The Federal Government said it will generate about $800 million from the concession of the Nnamdi Azikiwe International Airport, Abuja, and the Mallam Aminu Kano International Airport, Kano.
This was made known by the Minister of Aviation, Hadi Sirika, while speaking to journalists after the weekly Federal Executive Council (FEC) presided over by President Muhammadu Buhari on Wednesday, May 17, 2023.
Sirika had announced that FEC approved the concession of the Abuja airport for 20 years, while the international airport in Kano will be concessioned for 30 years by Corporación America Airports.
Sirika also said the approval was part of the ministry’s roadmap aimed at putting the nation’s assets under concession rather than privatisation.
He noted that the concession would generate $797.4 million (N368.8 billion) as fees and taxes from the concessionaire.
What the Aviation Minister is saying
- Sirika said, “Put together, it is about $800 million. And this is equal to the amount of money that we borrowed to build those four airports.
- “The consortium that won the bid is 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.”
Breakdown of fees, taxes payable to FG
Speaking further on revenue expected from the deal, Sirika gave a breakdown of the amounts payable to the government as fees and taxes.
- He said, “The concession fees or upfront fees for Abuja is $7 million while $1.5 million will be given for Kano. The fixed concession fee is $401.2 million for Abuja and the fixed fees for Kano is $21 million.
- “The variable costs concession fee is $154 million for Abuja and $26.9 million for Kano. Tax $111.2 million for Abuja and $42.7 million for Kano. The Infrastructure Concession Regulatory Commission (ICRC) supervision fees for Abuja is $16.4 million and $5.3 million for Kano.
- “So, the total amount of money that is accruing to the government is $700 million for Abuja and then $97.4 million for Kano.”
The aviation minister also said the aforementioned fees are different from the direct fees the Federal Airports Authority of Nigeria (FAAN) would continue to earn from passenger service charges, which is projected to be $4 billion (N1.84 trillion).
In case you missed it
- Nairametrics earlier reported that FEC approved the concession of the Nnamdi Azikiwe International Airport, Abuja, and the Mallam Aminu Kano International Airport, Kano for 20 years and 30 years respectively.
- The Federal Government is currently involved in a legal battle with aviation unions over the airport concessions, with the government assuring that the concessions will not lead to job losses.
- Sirika also stated that the council also approved the ministry’s change of name from the Federal Ministry of Aviation to the Ministry of Aviation and Aerospace of Nigeria.