MMA2: Senate C’ttee Berates FG for Failure to Honour Agreements

Chinedu Eze

The Senate Committee on Privatisation monday berated the federal government for its failure to honour agreement it entered into when it concessioned the domestic terminal of the Murtala Muhammed International Airport, Lagos, known as MMA2 to Bi-Courtney Aviation Services Limited (BASL).

The concession agreement, which was reached in 2006, stated that BASL would build a new terminal after the old one was consumed by fire and it would be done on build operate and transfer (BOT) arrangement with the terminal operating as the only domestic facility in Lagos State and also allows the company to operate regional services.
The Senate Committee on Privatisation spoke with journalists after inspecting the facility and noted that it was grossly underutilised.

The Chairman of the Committee, Senator Ben Murray Bruce, excoriated the government and its agency, the Federal Airports Authority of Nigeria (FAAN) for not abiding by the agreement; rather it established another domestic terminal, known MMA1 or General Aviation Terminal (GAT) to compete with MMA2 and also refused to allow the BASL facility to operate regional services.

Bruce threatened that the Senate would summon the Minister of Transportation to come and explain the problem with MMA2 concession and said no other concession of the airport facilities would be done until the agreement government had with BASL was honoured.

Bruce noted that it is the responsibility of any government to honour any agreement it entered into but if later it finds that such agreement was done against its interest it should prosecute the lawyers and others who signed such agreement on behalf of government, stressing that reneging on such agreement damages the image of the country and discourages the private sector from investing in government businesses.

So the committee emphasised that even if the agreement was later found to be inimical to the interest of the government it should still obey such agreement and punish those who signed on behalf of government.

He cited example with the agreement Virgin Atlantic Airways had with the federal government, which led to the establishment of the defunct Virgin Nigeria Airways with a proviso that allows the carrier to operate both domestic and international flights from the international terminal of the Murtala Muhammed Airport, Lagos.

Bruce said Nigeria’s image was dragged to the mud by Richard Branson, the major stakeholder of Virgin Atlantic Airways who signed the agreement with the federal government and who at various fora in the world, criticised Nigeria for its failure to honour agreements.

“You have to abide by the agreement you signed. If not, people will be afraid to continue to do business with you. It is not only that present government but subsequent governments. We will summon the minister to come and explain government’s part of the issue. The private sector is willing to invest in FAAN so we will give the agency zero allocation in the next budget. Agreement must be honoured; otherwise those involved must be prosecuted for betraying government’s interest.

“We want to protect the integrity of agreements and the federal republic of Nigeria about 70 per cent of the budget is spent on recurrent expenditure. We will not spend government money to run businesses that can be run by the private sector, while people are starving. We are gradually reducing the cost of governance. We will not allow the concession to continue until this problem is solved,” Bruce said.