There is no doubt that the Murtala Muhammed Airport Domestic Terminal 2 (MMA2) in Lagos is an exemplary result of public-private partnership (PPP). It was constructed 14 years ago under a Design-Build-Operate-Transfer (DBOT) agreement with the Federal Government, the first major DBOT project of such magnitude in Nigeria.

”There is no airport terminal in Nigeria that has the flow of MMA2 because it was well thought out and designed,” Resort International Limited (RIL) Chairman Dr Wale Babalakin (SAN) observed at the 2019 annual lecture of the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, where he spoke on “Infrastructure Development and Growth in Nigeria: Prospects and Challenges.”

Babalakin’s company, Bi-Courtney Aviation Services Limited (BASL), is the private partner in the partnership and operator of the terminal. It is noteworthy that the company, the reserved bidder, was asked to handle the project after the preferred bidder’s failure to perform.  He said the company achieved a high design standard because the terminal was designed by Nigerian and South African architects.  He deserves credit for his contribution to the country’s infrastructure development. He turned 61 on July 1.

“If we had been allowed to continue, phase two would have been completed 10 years ago and we would have had one of the best Airports in Africa,” he said in his lecture. It is unclear why there was discontinuity, but it is clear that the country would have benefitted from continuity.

The country’s underdevelopment is the result of poor infrastructure development. Babalakin noted in his lecture that infrastructure development “is about serious commitment and a lot of intellectual rigour.” Sadly, it seems these essentials are in short supply in the country’s corridors of power.

Babalakin’s MMA2 success possibly prompted the Federal Government to consider concession arrangements for other airports.  In 2016, the government announced  that it had concession plans for  all the 22 federal airports to enable them to function efficiently and profitably, beginning with the ones in Lagos, Abuja, Port Harcourt and Kano. At the time, he had observed that his company’s “eye-opening effort” encouraged the authorities to pursue concession deals concerning the airports.  Importantly, Minister of Aviation Sirika Hadi in June said concession arrangements for the four airports would be completed by August. It remains to be seen if the standard set by Babalakin would be achieved.

Considering his notable MMA2 achievement, it may well be that the country lost a big infrastructure development opportunity when the Federal Government controversially terminated the 2009 concession agreement with another of his companies, Bi-Courtney Highway Services Limited, for the reconstruction and modernisation of Nigeria’s busiest and most important highway, the Lagos-Ibadan Expressway, under a DBOT agreement. Babalakin said the government “terminated the concession for lack of performance without disclosing to the public that they had held us down for 22 months.”

His company was the preferred bidder under the Umaru Yar’Adua administration, but the Goodluck Jonathan administration terminated the agreement in 2012 after Yar’Adua’s death. Ironically, Jonathan was vice president at the time the agreement was signed.  The public-private partnership was jettisoned and the government awarded the contract for the road project to Julius Berger Plc. and RCC Nigeria Limited.

”It is just a repeat resurfacing of the 1977 road,” Babalakin said in his lecture two years ago.  ”The architecture of that place has changed phenomenally since 1977 and our design accommodated all the changes… Our total cost was N112b. Now, over N350b has been spent on 40% of what we planned to build and they are still at 40%.” It is noteworthy that the road repair is ongoing.  Chairman of the House of Representatives committee on works Abubakar Kabir, in June, during an inspection of roads in Lagos and other parts of the Southwest, said the Federal Government was working towards completing the road rehabilitation project before May 2022.

There is a significant difference between resurfacing the road and modernising it. If his company’s design had been allowed to materialise, the country would have benefitted from the difference.  He explained in an interview last year: “The project on that road included seven overhead bridges… I’m not even sure there is one overhead bridge on the one being built now. Also, our project had proper lay-bys; you didn’t have to buy petrol on the road. You had to go off the road for about one minute where you would find a restaurant, small hotel and all the facilities you would require. We had three of such on each side of the road. We also had a truck bay that could accommodate 12,000 trucks and was expandable because we counted the number of trucks on the road then and they were about 4,000. Now, we are told that they are about 6,000.”

Another project involving Babalakin’s company that shows how the government’s actions ironically contribute to the country’s underdevelopment is the planned redevelopment of the old Federal Secretariat, Ikoyi, Lagos.

Babalakin’s RIL  had paid N7 billion for the property in 2005 after a successful bid, and in October 2006 signed a Development Lease Agreement (DLA) for 99 years with the Federal Government to redevelop the disused Secretariat complex into 480 luxury apartments. But the property lies in ruins 16 years after the agreement because of obstacles created by the Lagos State government which said the Federal Government should have sold the complex to it.

The company went to arbitration against the Federal Government and won. Under the agreement the Federal Government was supposed to be responsible for obtaining a no-objection approval from the Lagos State government, if necessary.  The company was awarded N50 billion as damages in a judgement delivered by the tribunal in December 2015.  The cost awarded has not been paid by the Federal Government, and the Lagos State government has not changed its obstructive position.

Whether it’s an aviation project, a road project or a housing project, Babalakin has encountered government-driven obstacles to his infrastructure development efforts. But the seasoned lawyer-cum-businessman remains a consistent advocate of the public-private partnership approach to development.  Based on his personal experience, he listed the enemies of public-private partnership in Nigeria  at the 2016 Nigerian Economic Summit in Abuja, including the attitude of the government, lack of respect for sanctity of contracts and the rule of law, lack of investor security, corruption and malice.

Notably, Vice President Yemi Osinbajo, in March, at the opening ceremony of a two-day retreat of the National Council on Privatisation (NCP) in Abuja, observed that Nigeria needed public-private partnership arrangements to solve its massive infrastructure deficit because the country required at least $2.3 trillion over the next 30 years to deal with the infrastructure gap which the government alone could not provide.

So Babalakin, a vocal and active champion of public-private partnership, remains relevant to the country’s infrastructure development goals. The pathfinder is still needed to find paths.

SOURCE: THE NATION

The concession agreement will run for 10 years.

It is not surprising that rail transportation is the latest major sector the Federal Government will invite private sector participation, going by the clamour by informed commentators and other stakeholders before the PPP arrangement.
With the Kaduna – Abuja road taken over by bandits and kidnappers, the rail route has become the most viable option not only for the lower and the middle class, but also for the high and the mighty for the safety it assures. As a result of the upsurge of the number of passengers, however, some unscrupulous staff of NRC have formed alliance with touts to buy up tickets to re-sell at exorbitant rates to hapless passengers.

Private sector participation in Nigeria’s critical infrastructure sector is of urgent necessity, but crux of the matter is how the Federal Government (FG) and other tiers of government can generate enough goodwill to get willing participants.
This is because of the way successive administrations treated the private sector players who in the past responded to the clarion calls to bridge the infrastructure deficits in the country.

Frustration has been the recurring experience of many of such private infrastructure investors in the different sectors such as aviation, road construction, housing, power, among others, more as a result of policy summersaults by the different administrations.

A major case in point is the Lagos- Ibadan expressway which the Wale Babalakin owned Bi-Courtney Consortium was granted a 25-year concession on May 8, 2009 by the administration of the late President Umaru Yar’Adua under a Design, Build, Operate and Transfer (DBOT) agreement.

The concession was terminated by the succeeding administration of former President Goodluck Jonathan on November 19, 2012 and the road project handed over to Julius Berger Plc and RCC Nigeria Limited.

Before the termination, Bi-Courtney Highways Services Limited (BCHS) had awarded the contract and completed arrangement to turn the Lagos Ibadan Expressway into a world class standard at a cost of N112 billion.

Years after it should have been completed by the concessionaire, the road remains a nightmare to commuters even after gulping multiples of the original cost.

Speaking at the 2019 Annual lecture of the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos with the theme, “Infrastructure Development and Growth in Nigeria: Prospect and Challenges”, Babalakin, Chairman of Resort International Limited, parent company of Bi-Courtney said, “Lagos-Ibadan express way is unthinkable. We signed a contract in 2009 and we had a team of 35 foreigners, making 50. When we finished the design, we sent it to the Ministry for approval.”
He said Bi-Courtney waited for 22 months to get feedback from the ministry and this never came, explaining that “Finally, on the 23 months, the project was terminated because of lack of performance. We did a review of the contract on advice and concluded that, once we harness with international standard, funding is ready.

“This is the seventh year the project was terminated. The construction project is still between 35-40 per cent done and they are building 40 per cent of what we are building. The project has no design and it is a repeat to surfacing of 1977 road.
“The architecture of Lagos-Ibadan express way has changed phenomenally from 1977. Our design accommodated all changes. We had seven overhead bridges along the express road.”

The Bi-Courtney Chairman pointed out that there is no projection for any overhead bridge right now on Lagos-Ibadan expressway by the two contractors handling the project and said, “Our total cost was N112 billion. Over N350 billion has been spent on 40 per cent of what we planned to build and they are still at 40 per cent.”
The experience of Babalakin in the provision of infrastructure in the aviation sector has not been hitch-free, though a little bit better.

The Murtala Muhammed Airport, Lagos, Terminal 2 (MMA2), being operated also on DBOT basis by his firm, Bi-Courtney Aviation Services Limited (BASL) is the first of its kind in Africa in addition to being adjudged the best terminal in Nigeria.
Yet, the Federal Government and its agencies which should give MMA2 every support it needs in order to encourage more private sector participation in infrastructure development have been all out to hamstring the terminal operator.
Dr. Babalakin said this much at a press conference in 2017 to commemorate the 10th anniversary of MMA2.

He disclosed that the Federal Government and the Federal Airports Authority of Nigeria (FAAN) have failed to pay the damages the court awarded against them for the continuous running of illegal flight services at the General Aviation Terminal (GAT), Lagos, contrary to the concession agreement with BASL.
He said “We are seeking the assistance of all and sundry for the payment of the N200 billion owed to Bi-Courtney Services by the Federal Government of Nigeria. As far back as 2012, the Federal High Court awarded damages of N132 billion to Bi-Courtney.

“Six appeals against the judgment in the Court of Appeal have been dismissed. Even the appeal to the Supreme Court by Arik Airlines through Ojemaie Holdings was also dismissed. No nation can truly achieve its potential if it treats its dynamic citizens this way.”

Late last year during the Public Hearings of the Senate and House of Representatives Committees on Aviation held on the amendment of the Civil Aviation Amendment Bills of the six aviation agencies, including the Nigeria Civil Aviation Authority ( NCAA), Federal Airports Authority of Nigeria ( FAAN), Nigerian Airspace Management Agency ( NAMA), Nigerian College of Aviation Technology ( NCAT), Accident Investigation Bureau (AIB) and Nigeria Meteorological Agency (NiMET), Babalakin again raised complaints about unfair treatments by the Federal Government and FAAN.

The Federal Government is not the only culprit in discouraging private sector participation in the provision of infrastructure, while complaining that they cannot provide all the needs and soliciting for the bridging of the gaps by private investors.
Many states of the federation are equally guilty as was the case of Lagos State which has made it impossible for old Federal Secretariat, Ikoyi, Lagos to be put to proper use by the concessionaire, Resort International Limited.

Built in 1976, the 15-storey old Federal Secretariat Complex was in use by Federal Civil Servants until 1991 when the seat of the Federal Government moved to Abuja. It subsequently became abandoned until 2006 when the administration of former president Olusegun Obasanjo concessioned it to Resort International Limited for N7.2 billion after a rigorous open competitive bid which involved many companies, including Dangote Group.

After the signing of the concession agreement and payment, Babalakin set to actualize his dream of turning the complex into a high rise housing complex of about 480 housing units of four, three and two bedroom flats in order to bridge the housing deficit in Lagos.

This is however yet to materialize as the Lagos State Government, which did not raise any objection during the bidding process suddenly opposed the idea of converting the complex from its original function to a residential area. It also argued that the Certificate of Occupancy (C of O) ought to have reverted to it once the reason for its take-over by the FG ceased to exist.
The state government also obtained a court injunction barring anyone from carrying out any further activity within the complex, thus throwing spanners into the whole process and leaving as an eyesore what used to be a symbol of grandeur, apart from the economic losses to the private investor.

The experience of Babalakin is shared by many other private investors in Nigeria and observers are of the view that the nation’s quest to catch up in the race for infrastructural adequacy will continue to be a mirage if governments at all tiers continue to make the environment harsh for the private sector.

upgrading of its X-ray machine and air conditioning systems for passengers safety, security and comfort.
The Wale Babalakin Bi-Courtney Aviation Services (BASL) operated MMA2, Lagos, has just spent about $500,000 importing a sizeable number of X-ray machines to enhance and accelerate the screening of passengers and cargoes, according to a press statement by Mikail Mumuni, Group Corporate Affairs Manager of BASL.
Mr Mumuni added that “massive resources are also being deployed to upgrade our air conditioning system for the comfort of passengers as we always treat our customers as Kings and Queens.”
The BASL spokesman said the ongoing upgrading of the facilities is part of the company’s determination to continue to give Nigeria the best airport terminal that is comparable to those available in the developed economies.
“To satisfy our customers, we had to buy 50% of the money required for the importation of the X-ray machines from the parallel market as the Central Bank of Nigeria (CBN) was only able to allocate 50% to us. This, when added to the amount spent on the air conditioners, is a huge investment on our part, especially at this pandemic period when businesses are at low ebb and considering the fact that BASL is not a beneficiary of the Federal Government’s COVID-19 Palliatives to the aviation sector,” he said.
Bi-Courtney Limited was granted a concession by the Federal Government of Nigeria (FGN) to design, build and operate MMA2. The company is required to under the concession agreement to transfer MMA2 to the FGN after 36 years of operation. MMA2 was constructed and completed within the schedule, a rare feat in Nigeria’s aviation industry and the terminal has been adjudged the best in the country by both the private and public stakeholders.
Signed.
Mikail A. Mumuni
Group Corporate Affairs Manager

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