Concession: FAAN’s revenue may hit N70 bn yearly

The Federal Airports Authority of Nigeria (FAAN) could raise its revenue base to over N70 billion per annum if the major airports are transparently concessioned, experts have said.
The experts, who backed the Federal Government’s policy, told that the concession would help to block loopholes, adding that FAAN can increase its annual revenues from the present N45 billion to about N70 billion.
Aviation security consultant and former Commandant, Murtala Muhammed Airport, Group Capt. John Ojikutu (Rtd), said although FAAN generates a lot of revenue, but lamented that most of it are lost through deliberately created loopholes.
The Federal Government had penultimate week given its consent to the privatisation of many of the country’s aerodromes, saying it had no funds to run them anymore.
The announcement led to protest by aviation workers who vowed to resist the implementation of the policy.
But stakeholders warned that Nigeria’s dream of building a world-class air transport hub in West Africa may never be achieved unless the Federal Government musters the necessary political will to actualise the planned concession of two of its prime airports in Lagos and Abuja to private sector firms
Chris Aligbe and Olu Ohunayo of the Aviation Round Table (ART), in separate interviews, said that government’s stronghold on the two airports through FAAN has failed to boost the state of their infrastructure to levels that either befit the status of the country or help to unlock its full potential as West Africa’s aviation hub to attract foreign direct investments into the sector and create jobs for citizens.
Ojikutu said figures available to him shows FAAN’s IGR could be more than what is presently put out to the public, stressing that concession would lead to a more efficient way of revenue generation and transparency by the concessionaires.
Sources close to the agency said that currently, FAAN earns about N2 billion from aeronautical sources and N3.5 billion from non-aeronautical sources monthly from the Murtala Muhammed International Airport, Lagos.
This amounts to N30 billion annually and N15 billion annually from other airports in the country, which represents a total amount of N45 billion per annum.
This amount, a source told this newspaper, can increase to N70 billion if strict measures are put in place to block all loopholes.
These measures include the automation of every process that generates revenues for the agency in all the airports under its management.
“First, the would-be concessionare would have to capture the data of revenue potential, which will determine the amount of revenues to expect; it will have to ensure that there is transparency, which means that every amount of money generated is captured; then it will have to streamline all its activities so that at a glance everyone will have the picture of what is generated,” an inside source said.
Besides, the source said that FAAN has a burden of too many personnel, including hangers-on, who are workers who do not have definite responsibility, but are paid monthly salary by the agency.
“There is also the challenge of inefficiency. Many people in FAAN abdicate their responsibility because duties were not tailored to particular individuals; there are too many people, so the human capacity is not optimised and they are not working in a sustainable friendly environment. Then there is this culture of lackadaisical disposition of those who work in government parastatals. They lack the drive, which is obtained in private sector work environment,” the source noted.
On the non-aeronautical revenue sources, the source said the new managers should exploit the establishment of hospitality facilities such as hotels, duty free shops and advertising.
“If you look at the Murtala Muhammed Airport (MMA2) it has been recording 24 per cent growth annually, so the concessionaires should have policy road map to grow the airports. It has to optimise its aeronautical sources; it now has to be creative to boost its non-aeronautical revenue sources.
Wole Shadare