Okowa under Fire for Giving Away ₦40 billion Asaba International Airport for ₦4 billion

Asaba International Airport Photo
Asaba International Airport

Outrage and scathing criticisms have trailed Wednesday’s concessioning exercise of the ₦40 billion Asaba International Airport by the Delta State government to a Consortium, Asaba Airport Company Ltd. The concession is for a 30-year period and would fetch the government ₦4 billion. The Asaba International Airport was one of the legacy projects of the immediate past Emmanuel Uduaghan administration. It was initiated, built and made functional by the former governor.

It however ran into a hitch in the twilight of the administration when it was down-graded by the Nigerian Civil Aviation Authority (NCAA) with the lot falling on the new administration to do the needful. While Uduaghan was conspicuously absent at the epochal event, his contribution was however acknowledged by the governor in his speech. Asked why the former governor was not present to witness the ceremony, one of his close associates told the magazine that “he was not invited. Of course if he was invited, he would gladly have honoured the invitation because whether anybody likes it or not, the history of the airport cannot be written without a generous chapter dedicated to him. But he was not given that honour and you don’t expect him to force himself there”.

According to the source, “what Governor Okowa did was what Dr. Uduaghan would have done – concession it – because government is not a good manager of business. It would die in no time. But maybe he would have handled it differently”. Recall that the decision to concession the airport for 30 years was approved by the State Executive Council at its October 14, 2020 meeting presided over by Governor Okowa.

However, Okowa, who unfolded the terms of the concession, said at the agreement signing ceremony which took place at the airport, that the “Terms of the concession are that the assets and all infrastructure constructed by the Concessionaire, together with all related investments in, and upgrades to the assets, shall be handed back to the State at the end of the concession period. The concessionaire shall purchase and maintain in full force and effect any and all of the insurances required for the operation of the airport”.

According to the governor, “The concessionaire shall pay to the state a royalty fee of 2.5 per cent of the annual earnings before interest, taxes, depreciation, and amortization. The concessionaire shall pay to the state an annual fee of ₦100 million each year during the concession period, with 10 per cent escalation every five years of the concession period. The concessionaire shall pay to the state an upfront fee of ₦1 billion only on or before close of business on the 15th day following the signing of this agreement”.

He said “with over ₦28b expected to be pumped into the airport development by the Consortium over the concession period, the benefits to the State in terms of employment generation, economic growth, urban renewal, and tourism potentials are enormous”.
Going down memory lane, Governor Okowa stated that “The journey to today’s ceremony began in November 2015 when I set up a Project Steering Committee headed by my Senior Policy Adviser with the mandate to shop for a consortium of Concessionaire Operators /Investors with the technical and financial capabilities to redevelop, finance, design, operate, maintain and manage the airport.
“As we may be aware, this airport was conceived and built by the previous administration of Dr. Emmanuel Uduaghan, not only as a passenger airport but one that will tap the vast economic potentials accruable from the proximity to the eastern commercial cities of Onitsha and Nnewi and be a hub for export of agricultural and manufactured goods.

“Unfortunately, the vision suffered a major setback when the airport was downgraded to a Category 3 airport by the Nigerian Civil Aviation Authority (NCAA) just few months before my administration came into being. This administration had to fully rehabilitate, reconstruct the runway, taxiway and other ancillary works, completed the perimeter fence, and evacuated the hill beside the airport for the provision of obstacle-free zone for the runway as demanded by the regulatory authority. Subsequently, the airport was upgraded to Category 6, which enables aircraft as large as the Boeing 737 to land”.

In a remark, the Consortium Chairman, Adebisi Adebutu, scion of the wealthy Kesington Adebukunola Adebutu (Baba Ijebu) family, who expressed gladness that FIDC emerged the preferred bidder, thanked the government for giving his firm the opportunity to run the airport. The Asaba Airport Company Limited, has technical partners as sub-concessionaires. They are Air Peace as the Anchor Airline and MRO operator; Multifreight Cargo and Logistics for the cargo and logistics centre; Arbico Construction Company to build the Business Park, Hotel and Convention Centre; Rainoil Limited, and Cybernetic Limited to develop the Tank Farm and provide aviation fuel; and Quorum Aviation Limited to develop the private jet and Helicopter Terminal of the airport.

Adebutu pledged the consortium’s resolve to abide by the term of agreement to upgrade the airport to international standards and best in Africa in few years from today.
However, it had been all knocks for the governor, especially on social media, over the process and terms of the concessioning with many describing it as questionable and outrageous. The anger amongst Deltans, even within the governor’s party, the Peoples Democratic Party, is that the exercise was shrouded in secrecy and the airport was privatized on terms that short-changed the state and the people. Some argued that the 30 years concession period was too long.

The major opposition party in the state also joined the fray, describing the exercise as a fraud. In a statement on Thursday in Asaba by its publicity secretary, Sylvester Imonina, the All Progressives Congress, APC said while it agreed that the government had no business in business, “Unfortunately, the fraud called concessionaire of Asaba Airport will go down in history as the greatest bleak, shady business and economic coup against Deltans”. According to the party, “It is an affront to common sense that an airport business, wherein more than ₦40 billion was invested, was concessioned for ₦4 billion, and to yield ₦100 million annually because of vested interests’’.

The APC expressed shock that there was no advertisement, or adequate information on plans by the government to concession the airport. It challenged the State Government to put in the public domain all that transpired about the concession of the airport. “Also, the government should show to Deltans the corporate bodies that partook in the exercise and how much each of them bided. We call on Deltans and all people of goodwill to kick against this obvious shenanigans called concession of Asaba Airport”.

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