ICRC moves to resolve concession disputes between FAAN, MMA2

Infrastructure Concession Regulatory Commission (ICRC)

The Infrastructure Concession Regulatory Commission (ICRC) said on Monday that it will deploy everything within its ability to ensure the concession dispute between the Federal Airports Authority of Nigeria ( FAAN ) and Bi-Courtney Aviation Services is resolved.

The Commission, which is saddled with the responsibility of monitoring and ensuring the efficient execution of all A Public-Private Partnership (PPP) projects entered into by MDAs on behalf of the Federal Government said it has continued to engage Hadi Sirika, the Minister of State on Aviation since his  assumption of office on these challenges and believe they will be resolved soon enough in order to strengthen the relationship between the parties.

Recall that the MMA2 and the Hotel and Conference Centre concessions awarded to Bi-Courtney Aviation Services Limited as a PPP project for the design, engineering, procurement, construction, completion, commissioning, operations and transfer has been experiencing  several challenges.

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 cognizance 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.

Speaking during a visit by the commission to MMA2, yesterday, Chidi Izuwah, acting Director General ICRC said he was aware of the challenges between the both parties adding that “We want to listen to both parties as an independent regulator, we want to physically access the situation and challenges on ground in order to Bette appreciate the positions by FAAN and Bi-Courtney and thereafter suggest possible line of action in resolving these issues.

“We are interested in having an update from the parties on the performance of the related projects; we want to understand the challenges facing the operators, as well as the grantor of the contracts and the various steps taken towards resolving these challenges; we want to hear from the parties their requests to the government in ensuring the projects are efficiently implemented for the overall benefits to the government.”

Also speaking during the visit, Wale Babalakin, Chairman , Bi-Courtney Aviation Services said if Nigeria intends to encourage private sector participation in the infrastructural development of the country it must abide by international regulations; government and its agencies must respect and abide by concession agreements.

Babalakin denied the allegation that it was Bi-Courtney that drafted the concession agreement and also noted that the company was not the winner of the concession, but Royal Standerton, which was the preferred bidder; however, Bi-Courtney inherited the concession when the later could not meet the pace of work expected by the federal government.

Also speaking on behalf of FAAN, Monica Alphonse, the Deputy General Manager, Public Private Partnership, 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 for 12 years.

Alphonse described such clauses that gave BASL such advantage as antitrust and pro-monopoly, adding that the agreement should have been renegotiated if the concession was designed for 36 years and noted, that “such agreement is repugnant to natural justice”. 

She said that FAAN was willing to ensure that the problem between it and BASL over the concession was resolved. BASL officials also spoke in the same vein. 

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