal.

    Kachikwu said the entire refinery transaction was aimed at strengthening Nigeria’s drive to end fuel importation by 2019. In addition, last month, Kachikwu vowed to resign should Nigeria fail to achieve self-sufficiency in crude oil refining by 2019 with full implementation of government’s policies on the matter.

    In an interview with the BBC, Kachikwu insisted that the target for Nigeria to attain self-sufficiency in terms of crude oil refining remains 2019, adding that Nigeria should be more concerned about processing crude oil rather than shipping it out for processing elsewhere and importing refined products.

    But with the current disagreement with the lawmakers, there are fears that Kachikwu may renege on his pledge.

     

    Promises, woes of the refineries

     

    The Group Managing Director, (NNPC), Dr. Maikanti Baru, had last month stated that the Corporation was shopping for $16 billion to grow its upstream and refining operations and increase the nation’s oil refining from the current 445,000 barrels per day (bpd) to 700,000 bpd within the next few years.

    He said: “With respect to our refineries, our plan is to rehabilitate, and revamp our existing four refineries. We invite you investors to participate in this process. On successful rehabilitation and revamp, our plan is to upgrade the combined nameplate capacity from 445,000 barrels per day to 700,000 barrels a day within the next few years. We would require investments of between $5billion and $6billion.”

    He said NNPC was also mindful of the need to construct new refineries and hence it encourages investors in this area. According to him, the big picture is to transit from a net crude oil exporter to a net petroleum product exporter as more value and opportunities abound in the latter.

    Whether this aspiration will be accomplished, time will tell.

    Meanwhile, General Electric (GE) has pledged to assist the Federal Government in the revitalisation of the country’s refineries. The President and Chief Executive Officer of GE’s Grid Solutions/Energy Connections, Africa, Dr. Lazarus Angbazo, told reporters recently that the company still stands on its promise and was waiting for the NNPC on the areas to intervene in.

    Angbazo confirmed that the resuscitation of the refineries would enable Nigeria become self-sufficient in petroleum production, adding that the company would not hesitate in helping the country to meet the 2019 target to halt importation of petroleum products.

    According to the Central Bank of Nigeria (CBN’s) report, the Federal Government spent $6.09 billion on petroleum imports in the first six months of last year despite scarce foreign exchange and pressure on foreign exchange reserves. Even now, the government spends substantial amount on fuel importation and subsidy.

    Also, between 2000 and 2017, the government has spent over N10 trillion on fuel subsidies. According to the Chairman, Senate Committee on Petroleum Resources (Downstream), Senator Marafa Kabir Garba, the NNPC alone collected over N5 trillion on subsidies from 2006 to 2015.

    Reports also showed that the first Port Harcourt refinery was constructed by Shell-BP in 1965 at a cost of £12 million. It had a capacity of 38,000 barrels per day (bpd) and later upgraded to 60,000 bpd and was taken over by the Federal Government in 1971.

    The Federal Government in 1974 engaged a Texas based petroleum consultancy firm for a feasibility study on how to increase supply. In November 1975, contract for the construction of Warri Refinery and Petrochemical Company was awarded to Snamprogetti SPA of Italy for 100,000 bpd at the cost of $478 million. It was for a 30-month period and was commissioned in September 1978.

    Kaduna Refinery and Petrochemical Company contract was awarded to Chiyoda Engineering and Construction Company of Japan at a cost of $525 million in 1976 for 100,000bpd (refining in two streams of 50,000 for fuels and 50,000 bpd for lubes) with a completion period of 36 months and was commissioned in 1980.

    The 1974 feasibility was updated to meet new products demand. Warri was upgraded from 100,000 to 125,000 bpd while Kaduna fuel plant was increased from 50,000 to 60,000 bpd in 1985. The second Port Harcourt refinery was also designed for 150,000 bpd and awarded to a consortium of JGC Corporation, Marubeni Corporation (both Japanese) and Spibatignolles of France in October 1985 at a cost of $850 million for 36 months completion and commissioned in 1989.

    According to the report, between 1991 and 1992, the new Port Harcourt plant exported products and made $280 million for government. Exports, however, stopped later because Kaduna and Warri productions dropped.

    Currently, Nigeria refineries with a combined capacity of 445,000 barrels per day cannot produce 20 per cent of its installed capacity as the preference is imported fuel. The nation’s consumption capacity is put at highest 40 million litres of petrol about 208,799.40 barrels of crude per day, which can comfortably be produced locally.

    The oldest refinery in the world, the Digboi refinery, Assam in India constructed in 1901 is still refining crude. The oldest refinery in Jeddah, Saud Arabia was constructed in 1967. The newest complex refinery in the United States, the Marathon Petroleum Company in Garyville, Louisiana was constructed in 1977 and upgraded from a 200,000 bpd to 522,000 bpd capacity plant in 2014.

    The consensus of experts and industry stakeholders is that the only sustainable way to make the refineries work is to completely hand them over to genuine private sector operators, not fronts of government officials that will not play the game according to the rules.

  • Port Harcourt Refinery: A concession put on hold

    Port Harcourt Refinery: A concession put on hold

    The Federal Government’s plan to concession its refineries may not materialise soon. Reason: the Senate is investigating the proposed rehabilitation of the Port Harcourt Refinery and Petrochemical Company by a multinational oil firm. But, according to industry experts, an urgent resolution of the disagreement will be more beneficial to the country, reports Assistant Editor EMEKA UGWUANYI.

    The executive has been pitted against the legislature over the planned repair, maintenance and concession of the Port Harcourt Refinery and Petrochemical Company.

    Nigerian Agip Oil Company – the local subsidiary of Italian oil giant Eni, in partnership with Oando Plc, a Nigerian oil and gas conglomerate, were being considered for the job by the Federal Government before the National Assembly suspended the process.

    The Ministry of Petroleum Resources, which is driving the process for the government, believes that giving the facility to a private sector operator would serve Nigeria’s interest better.

    It was considering the technicalities and huge resources required to rehabilitate and manage a refinery but the Senate feels otherwise.

    To the lawmakers, the ministry erred by taking what they called a unilateral and unlawful action without recourse to transparency and due process. They accused the ministry of hiring a contractor without a wide consultation or conducting an open bid.

    According to them, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, should have engaged stakeholders and members of the public on the planned rehabilitation and concession of the refinery.

    They directed the executive to pull the brake on the rehabilitation plan pending the conclusion of investigation into the process that led to the award of the contract to Agip and Oando.

    Analysts argue that the executive may have acted in good faith following decades of government’s fruitless efforts to fix the moribund refineries, singing billions of Naira to carry out routine Turnaround Maintenances (TAMs).

    But the legislature said the executive, through the ministry and its Department of Petroleum Resources (DPR) agency, should not have been involved in an arrangement that lacked transparency in a country guided by rules.

    The Head, Energy Research, Ecobank Group, Mr. Dolapo Oni, threw his weight behind the executive, describing the decision to engage private sector-driven firms to revamp the refineries as excellent. He said the refineries had suffered neglect for a long time.

    Oni said: “Private sector help is appreciated in revamping the refineries. The refineries have suffered poor maintenance and needed to be restored to their true state.

    “There are parts of the plants that need to be changed over the years, but because the refineries are managed by the government, there were no funds to put them in their proper shape.”

    He said Dr. Kachikwu has been globe-trotting in search of investors with the requisite technical and financial muscle to bring the refineries back on track.

    “So, when the minister found Agip agreeing to his proposal to take over the Port Harcourt refinery, he quickly handed it over to the firm,” he rationalised.

    Reacting to the Senate’s directive that all processes leading to the rehabilitation and concession of the refinery should be put on hold,  Oni said the lawmakers did no wrong for demanding transparent process.

    Oni said: “We don’t have the full details of the transaction. The minister didn’t explain whether the Agip/Oando partnership will transfer ownership of the refinery to the government at some point, or whether the partnership will seek repayment of the rehabilitation and management from the government. Making the details of the contract public is important.

    “Don’t also forget that the same Agip promised to build a brand new refinery in the Niger Delta. Will Agip hands off its involvement in the Port Harcourt refinery on completion of construction of the new one or will it manage the two refineries? These knotty areas need to be explained so that Nigerians and other interested investors will know.”

    Oni, however, said the Senate should have invited Kachikwu for proper briefing before stopping the contract, noting that such unilateral decision by the Senate does not speak well of the country to investors.

    “The Senate should have called for proper briefing with the minister before going public to stop the deal. The hallowed chamber’s action signals to the investors that we are not together as a people,” he said.

    The Ecobank Group research head agreed that the ministry needed to conduct a proper concession process and that the Senate must urgently notify the public what they found in the ministry and lift the suspension so that work will continue on the refinery.

    He urged the two arms of government to smoothen the rough edges because the refineries must work to end the huge foreign exchange that go into the importation of petroleum products.

    Last week, the Senate asked the Federal Government through Kachikwu to suspend all processes for the concession of the Port Harcourt refinery to Agip and Oando Plc. The suspension order was sequel to a motion moved by Senator Sabo Mohammed at the plenary.

    In the motion entitled: “Non-transparent transaction relating to the planned concession of the Port Harcourt Refinery to Agip and Oando by the Ministry,” the Senate expressed concern on the “non-transparent transactions” of the planned concession.

    In the motion, Mohammed said: “The Senate is aware that the Federal Government recently entered into an agreement with Nigerian Agip Oil Company, a subsidiary of Eni, an Italian oil giant, to construct a $15billion refinery in the Niger Delta region.

    “It is a deal that also includes investment by Agip in a power plant with the Italian company assisting Nigeria in the repairs of the Port Harcourt refinery.”

    “The Senate notes that the minister stated that the agreement was part of a broader Federal Government plan to increase capacity for local production and consumption of petroleum products, with the aim of ending fuel importation in Nigeria by 2019.

    “It also notes that while the resolve by the Federal Government to increase local refining capacity is laudable and should be applauded by all Nigerians, the observance of corporate governance principles and the country’s extant laws must be followed to the letter.”

    Senate President Bukola Saraki has named Senator Abubakar Kyari to head a seven-man ad hoc committee to investigate the transaction and the processes applied to select Agip/Oando for the deal.

    The Senate also mandated the committee to probe the cost and timeframe of the concession.

    The upper chamber, which suspended the transaction, stated that the planned concession of the refinery “without recourse to due process is illegal and a clear attempt at ridiculing Nigerians, and will definitely create a big hole that will be hard to fill in the anti-corruption crusade of the present administration.”

    The Senate said the usual practice in such transactions was to select partners through open and competitive bids. Such steps, it added, will prepare the business for sale, market the business, select the buyers and close the transaction.

    The Senate also said it was aware that the major stakeholders such as the Bureau of Public Enterprises (BPE), a body statutorily empowered by law to conduct such an exercise and labour unions, were not consulted on the deal that has been scheduled for signing next month.

    Besides, the Senate expressed concerns that since Agip has no technical record or history in the Port Harcourt refinery that was built by a Japanese firm, one would have expected the concerned authority to look at the Warri refinery that was built by Agip where they have technical record.

    Mohammed had stated that the Senate was saddened that on assumption of office as the Group Managing Director (GMD) of the Nigeria National Petroleum Corporation (NNPC), Kachukwu assured that the refineries would be working at 90 per cent installed capacity by the end of 2015.

    This, according to the minister, would drastically reduce fuel importation and subsidy payments. But Mohammed, stated that up till now, the refineries have yet to be fixed and cannot produce at 50 per cent capacity, let alone 90 per cent.

    To the lawmaker, such concession would have been wonderful if it would end importation of refined products by 2020.

    “Is it Agip or Oando Plc that is taking over the Port Harcourt refinery? Was there observance of the privatisation law as regards due diligence and selection from preferred bidders before ceding Port Harcourt refinery to Agip/Oando?” he asked, insisting that the minister must explain some issues in the transaction.

    Senator Dino Melaye also accused the executive of taking Nigerians for granted. Citing the concession of power supply to electricity generation and distribution companies and the concession of Ajaukuta and Delta steel companies, which have resulted to total decay of the industries, he said these may be replicated in the Port Harcourt refinery.

    The Chief Strategy and Corporate Services Officer of Oando Plc, Ainoije ‘Alex’ Irune, explained his company’s involvement in the deal.

    According to him, Oando bought into the project because of its belief in government’s aspiration to make Nigeria self-sufficient in fuel production.

    Irune said: “We wish to explicitly state that Oando shares the vision of the Nigerian Government to become a petroleum product self-sufficient country in the short to medium term and ultimately be a net exporter of such products.

    “Accordingly, pursuant to the Memorandum of Understanding (MOU) reached with the Federal Government and NAOC/ENI. Oando will partner with NAOC/ ENI in the proposed rehabilitation of the Port Harcourt Refinery (PHRC).

    “This will be based on a Repair, Operate and Maintain (ROM) agreement, which will see PHRC’s capacity grow from its current 30 per cent to 100 per cent, its name plate capacity of 210,000 barrels per day.”

    He said that in line with the concerted efforts of the Ministry and the NNPC to aggressively drive private sector-led refineries’ rehabilitation and expansion programmes, Oando, as local partners to NAOC/ENI, will support the rehabilitation of PHRC’s on activities.

    According to him, a final agreement will be due by end of July after ongoing active negotiations.

    But, the outcome of the Senate’s probe panel will determine the agreement.

    Kachikwu, at the 172nd Organisation of Petroleum Exporting Countries (OPEC) meeting stated in Vienna, Austria, that the refineries concession cannot be done in an open bidding process because “it’s a highly technical area.”

    Also on May 9 after meeting with Acting President Yemi Osinbajo and Agip officials at the State House, , Kachikwu announced that the Nigerian Agip Oil Company had committed to repair the Port Harcourt refinery, as part of a $15 billion investment that includes building a 150,000 barrels per day refinery and a power plant in the country.

    Speaking on the floor of the Nigeria Stock Exchange on May 11, Oando’s Chief Executive Officer Wale Tinubu said his company had received approval of the Federal Government to partner with Agip on the refinery deal.

    Kachikwu said the entire refinery transaction was aimed at strengthening Nigeria’s drive to end fuel importation by 2019.

    He vowed to resign should Nigeria fail to achieve self-sufficiency in crude oil refining by 2019 with full implementation of government’s policies on the matter.

    In an interview with the British Broadcasting Corporation (BBC), Kachikwu restated Nigeria’s target to attain self-sufficiency in terms of crude oil refining by 2019, adding that the country should be more concerned about processing crude oil rather than shipping it out for processing elsewhere and importing refined products.

     

    Promises, woes of the refineries

    The NNPC Group Managing Director, Dr. Maikanti Baru, had last month stated that the corporation was shopping for $16 billion to grow its upstream and refining operations and increase the nation’s oil refining from the current 445,000 barrels per day (bpd) to 700,000 bpd within the next few years.

    He said: “With respect to our refineries, our plan is to rehabilitate and revamp our existing four refineries. We invite you investors to participate in this process. On successful rehabilitation and revamp, our plan is to upgrade the combined nameplate capacity from 445,000 barrels per day to 700,000 barrels a day within the next few years. We would require investments of between $5billion and $6billion.”

    Baru said the NNPC was mindful of the need to construct new refineries and hence, it will encourage investors in this area.

    According to him, the big picture is to transit from a net crude oil exporter to a net petroleum product exporter as more value and opportunities abound in the latter.

    Meanwhile, General Electric (GE) has pledged to assist the Federal Government in the revitalisation of the refineries. The President and Chief Executive Officer of GE’s Grid Solutions/Energy Connections, Africa, Dr. Lazarus Angbazo, told reporters that the company was waiting for the NNPC on the areas needing intervention.

    Angbazo confirmed that the resuscitation of the refineries would enable Nigeria become self-sufficient in petroleum production, adding that the company would not hesitate in helping the country to meet the 2019 target to halt importation of petroleum products.

    According to the Central Bank of Nigeria (CBN’s) report, the Federal Government spent $6.09 billion on petroleum imports in the first six months of last year despite the scarce foreign exchange and pressure on foreign exchange reserves.

    Even now, the government spends substantial amount on fuel importation and subsidy, the apex bank said.

    Between 2000 and 2017, the government spent over N10 trillion on fuel subsidies. According to the Chairman, Senate Committee on Petroleum Resources (Downstream), Senator Marafa Kabir Garba, the NNPC alone collected over N5 trillion on subsidies from 2006 to 2015.

    The consensus of experts and industry stakeholders is that the only sustainable way to make the refineries work is to completely hand them over to private sector operators and not fronts of government officials.

  • Labour warns against ‘secret’ concession of NRC

    Labour warns against ‘secret’ concession of NRC

    Labour has backed the Federal Government’s plan to concession the Nigeria Railway Corporation (NRC), demanding transparency in the process.

    It, however, kicked against the privatisation of the Federal Housing Authority (FHA), calling for its effective funding. It regretted that the FHA has been neglected by the government.

    Senior Staff Association of Statutory Corporation and Government Owned Companies (SSASCGOC), President Comrade Mohammed Yunusa, who addressed reporters in Abuja, warned against secret concession of the NRC.

    He pointed out that the union will support the planned concession of the NRC, only if there is a high level transparency in the process. He also added that privatisation of FHA will take away the ability of low-income earners to own houses of their own.

    The SSASCGOC chief warned against the government picking a favoured company behind the door, saying that the earlier attempt by the government to singlehandedly pick a company from the United States as a the concessionaire was not acceptable.

    Comrade Yunusa explained that the ideal thing to do is to advertise the concession and make it open for interested people to apply before the highest bidder with capability to run the corporation is picked.

    He said: “SSASCGOC is not averse to the change mantra of the present administration, particularly in its effort to bring back the rail networks in Nigeria to its lost glory.

    “It must be noted that Nigerian workers contributed immensely to the glorious performance of the rail sector up till 1984 before it started having problems. It must also be noted that workers of NRC were not in any way responsible for the demise of the then rail sector.

    “As a matter of fact, some of our members patriotically worked to the point of death.

    “We salute the courage of our heroes in the railway sector some of whom lost their lives in the quest to making the railway a pride of place for the nation. No thanks to irresponsible leadership.

    “Nobody should therefore attempt to discredit staff of the NRC just because of the failure of successive governments and its managers in NRC. To this end, we make bold to say we shall resist any form of reform aimed at discrediting and sending staff of NRC into the labour market, under whatever guise be it concessioning, franchising or public private partnership.

    “We have learnt our lessons from NITEL’s experience. Never shall we allow such again. According to Albert Einstein, we cannot solve our problems using the same thinking with which we created them.”

  • ‘Concession skewed in concessionaires’ favour’

    ‘Concession skewed in concessionaires’ favour’

    Can the Nigerian Ports Authority (NPA) dominate maritime business in Africa? Yes, says its Chairman, Mr Emmanuel Adesoye whose aim is to make the authority one of the best in the world. To achieve this, the board has introduced some innovations and reforms, such as review of concession agreement and consideration of payment for charges in Naira. With adequate infrastructure, he tells OLUWAKEMI DAUDA, NPA will surpass expectations and contribute more revenue to the treasury.

    As the Nigerian Ports Authority (NPA) chairman, what is your assessment of the ports?

    My assessment of the ports is that we have great assets in the Western, Eastern and the Warri ports. I am very impressed with the quality of the assets. Yes, there are few challenges here and there, but they are surmountable. Now, being on the Board provides a unique platform to make our collective contributions to further the advancement of our nation through one of the prime drivers of the economy – the Nigerian Ports Authority (NPA).

    You just started with issues of challenges, meaning you have obviously realised the Herculean task ahead of your Board. What are these challenges?

    There are lots of challenges. Take Apapa for instance. You see the gridlock, the bad roads, and the port access roads, all are very disheartening. You also see that some of the facilities are dilapidated infrastructure that need to be fixed. These are some of the physical challenges the Board and the management of NPA will have to address soon.

    The Apapa express road is appalling, given its economic importance to the economy. Yet, the government seems uninterested in rehabilitating it. Why has this been been difficult?

    I am sure not only the Federal Government is very much interested in fixing that road, the NPA and the Lagos State government are equally interested in repairing the road and I am sure hands are on deck to actualise this. If you talk to the management of the NPA, they will tell you that they have held several meetings with the Federal and Lagos State governments, and other stakeholders at the ports to fix the roads. The state government is collaborating with the Federal Government to address the issue.

    We, at the NPA, are addressing the issue of the gridlock along with the local management. The perennial Apapa gridlock, poor access roads leading to the ports and the absence or should I say non-functional truck holding bay – all of which have made port business tasking- would be resolved very soon. For instance, the Board, in collaboration with NPA management and the Federal Ministry of Transportation, are also exploring common strategies to ensure the speedy passage into law the Ports and Harbour bill by the National Assembly. It is hoped that when the bill becomes a law, it will provide appropriate framework for rapid port expansion and development, including capacity building.

    One of the problems facing the port is cargo diversion to the ports of neighbouring countries. What is your board doing to curb that?

    We must look at the issues that will make people divert their cargoes. Are they enjoying other things there? How many days does it take them to clear their cargoes there? That is why we must streamline our clearing processes and make our ports competitive. As a matter of fact, Nigeria supposed to be the hub of maritime  in the West and Central African sub-region. So, we should be the leading port in West Africa, if not in the whole of Africa. These are problems: we are not what we should be, but we are getting out of where we were and we are moving towards the right direction.

    What efforts are you making towards making the Nigerian Ports a hub?

    The board has a vision and it is to resolutely commit ourselves to the pursuit of excellence in service predicated on zero tolerance to corruption and its associated vices and also strengthen our regulatory role to concessionaires to make our ports the hub of maritime trade in Africa. We are also pursuing the core values of efficiency, customer and stakeholders satisfaction, safety and security in an innovative manner that would make our ports one of the best in the world.

    What is the NPA doing about the diversification of the economy?

    Indeed, the role of the NPA in the industrialisation and growth of economy, particularly during economic recession, cannot be overemphasised. It is a known fact that the maritime sector is one of the most important revenue earners for the government after the oil and gas sector. It, therefore, behoves on our Board in the performance of its oversight functions, to come up with concrete policies capable of rejuvenating the authority to confront and overcome its challenges.

    In what areas is your board contributing to NPA’s running?

    In transmitting the positive values of change in all ramifications, our Board is ensuring that the NPA is run in line with modern best practices comparable to the best ports in the maritime world. In actualising this conviction, we always seek expert advice both within and outside the Authority. The objective is to ensure that within our tenure of service, the NPA is elevated to a higher pedestal that will make it the hub of maritime business in both the West and Central African sub-region. This is why we are pursuing vigorously, core values of efficiency, customers’and stakeholders’ satisfaction, including safety and security, in an innovative manner. All these are geared towards making the ports attractive for business and generating more revenue for the government to meet its obligations to the good people of Nigeria.

    What are you doing about port infrastructure?

    The seaport infrastructure would be developed to meet international standard to boost efficiency at the port. Efficiency is a critical factor for handling goods in the international supply chains, and is viewed to impact transportation and logistics, which play an important role in trade exchange with other nations across the globe. Seaports have been considered to be essential elements in the international supply chains. They play a very important role and are the most critical nodes in the supply chain. It is widely believed that the seaports form vital link in the overall trading chain. The ports are components of freight distribution as they offer maritime to land interface for cross-border businesses. Therefore, the efficiency of seaport operations is vital for supply chains in our country and beyond. We have identified three areas as new framework of measuring performance of seaports. They are trade, logistics and supply chain channels and on these three areas, we are focusing seriously.

    What is your relationship with  other agencies at the ports?

    In our quest to improve the fortunes of the maritime sector, we are collaborating with sister agencies, such as the Nigerian Maritime Administration and Safety Agency (NIMASA), National Inland Waterways Authority (NIWA), and Nigeria Shippers Council (NSC), Ports’Concessionaires in implementating government maritime policies. In achieving this goal, the board has not lost sight in partnering terminal and other port operators in removing all encumbrances militating against our collective desire to achieve optimum performance and improved port services capable of attracting higher vessel patronage, which in turn will translate into more revenue for the nation.

    It is 11 years since the concession of the ports to private terminal operators. What is your take on the review of the agreement?

    Well, let me say that the concession of the ports to the private terminal operators was a laudable effort because it has increased the revenue of the government and that of the NPA. However, there is a lot for us to do in that direction because one of the visions of the   NPA board and management is to look at the concession, make it more friendly for both parties – the concessionaires and the NPA. Some of the concession agreements were skewed in favour of the concessionaires, and there are some other duties for us as the port owner that we also need to do. The overall review is ongoing and we believe at the end of the day, we will achieve a win-win solution to the concession that we have entered into.

    How long will it take the NPA to conclude the review?

    Well, as matter of fact, many of these concessions are for 25 years or more. The agreements were entered into in 2006, so we are talking of 10, 11 years, that means we are in the middle of the concession. The Board has set up the concession review committee, which is going to look at the concessions to ensure that it is win-win for both parties and that committee has started working right. We are looking at a group to work with the committee so that we can have a robust review of the agreement.

    Some of the terminal operators are indebted to the NPA. What are you doing to get them to pay?

    I think they are two ways. I think they owe the NPA and the NPA also  owes them as well. But the most important thing is for us to look at the accounts of those concerned and try as much as possible to ascertain who owes what. Apart from Intels, others also owe the NPA to the tune of N30billion. I am not unaware of this, most of it would not be unconnected with the currency of payment. For example, I know of a concessionaire who owes NPA about N30 billion and is ready to pay. But we wanted payment in dollars. That is an issue which we are trying to review. We are going to look at the situation and look at how best they can pay. We know that some of these people owe us, but the most important objective is to agree on the currency of payment and they are willing to pay.

    Are you against payment in our currency, which the concession-aires are willing to pay with?

    What was in the agreement ab initio? Was it that the currency of payment would be dollar denomination? So, why try to change that now by wanting to pay in naira? That is one issue. Their non-response to pay in dollar may not be unconnected with the scarcity of dollar. First of all, will the Central Bank of Nigeria (CBN) be able to release this money to them in dollars if they have the naira? And that is one area to look at. When the concession was done, the dollar rate was not as high as it is today, but now, they have to go to the parallel market to buy dollar at N400 or more, and that is a big challenge, I agree.

    How do you reconcile this?

    That is why there is the need for the review of this concession to see how it can be solved. The bottom line is that they are running a normal trade in Nigeria and if they need the dollar, they should be able to approach the CBN. But would the CBN be able to give such money today, considering the scarcity of dollar?  So, those are the issues.

    With this scenario, will the concessionaires be justified if they increase their charges?

    I am not aware of any plan to increase charges and I am not sure this is the time to contemplate that. If they are talking of dollar increase, there are tremendous efforts by the Federal Government to shore-up the naira and I think that should inform any decision now. Agreed that in the last two to three months, there has been a geometric increase in dollar rate to the naira, but efforts have been made by the Federal Government and the CBN in recent time to address what led to the depreciation of the naira. Therefore, my advice to them (port concessionaires) is that they should not increase their charges, at least, for now. They need to review it with the management of NPA if they have to increase charges. But definitely, this is not the time to contemplate increase in charges.

    What is your board doing about the Calabar Port dredging? The public is of the opinion that it is an avenue to siphon public fund?

    Are you saying that the NPA paid for the award of the contract and it was not done? I am not aware of that if that is the case.

    Are you not also aware that the Economic and Financial Crimes Commission (EFCC) is investigating the case now?

    Ok, I am sure the EFCC is a competent authority to announce anything that is being investigated.  But I am not aware of any payment made and the job was not executed.  If there is such a thing, I am sure the EFCC will unravel the problem, and bring it to the fore.

    What is the position of your board on the dredging?

    The dredging of the port in Nigeria is very important. If we have problem of dredging in Calabar, so also we have in Warri Port. But you see, you have to tie your development to the opportunities and the revenue that are available.  The concern, therefore, is, which one comes first? Is it the chicken or the egg? Which one do you want to do first? Is it the dredging and you don’t have any activity going on there or what? When you dredge and you don’t do anything, the thing can easily get silted and that means you have to come back again and again.

    Therefore, you have to look at it strategically and determine exactly the time to do it. I think what the Federal Government is doing through the EFCC is very importation. We should look at what is happening right now and try to unravel it. For us, as the management and Board of the NPA, we have to sit down and look at strategic plans to ensure that the ports are given a facelift.

    There are allegations that NPA is manipulating the procurement process?

    I am not aware of any manipulations.

    What procedure are you using in your procurement process?

    The procedures are there, and they are being adhered to, I believe. I believe that proper procedures are being followed in line with the procurement Act and the authority of the board of the NPA.

    What is the relationship between your board and management?

    There is cordial relationship between us.

     

  • Furore over airports concession, privatisation 

    Furore over airports concession, privatisation 

    Discontent is growing among players in the aviation sector over plans by the Federal Government to either concession or privatise some airports. Suspicion is rife among airline operators, union members and workers of aeronautical authorities over what model and scope the concession will take, KELVIN OSA OKUNBOR reports.

    DISCONTENT is growing in the sector over plans by the Federal Government to concession or privatise the international airports.

    Stakeholders, including airline operators, unions and workers of aeronautical authorities, have accused the government of not making public the template for the proposed concession or privatisation  of the terminals in Lagos, Abuja, Port Harcourt and Kano.

    The allegation is based on speculations that the Ministry of Aviation may have concluded plans to hand over the juicy terminals to some Arabs managing airports in Turkey and some Middle East countries.

    Minister of State, Aviation, Hadi Sirika, has inaugurated a steering committee to prepare the handing over of the airports to prospective investors.

    Stakeholders are kicking against their non-inclusion in the committee, alleging that the minister might be acting a script.

    They said the government had to go the extra mile to make public the template to be used for the concession.

    The question many industry watchers are asking is: the number of airports for concession and what aspects of the airports to be concessioned without compromise to national security.

    Unions have vowed to mobilise against the proposal if the interests of their members were not protected.

    Sirika has, however, assured the unions that their members’ interest  would be protected. He said the workers would not lose their jobs, if they allowed the government to concession the airports to bring about efficiencies, create national wealth and prepare the ground for the airports to become hubs.

     

    Stakeholders forum in Lagos 

    But as lofty as the plans may appear, industry watchers are suspicious that it is another attempt to pull the wool over their eyes. They believe there is more to the proposal than meets the eye.

    In Lagos last week, a private firm convoked a conference to examine the privatisation/concession of the airports. Sirika was absent at the event. The minister’s absence, despite assurances of his attendance to the convener, Mr Michael Ckikeka, seemed to have confirmed the suspicion of players over the insincerity of the exercise.

    Head, Research and Stratety, Zenith Travels, Mr Olumide Onunayo, urged Sirika to convene a stakeholders’ conference that would draft a National Civil Aviation Policy (NCAP) to address issues related to airports concession.

    He said concessioning airports in Nigeria was premature, and if the government had to concession the airports, the terminals should be handled as a chain.

    Onunayo said: “On the concession of choice airports, there are fears because of Nigeria’s perculiar environment. It may have worked in the United Kingdom(UK). The UK’s privatisation worked well, because it is a mature political society, with experience of being a regulated environment for decades.

    “In less-developed countries, such as ours, governments should be tilting towards building and enhancing the transport system rather than just offloading the assets. This is to avoid a situation whereby we move from ugly state-owned airports to even uglier privately-owned airports. It is noteworthy that most reputable private sector investors would not consider buying an airport with fewer than one million passengers.

    “That is why airports have often been sold as a package – good and bad, small and large, domestic and international. In achieving the objective, the government should, as a first step, invite reputable international airport management companies, who will often achieve what governments can no longer take care of, improvements in capacity, efficiency and safety.

    “The private managers are internationally recognised airport operators with track records, who can be sourced and verified by a click of the mouse. They will act as advisors or management consultants to the government within a limited time frame; during this period, they will be given the Federal Airports Authority of Nigeria (FAAN) to manage, restructure and reposition,” he added.

    He said this would strengthen and improve FAAN’s corporate governance structure while our political environment would also mature to adapt to the inevitability of privatising the airports.

    “These airport management companies should be selected through an open and transparent process backed with international referral,” Onunayo added.

     

    Airline operators’ perspective 

    Domestic airlines, which are expected to benefit from the proposed airports concession, have accused the government of not carrying them along.

    Chairman, Airline Operators of Nigeria (AON), the umbrella body of domestic carriers, Captain Nogie Meggison, said operators were yet to be notified by the Ministry of Aviation of any plan to concession the airports. He said operators were yet to see either the framework for the concession.

    Meggison said  the communication gap had cast doubt on the sincerity of the exercise, stating that stakeholders were confused about what aspects of the airports – landside or airside – are billed for concession.

    He said a clear picture should be presented on how the government intended to concession the airports.

    He said: “Are the airports to be concessioned or ruzn as public private partnership, a joint venture or build operate and transfer? How many are to be concessioned? For how many years?  How much is the yearly fee to be paid to the government?

    “But, I believe Nigeria needs airports of standards to take its rightful place to become hub of Central and West Africa,” Meggison added.

     

    Litigations over previous concession 

    To restore investor confidence, experts said litigations over poorly-handled airport concessions needed to be critically looked into by the government.

    This, they said, has become imperative as no investor would be willing to do business on a battlefield.

    Former Director-General, Nigerian Civil Aviation Authority (NCAA), Dr Harold Demuren, insisted that if  litigations on some concessions, public-private partnership or build, operate, transfer agreements were not addressed, the proposed airports concession would not work.

    According to him, the concession plan is good but the agreements have to be honoured in existing and future concessions.

    Demuren said: “When the government does not honour agreements, it destroys the sector and everything it has made. The concession plan is great but we can’t continue to operate by cancelling agreements all the time, in fact, all issues, litigations or agreements should be reviewed before we talk about another one.”

    He said if the government went ahead with the concession without resolving issues on previous ones,  there would be a flurry of litigations.

    He urged the government to engage the unions, be honest about the issue and not renege on its promises to Nigerians.

     

    Private sector  experience 

    Meanwhile, operators of the only private airport terminal in Nigeria, Bi-Courtney Aviation Services Limited (BASL), has thrown their weight behind the proposed concession.

    Its Chief Executive Officer, Captain Jari Williams, said concession was the only solution to infrastructure deficit in the country.

    He, however, said aviation had not been spared in the wind of controversial concessions, which had either failed or were stalled by the government.

    “There are no two ways to save our almost-derelict airport terminals than concession,”he said.

     

    Sirika’s defence of

    concession 

    Sirika said there was no going back on the concession of airports, saying the concession would not only bring an excellent passenger experience but would turn the gateways around in one year.

    Sirika contended that the best way to attract passengers, investors and turn the airports into hubs was to concession them.

     

    Unions’  perspective 

    Air Transport Services Senior Staff Association of Nigeria (ATSSSAN)  President Comrade Benjamin Okewu said his colleagues were opposed to the exercise, especially the revenue-generating airports.

    The unions, he said, needed to be carried along to understand the intentions of the government.

  • Forex concession: NCAA urges airlines to improve service

    Forex concession: NCAA urges airlines to improve service

    The Nigeria Civil Aviation Authority (NCAA) has advised airlines to operate with renewed vigour, as they  have secured a special sectoral Foreign Exchange (forex) allocation in the Secondary Market Intervention Sales (SMIS).

    NCAA’s Director-General Capt. Muhtar Usman gave the advice in a statement  in Lagos yesterday.

    The forex concession was recently granted to airlines by the Central Bank of Nigeria (CBN) following the intervention of the Minister of State for Aviation, Hadi Sirika.

    The statement said: “This is to further engender market confidence, ensure access to forex by the airlines and sustain the integrity of the Nigerian Inter-bank forex market.

    “The CBN has resolved pursuant to the minister’s show of concern to intervene in the inter-bank forex market through forward settlement.

    “For clarity, the SMIS retail is an important one-off exercise dedicated to the clearance of backlog of matured forex obligation for airlines”.

    According to the statement, this success is another step ahead in seamless operations in the aviation industry.

    “It is expected that this is a major window for those airlines that had earlier ceased their operations to recommence in earnest.

    “Therefore, with this intervention comes a landmark incentive for both local and foreign operators to carry out safe, secure and lucrative operations in Nigeria.

    “In addition, all scheduled and mandatory checks which are done in the diaspora will be undertaken with this leverage at a reduced cost.

    “The NCAA, therefore, expects foreign operators to carry out their operations with renewed vigour,” the statement said.

    It added that problems associated with repatriation were now a foregone conclusion.

    The authrity advised operators to take full advantage of this laudable gesture of the Federal Government and adhere strictly to the provisions of the Bilateral Air Services Agreement (BASA) with Nigeria.

    NAN reports that Usman earlier led a delegation of Airline Operators of Nigeria (AON) to meet with ministers of State for Aviation, Finance and their Petroleum counterparts, including the CBN governor.

    As a result, Sirika was able to extricate for foreign airlines, 50 per cent clearance of their forex obligations.

  • House Committee seeks public hearing on airport concession

    The House of Representatives Committee on Aviation said yesterday that it will call for public hearing with stakeholders to discuss the proposed concession of some airport terminals by Federal Government.

    The committee also expressed dissatisfaction with the slow pace of work at the new international terminal being constructed by the Chinese Civil Engineering Construction Company.

    The committee said given the current pace of work, the contractors may not be able to deliver the project in December.

    Its Chairman, Hon Nkieruka Onyejiocha said the public hearing will enable the lawmakers get the input of industry players on the proposed concession.

    She said concession may not be the best way to go as it will mean giving out airports that are yielding revenue to government.

  • Power: FG to concession eight dams

    The Federal Government Wednesday said it has earmarked eight hydropower dams for concession in order to improve power generation.

    The hydropower dams, the government said, will be handed over to the unnamed firms soon.

    Assistant Director, Hydropower in the office of Federal Ministry of Power, Works and Housing, Mr. Abubakar Aliyu, disclosed this when officials from the Federal Ministry of Water Resources carried out a familiarization tour to Bakolori Irrigation Scheme in Talata Mafara, Zamfara state.

    Aliyu said the ministry of power, works and housing was partnering with Federal Ministry of Water Resources to increase power generation in the country.

    “Eight hydropower dams have been earmarked to be concessioned on power generation. It will take effect soon,” he said.

    Earlier, Project Coordinator, Transforming Irrigation Management in Nigeria (TRIMING), Mr. Peter Manjuk, said about six states will benefit from the irrigation project.

    The states include Zamfara, Sokoto, Kano, Katsina, Jigawa and Gombe.

    He said the project is targeted at rehabilitating all existing dams to make them meet irrigation and hydropower needs of the country.

    Manjuk noted that Nigeria must get it right if it hopes to meet the demands of food production and food security.

    He stated that despite huge investments on dams and irrigation in the country by the government, Nigeria had not achieved any meaningful socio-economic impact, adding that there was need for deliberate efforts to meet this target.

    He stressed the need for farmers to take ownership of all irrigation projects to enable them boost food production at its optimum level.

    The project coordinator said the World Bank sponsored project has begun rehabilitation of the Bakolori irrigation scheme, adding that it would be completed within three years.

    Project Manager of Bakolori Irrigation Scheme, Alhaji Lawal Maidoki, said since 1983 that the dam was created, it had been providing domestic water supply to Sokoto, Kebbi and Zamfara states.

    Maidoki said there was need for investors to come in to rehabilitate the dam towards improving food production, flood control and power generation.

    He said the dam was faced with low workforce, due to retirement, and infrastructure vandalisation, calling for improved security to reverse this trend.

    Maidoki added that with the TRIMING project, farmers would put in their best to increase food production.

    Federal Government recently signed a Memorandum of Understanding with Songhai Farms Limited in Porto Novo to reposition the River Basins across the country.

    Part of the provision is the introduction of the Graduate and youth empowerment scheme to boost food security.

  • Unions protest airports’ concession

    Unions protest airports’ concession

    Trade unions in the aviation sector yesterday, at the Murtala Muhammed Airport, Lagos, protested against the proposed concession of four major airports.

    The protest was organised by the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN), the National Union of Air Transport Employees (NUATE) and the National Union of Pensioners (NUP).

    The News Agency of Nigeria (NAN) reports that the Federal Government is planning to concession Lagos, Abuja, Kano and Port Harcourt airports to increase their capacity and efficiency.

    The protesters carried placards, inscripbed with: “Don’t Sell Our Future”, “Don’t Concession Our Airports,” and “FAAN Should Not Be Killed”, urging the government to reconsider its decision.

    The over 1,000 protesters were guarded by airport security officials and the police to prevent a breakdown of law and order, and ensure free-flow of traffic.

    The unions, in a leaflet distributed, said airports concession was a threat to national security.

    They argued that the concession would kill the 17 local airports, saying this is tantamount to “economic terrorism”.

    The unions urged the government to review FAAN’s concession agreements, especially that of Bi-Courtney Aviation Services Limited and Avitech.

    Minister of State for Aviation, Capt. Hadi Sirika, had assured the unions the concession would not lead to job loss.

    Sirika said the plan was aimed at ensuring the establishment and sustenance of world-class standards in infrastructure development and service delivery.

    He said concession was not tantamount to privatisation or outright sale.

    According to him, the facilities being concessioned remain the property of Nigeria and FAAN.

  • Aviation pensioners oppose concession, privitasation of airports 

    The Nigeria Union of Pensioners (NUP), Federal Airports Authority of Nigeria (FAAN), branch said they are opposed to plans by the Federal Government to concession or privatise four airport terminals in Lagos, Abuja, Kano and Port Harcourt .

    They said the move is against national interest as the persons, or company to be contracted to handle these international airports could be hired, to allow weapons into the country .

    Speaking at a briefing in Lagos yesterday, the National Chairman of NUP, FAAN, Comrade Rasak Ope and the Administrative Secretary, Comrade Emeka Njoku, said previous attempts by government to achieve any form of concession in the aviation sector has been fraught with controversies .

    They said rather than concession the airports, FAAN, should be allowed to run existing airports without interference, saying the last administration excluded FAAN from privatisation, or concession based on its security implications .

    They urged the Federal Government to focus on airports rather than privatalising these viable airport terminals, adding that  since the Minister of Aviation, Capt Hadi Sirika  is determined to make the airports profitable, he should concentrate on unviable airports and make them viable.

    The union officials explained that airports across the world, represent a  country’s sovereignty, hence handing them to individuals or group of people portends danger to the country.

    They said previous attempts aimed at privatising some government entities, including  the Power Holding Company of Ngeria, Ajaokuta Steel, Nigerian Ielecommunication and the Nigeria Airways, did not yield the desired results.

    “How can we give out our national heritage to individuals to operate, thereby undermining Nigeria’s sovereignty, losing sight of the security implications, which is supposed to be paramount in every sphere of our national life? they queried, stressing that airports should not be seen as buying and selling ventures, where profit should be the yardstick

    “Airports represent the public interest, such as economic, social activities and international connections, from country to country and state to state,” they said, pointing out that  contracting our four major airports to a person or company to handle could be dangerous as interest parties could be  hired or compromised to  allow weapons into the country, including people of questionable characters.

    “They can use this laxity to flock into the country and forment trouble which can lead to the  deaths of citizens.

    They argued that it was inappropriate  at this time when Nigeria is still battling with Boko Haram’s agitation  state of Biafra and militancy. Therefore we should not open more ways for trouble in the name of “wanting our airports to be more viable and putting Nigerians in danger,”

    They questioned whether the Act establishing FAAN has been abrogated or amended by the National Assembly to warrant the implementation of this plaaned concessin, or privatisation.