Babalakin: Concession Must Be Done in Accordance with Rule of Law
Chairman of Bi-Courtney Aviation Services Limited, Wale Babalakin reasons that for the private sector to invest in infrastructure in the country through public, private partnerships, the government must be ready to honour its agreements. Babalakin spoke to journalists during the 10th anniversary celebration of Murtala Muhammed Domestic Airport terminal (MMA2).Chinedu Eze was there. Excerpts:
One would have thought that it is through dialogue that the issue of the concession agreement between the federal government and BASL would be resolved?
The former President of Nigeria, the late Umaru Yar’Adua presided over the issues concerning the MMA2 concession. All the issues were resolved, minutes of meeting were issued and copied, so as far as dialogue is concerned, we have done the dialogue and will continue to dialogue. We appeal to the media to let those who are in charge to do the needful.
What are the challenges or constraint that you are still facing today as regards regional flight operations from MMA2?
We got approval to conduct regional flight in 2006/2007. We built a place for regional flight and till date you will be surprised that we are still not using up to two-third of the terminal, about one-third is completely idle and a substantial part of it is for regional flight. Two years ago, the federal government signed an agreement for us to commence regional flight immediately but to our shock, we have not been able to commence. We are told that it is between the Federal Airports Authority of Nigeria (FAAN) and the Nigerian Civil Aviation Authority (NCAA), that they are stopping us. We are ready, willing and able to commence regional flights. We actually sympathise seriously with the airlines here that use the same planes for local flight and regional flight. When they land at the domestic runway and their next flight is a regional flight, they have to taxi to international burning fuel that no one compensates them for. So, it is up to you, the media to bring this issue out and let the government do what they are supposed to.
What steps do you think the government should take to move infrastructure to the next level in Nigeria?
Concession should be done appropriately and according to the rule of law. You cannot wake up and allocate terminals on a subjective basis to anybody without recognising those who pioneered this issue. But whether this will happen or not, depends very much on how you, the custodian of information sell it to Nigerian public. Let me let you know that anyone who puts money in infrastructure loves Nigeria. Everyone who runs an airline loves Nigeria because if the same amount of money were invested in trading, they will make more than they do today. We need to let the public know that these are men making great sacrifices. I wish you know how much efforts the airline operators need to make to make a margin. I wish you know how big our margins are, that is if there are any margins at all.
Is it possible to expand the share hold base of your company by going public?
We are ready willing and able to expand our share hold base. But when we have a few of you, we then go public but there are no massive returns but if you are committed to it, you can move on.
You claimed that government owes you N200billion debt. Can you throw light on that?
MMA2 was built on a premise which was that all domestic flights from Lagos state must come from airport operated by MMA2. It was signed. In furtherance and in obedience to this provision, as soon as MMA2 was ready, government closed the GAT completely. One day we woke up and Arik airline began flying from GAT in deterrence of this clear provision of the law. How lawyers had anticipated this issue so the agreement provides that if there is a need to increase the capacity of MMA2 to accommodate domestic traffic, government hereby guarantees and assures that MMA2 will be the operator.
So, they had anticipated that it was possible that somebody will try to break the law, even if you break that law, the agreement is the all revenues must come to us. When this happened, we complained. We now went into arbitration; this arbitration was by the federal government. The Attorney General of the federation set up an arbitration panel of three members from Bi-Courtney and three members of the federal government. The arbitration unanimously was all in favour of Bi-Courtney stating that one, the concession is for 36 years; two all revenues from domestic traffic is for Bi-Courtney; three, general aviation terminal in its entirety belongs to Bi-Courtney and four if there is deviate person operating from GAT, he should pay directly to MMA2.
This was the tribunal set up by the federal government. We had no choice than to go to the court, when this persisted. My first action was dialogue because in 2009, the court ruled that the development going to GAT is an embarrassment to Nigeria as it violates every principle of the Nigerian law. Those who felt they could ignore it, ignored, then we approached the court presenting a case for damages. After considering all the submissions, the court awarded us N132billion damages in 2012, which remains unpaid till date.
Furthermore everybody went on appeal. Federal government went on appeal dismissed, Arik went on appeal dismissed, FAAN went on appeal dismissed, NUATE (the National Union of Air Transport Employees) went on appeal dismissed, ATSSAN (Air Transport Service Senior Staff Association) went on appeal dismissed. All the appeals were dismissed. Arik horridly went to the Supreme Court; the case was dismissed in five minutes because as soon as the judges looked at it they said this is a total insult on Nigeria and dismissed it. Since 2012, the same authority has been accumulating this money, which is now N200billion.
Then our lawyers said AMCON (Asset Management Corporation of Nigeria) is a federal government agency and they are owing you (me) so much, approach the court and tell them to give you balance. So, they went to court and the court ruled that whatever debt they (MMA2) owe should be set off against the credit it has with federal government. We have a net credit in excess of N100 billion which we have not received but they still continue to say we are indebted to AMCON. Based on Nigerian Law, Bi-Courtney owes no dime to AMCON.
I would like to know if you are making profit or not and the level of investment over the last few years?
If government owes you N132 billion and you have to keep the terminal running, pay for electricity all the time, ensure the service providers are paid; it is very difficult to make profit.
What do you think will be the right ways to approach concession?
Let us be frank, government cannot develop infrastructure. The number of challenges we have, makes infrastructure development something we should give to private sector. We are still at the stage where there are no proper health care. We are still at the stage where power is a challenge, where education is an issue, where so many things require the government’s input. What we need to do is to give it to private sector but the private sector operates when there is rule of law and where there is pursuit of justice. When you bring another airline give him billions of naira to function, have you not been unfair to Medview Airlines? Has it not been unfair to Dana airline? Those who have been there from the start? If you give them the support, they will be great airlines that will be the envy to airlines in the whole of Africa.
You can wake up today and say because you have the money, you say you are building a big airline; you will now be using government money to compete with innocent people, the way GAT has been competing with us with government’s money. We have to labour, sweat, beg, they have the enormous resources. Let the concession be done in accordance to the rule of law. If this is done, the 22 airports can be turned around completely in less than three years. But if it is going to be done with man know man mentally, we will not develop.
What does the lack of respect of the rule of law portend?
Bi-Courtney has tried. I was delivering a lecture after one of the panelist made a statement. He said Donald Trump, with all his might as President of United States bind all the wanted to. One federal high court told him it was unconstitutional and that was it. Within five minutes all the airports in America obeyed it, waiting for an appeal. He went to the court of appeal and lost again. Do you know the power of the President of America? Enhance our judiciary properly and obey the rule of law.