FAAN /MAEVIS DEAL:PUBLIC OR CORPORATE INTEREST

FAAN/MAEVIS DEAL: PUBLIC OR CORPORATE INTEREST ?

The commando takeover of MAEVIS facilities and forceful termination of the agreement despite having a restraining court order is a tragic Nollywood presentation that will surely damage our reputation in the international investors’ forum.

In my article titled “The Rumored Cancellation”, written and published sometime in the first quarter of 2011, I advised both parties to seek re-negotiation rather than cancellation, because that option usually leads to prolonged litigation, freezing of bank accounts and assets as witnessed in the past.

It started with Pan Africa Express, Sanderton a while ago, Nigeria Aviation Handling Company (NAHCO) thereafter and now MAEVIS, the current victim. Going by the press briefing of FAAN MD, they are already preparing to bulldoze other organisations based on the principle of sub-optimal agreement given as bazaar by the Federal Government through its appointees in FAAN and the Ministry.
The MD of FAAN has also forwarded the MAEVIS file to EFCC and ICPC, I sincerely hope the names of the FAAN MD, Director of Commercial, Head Legal and the Minister’s SA at that time were attached to the petition. These people and their backers in the ministry turned a blind to anti public enhancement fee that is principally used for settling the “settlables”.

Going down memory lane, in 1993 NAHCO, FAAN and Spring Fountain the purveyor of MAEVIS were to jointly start a domestic handling company, but after making necessary financial contributions, the deal fell flat and refunds were demanded in a typical Nigerian ding-dong movement between the parties.

NAHCO again under Musa Agboneni, Chris Hassan and AGM Ops Mr. Olu Afolabi sometime in 1995 introduced computerised handling and check-in procedure at MMIA. In their quest to improve and update the facilities, they got a technical partner NATHECH and a North American company ARNIC Systems to assist and ensure the mission is accomplished.
NAHCO invited FAAN and SAHCOL (the latter had her vision blinded by the ill fated Nigeria Airways at that period in time) to come on board with requisite moral and financial contributions. These organisations failed to catch the vision and consequently backed out.

NAHCO in 2003, went ahead to provide the Airport Operations Management System, investing a lot of funds, while also refurbishing all the check-in counters at the MMIA. Their request to include the flight information display system (FIDS) was flatly turned down by FAAN.

Later, SAHCOL became an independent entity with a clear vision of participating and competing in the provision of ground handling services. They petitioned the ministry, alleging that NAHCO was being favoured and given undue advantage at the MMIA.

NAHCO responded by purchasing additional equipment worth $360,000 to enable SAHCOL key into the programme seamlessly. When SAHCOL was asked to pay, they backed out of the deal, again. Thereafter NAHCO went ahead with the processes and system unperturbed, though with a major hitch, the exclusion of non NAHCO passengers.

In 2007, the agreement with MAEVIS was signed to the surprise of industry watchers because MAEVIS won the deal over and above other experienced organisations that applied for the contract; organisations such as SITA, NAHCO-ARNIC etc.

The Company went to work investing and providing services that improved facilitation for passengers and airlines, while also capturing and generating revenue for FAAN before the bubble burst in 2010.

It has been a cat and mouse game ever since, MAEVIS was charging $1.40cent per passenger and the contentious 35% enhancement fee from revenue generated, SITA will be charging the same $1.40cent without enhancement, which is a better deal, while NAHCO was charging below $1 per passenger for the same services.

The MAEVIS/FAAN case is in court. While watching the drama in the legal and public opinion court, we need to be reminded that the equipment NAHCO used before they were forced to move out for the MAEVIS deal are still lying somewhere in the same airport that MAEVIS equipment are lying in right now. Peradventure, SITA’s equipment suffers the same fate this will increase the computerised carcass inventory at MMIA.

Questions that keep recurring in our PPP or is it concession agreements are: Why do we make the same mistake always? How did SITA win this contract? Was it through an open and transparent bidding process? Did SITA deal with FAAN directly, or through their agents which may have hiked the total cost of the deal? When will the toothless Infrastructure Concession Regulatory Commission be able to bark and bite?

MAEVIS was absolutely right in saying enhancement fee was entrenched in most FAAN domiciled concession agreements, so the MD FAAN must also be perfectly right to have promised to review those sub-optimal agreements and for boldly aligning with public interest in contrast to MAEVIS’ position of aligning with corporate interest, which must have necessitated their refusal to renegotiate or is it resort to legal delay tactics.

When the legal processes are completed, I sincerely hope the BASA fund designated for critical safety and infrastructural projects, which is being diverted to offset Government liabilities of late will be sufficient enough to clear liabilities arising from sub optimum agreements.
Concession is the way forward and must be accompanied by transparent, robust and independent economic regulations supported by effective industry consultations.

This is what the concessionaire and concessionee in this soap opera lacked from the beginning when they started their romance in 1993, they should look back and ensure the problem is settled amicably considering MAEVIS have invested a lot resources.