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ADDRESS BY HIS EXCELLENCY, SENATOR, DR IFEANYI OKOWA, GOVERNOR OF DELTA STATE, AT THE SIGNING CEREMONY OF THE CONCESSION AGREEMENT FOR ASABA INTERNATIONAL AIRPORT WITH FDIC/MENZES CONSORTIUM ON TUESDAY, FEBRUARY 23, 2021, AT THE ASABA INTERNATIONAL AIRPORT.
It is my pleasure to welcome you all to this signing ceremony.
- My joy knows no bounds as we make another breakthrough in our goal to transform Asaba International Airport into a regional economic hub in line with the vision establishing it.
- 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 Asaba Airport for the Delta State Government.
- As we may be aware, this airport was conceived and built by the previous administration of Dr. Emmanuel Uduaghan, CON, 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. That meant the airport could only accommodate smaller aircraft such as the Q400 and DASH 8. In the face of an economic recession at the time, we were confronted both with the challenge of upturning the downgrade and turning the airport into a model economic platform that is self-sustaining through a robust public/private partnership.
- This administration had to fully rehabilitate/reconstruct the runway, taxiway and other ancillary works, complete the perimeter fence, and evacuate 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 addition, this administration completed the installation of the Instrument Landing System and the Airfield Ground Lighting System. As a result, the airport can now handle night operations; in the last two months, the airport has operated several night flights as approved by the NCAA and the Nigeria Airspace Management Agency (NAMA).
- I am happy to report that the airport now has a medical centre. The Firefighting Station has been completed while the Watchtower for firefighters is 80% ready. Meanwhile, the previously unserviceable Automatic Weather Observation System and the Low-Level Wind Shear Alert System have been repaired and are functioning, improving the overall safety of the airport. This assurance of safety and the attractive nature of the route has continued to attract new airlines to the Asaba International Airport.
- Moving forward, we chose concession as the most viable option for the airport to be run more professionally, efficiently, and profitably for the overall good of the State. The Project Steering Committee invited bids for a Transaction Adviser to guide the State Government and manage the process. Bids were received from 14 consortia, and after a rigorous selection process, Halcrow Infrastructure Consortium was appointed and approved by the State Executive Council for appointment as Transaction Advisers for the Concession of Asaba International Airport. For those who may not know, Halcrow Infrastructure Group is a multinational infrastructure consultancy firm with global pedigree.
- Sequel to the successful development and presentation of the airport Master Plan by this administration as requested by the Transaction Adviser, the State Government in April 2019 solicited for bidders with proven track record in the aviation sector.
- Bids were received from First Investment Development Company (FIDC)-MENZIES Aviation (MA) Consortium with the following as members;
- First Investment Development Company Limited
- Menzies Aviation Plc
- Air Peace Limited
- Cybernetics International Services Limited
- Rainoil Limited
- Radisson Blu Hotels
- Quorum Aviation Limited
- Arbico Plc
- Sibraxis EEIG of Greece
- The second bidder was the Asaba International Airport Development Consortium, a blend of international aviation experts and experienced local partners, created solely for the development and operation of Asaba International Airport, with the following as members:
- AI-MS Aviation Infrastructure Management Systems GmbH of Austria
- AMD SIGMA GMBH of Austria
- AIRIC Aviation Infrastructure Research Innovation Centre
ANET Technologies Ltd.
- After a thorough and rigorous review/analysis of the bids by a separate committee headed by the Secretary to the State Government, the First Investment/Menzes Consortium was the preferred bidder, having provided demonstrable capacity to meet all the requirements of the Master Plan while also outlining their financial commitment and injection of new investments.
- It is their duty to manage the airport and develop the various strategic business units in the form of;
• Cargo Business and the development of the Cargo Terminal
• Development of the Logistics Hub and Cargo Warehouses
• The operation and management of the Tank Farm
• The development and management of the Business Park
• The development and management of the Hotel and Convention Centre
• An Airline operating out of Asaba International Airport as an Operational Hub
• Aircraft Maintenance, Repair and Overhaul (MRO) facility
- The concession shall be for an initial period of thirty years with the following terms as approved by the Delta State Executive Council and the Delta State House of Assembly.
i. Naming of the Airport: The name of the Airport shall remain Asaba International Airport. However, the Concessionaire, upon discussion with the State, can include tagline to the existing Airport name for the purpose of branding.
ii. Competing Airport: There shall not be any publicly or privately-owned new airport, whether greenfield developments or expansions in Delta North Senatorial District of Delta State, during the concession period.
iii. Employment of Deltans: The Concessionaire shall at all times be under an obligation to maintain an employment ratio of twenty percent (20%) of its staff for the operation of the Airport comprising indigenes of Delta State;
iv. Mandatory Capital Projects; The Concessionaire shall undertake the development of Mandatory Capital Projects, and they shall be completed within a period of three (3) years from the effective date of the transaction. The Mandatory Capital Projects include Airport/Terminal Facility, Cargo Facility, Maintenance, Repair and Operations (MRO) Facility, Tank Farm Facility, Industrial Park and Office Facility, and Hotel and Conference Facility.
v. Concessionaire Obligation: The Concessionaire shall be responsible for the management, operation and maintenance of the airport, keeping it in good operating repair and condition throughout the concession period at its own cost and risk, and in accordance with Prudent Industry Practice and the provisions of the Agreement.
vi. Exemption of Payment of Tax: The Concessionaire shall be exempted from the payment of some specific taxes to the State for a period of five (5) years, to enable it concentrate on the development of the mandatory capital projects as listed above;
vii. Rights of Inspection of the Airport Facilities: The State and its representatives, with a written notice to the Concessionaire, no less than seven (7) days prior to visit, can undertake the inspection of the airport facilities to ascertain compliance with the terms of agreement.
viii. Project Delivery Oversight Committee (PDOC): A Project Delivery Oversight Committee comprising representatives of the State and the Concessionaire shall be constituted to ensure the implementation of the terms of the agreement.
ix. Terms of the Concession: 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.
x. Insurance Policy: The Concessionaire shall purchase and maintain in full force and effect any and all of the insurances required for the operation of the airport.
xi. Royalty Fee: The Concessionaire shall pay to the State a royalty fee of 2.5% of the annual Earnings Before Interest, Taxes, Depreciation, and Amortization.
xii. Annual Fee: The Concessionaire shall pay to the State an annual fee of One hundred-million-naira (N100,000,000.00) each year during the concession period, with 10% escalation every five (5) years of the concession period.
xiii. Upfront Fee: The Concessionaire shall pay to the State an upfront fee of N1b only on or before close of business on the 15th day following the signing of this agreement.
- My good people of Delta State, with over N28b 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.
- I thank the Project Steering Committee and the Committee that analysed the bids, for a job well done. My deep appreciation also goes to the Transaction Advisers for their patience and commitment to guide us through the entire process. I also express my profound gratitude to the First Investment/Menzes Consortium for believing in this project, which is the first Brownfield Airport Concession in Nigeria, and possibly Africa.
- In concluding this address, I am happy to announce that based on my personal intervention on the Osubi Airport closure, the Federal Airports Authority has made a commitment to resume operations at the airport within two weeks. I am relieved that the hardship which the closure had inflicted on our people and businesses is about to end. We will work closely with FAAN to ensure that the target date is met. In fact, I am pleased that the authority’s General Manager, Operations, Mrs Olajumoke Oni, is here with us.
- The State Government is supporting the resumption process with some logistics, particularly in the area of covid-19 protocols, even though the airport is not our property. Furthermore, we have had fruitful discussions with the management of United Nigeria Airways to commence full operation on that route immediately it is reopened and they have assured us of their readiness to do so. It is my earnest hope and expectation that other airlines will follow suit.
- Thank you all for your time and attention.
- God bless Delta State.
- God bless us all.
Office of the Governor