Chinese Firm to Run Airports

Chinese Firm to Run Airports

Aviation Minister Stella Oduah is seeking presidential approval to hand over the management of airports infrastructure to a Chinese firm.

Chinese Firm to Run Airports

In an April 4 memo to President Goodluck Jonathan, titled "Proposed management structure for international airports and perishable terminal in Nigeria," Mrs Oduah made the case for the Chinese takeover.

In another memo, also of April 4, the minister informed the Presidency about the registration of "Nigeria 1 Aviation Limited" as Nigeria's national carrier.

The minister identified Fraport AG Airport Services Worldwide ("FRAPORT") a Chinese firm, which it described as a reputable international airport operator, as the preferred contractor.

But, according to sources, due process was not followed before "Madam Minister unilaterally decided to give the job to Fraport AG".

The memo said that the Ministry of Aviation has already entered into a Memorandum of Understanding (MoU) with FRAPORT for potential cooperation in airport operations, management and development of airport related services.

The minister noted: "In addition to the on-going airport remodeling and reconstruction, Government recently entered into agreement with Chinese investors for the construction of state-of-the-art terminals at the four major international airports in Nigeria."

The MoU, according to the minister, was signed because of the need "to guarantee the proper maintenance of the remodelled and new airport terminals and facilities to the highest international standards, in order to safeguard government’s investments in the airport infrastructure as well as ensure the sustainability of government's effort at transforming the sector."

Besides the ministry's MoU with FRAPORT "for potential cooperation in airport operations, management and development of airport related services, FRAPORT is to consider training Federal Airports Authorit of Nigeria (FAAN) employees" to deepen local capacity and ensure on-the-job transfer of management expertise in a through and sustainable manner.

The memo said: "It is proposed that FRAPORT will provide its services in collaboration with local private companies to further ensure the effective transfer of their specialist management skills, work ethics and technology to capable Nigerians firms.

"It is also proposed that FRAPORT will receive management fees as a negotiated percentage of revenue derived from the airports and terminals under management. All other terms of their engagement will be contained in a carefully negotiated management contract, with the expectation that in the not too distant future our local Nigerian companies and expertly re-trained FAAN staff will eventually take over management of our airport facilities to same international standards set by FRAPORT."

The memo on registration of a national carrier is titled "implementing the establishment of a Nigeria national carrier (passenger and cargo)."

Nigeria 1 Aviation Limited is described as the vehicle for realising the dreams and aspirations of the Nigerian people for establishing a national carrier.

The memo said its shares are held in trust.

Among other benefits, it said that Nigeria 1 Aviation Limited would ensure sustainable transparency, good corporate governance and accountability in running a national carrier.

These, it said, would eliminate the factors that led to the demise of Nigerian Airways and arrest the dominance of foreign airlines on Nigerian routes and its attendant capital flight, estimated at over N300 billion per annum.

It said that Nigeria 1 Aviation Limited would enable Nigeria reciprocal equitably on the BASA routes, enhance the development of Abuja/Lagos as regional air transport hubs and strengthen the Nigerian aviation sector to play the expected pivotal role in national economic development.

It said that Nigeria 1 Aviation Limited would create up to 100,000 additional direct and indirect jobs and enhance the rapid development of national aerotropolis projects.

It said that the ministry had engaged renowned consultants PriceWaterhouseCoopers to work with identified private sector investors, with a mandate of ensuring the launch of Nigeria 1 Aviation Limited not later than the third quarter of 2013.

"I am pleased to report that the Federal Ministry of Aviation is on track to achieve the projected launch date," it said.

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