Abuja, Kano Airport Concession to Generate $800m Revenue – FG
The Federal Government of Nigeria has approved the concession of the Nnamdi Azikiwe International Airport, Abuja and the Mallam Aminu Kano International Airport, Kano for 20 and 30 years, respectively.
This came as the Federal Government looks to generate $797.4m (N368.8bn) as concession fees and taxes from the concessionaire, Corporación America Airports.
“Put together it is about $800m. And this is equal to the amount of money that we borrowed to build those four airports,” the Minister of Aviation, Hadi Sirika, told State House correspondents after this week’s Federal Executive Council meeting presided over by the President Muhammadu Buhari, at the Aso Rock Villa.
Sirika said Wednesday’s approval was part of the ministry’s roadmap aimed at putting the the nation’s assets under concession rather than privatisation.
He explained, “It is a concession of the Nnamdi Azikiwe International Airport and the Mallam Aminu Kano International Airport. The consortium that won the bid are Mssr Corporación America Airports consortium and in the consortium, they have Mssr Mota-Engil Africa and Mssr Mota-Engil Nigeria and this is through a PPP and it’s for 20 years for Abuja and 30 years for Kano.”
On the amounts payable to the government as fees and taxes, he said “The concession fees or upfront fees is $7m for Abuja and $1.5m to be given for Kano. Fixed concession fee is $401.2m for Abuja and fixed fees for Kano is $21m.
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“The variable costs concession fee is $154m for Abuja and $26.9m for Kano. Tax $111.2m for Abuja and $42.7m for Kano. The ICRC’s supervision fees is $16.4m for Abuja and $5.3m for Kano.
“So the total amount of money that is accruing to government is $700m for Abuja and then $97.4m for Kano. Put together, it is about $800m. This is equal to the amount of money that we borrowed to build those four airports.”
Sirika explained that the aforementioned fees are different from the direct fees the Federal Airports Authority of Nigeria would continue to earn from passenger service charge, which is projected to be $4bn (N1.84tn).
Sirika also announced the renaming the Ministry of Aviation to align with the practices of “future aviation” which now incorporates space exploration.
He added, “So the ministry will be called the Ministry of Aviation and Aerospace of Nigeria. If you look at what is happening in future aviation, as they call them, see what is happening with Elon Musk and Richard Branson. You can go to space now, have lunch and come back. So aviation and aerospace are now together and intertwined.
“It’s important that we become proactive and set our policies to be in tandem with what is obviously coming.
