Agonies, pains of airport concessionaires

Daily Trust in this report examines the series of controversies over previous concession agreements by the Federal Airports Authority of Nigeria (FAAN) which have cost the federal government billions in losses from litigation, claims and compensations.

On Monday February 4, 2020, there was a mild drama at the Murtala Muhammed International Airport (MMIA) access gate (toll gate) when aviation unions stormed the gate to dislodge the concessionaire managing the tollgate on behalf of the Federal Airports Authority of Nigeria (FAAN).

The concessionaire, the Integrated Intelligent Imaging West Africa Limited (I-Cube), was shocked when three major unions – the Air Transport Senior Staff Services Association of Nigeria (ATSSSAN), Association of Nigerian Aviation Professionals (ANAP) and the National Union of Air Transport Employees (NUATE) – arrived at the toll gate with scores of their members chasing the workers away from the tollgate.

The grouse of the union was that the concession contract had elapsed and FAAN was losing revenue as a result of the non-termination of the contract.

It was a chaotic scene at the MMIA tollgate on the fateful day. The chaos triggered massive gridlock at the airport with many passengers and users of the airport stranded. Normalcy returned as the police and Air Force took over the tollgate for a few days.

The then chairman of FAAN branch of NUATE, Idowu Adeshola, stated at the time that the unions had to seize control of the access gates to ensure that payment of salaries wasn’t affected by the depleting revenue.

He said: “We noticed that for over one year, I-Cube hadn’t been transparent enough in terms of revenue collection and remittance back to FAAN. The management of FAAN cannot say anything now because this place belongs to the workers and if we don’t have this revenue coming in, payment of salaries will be difficult.

In order for us to forestall such an occurrence, we had to be proactive and take over and we didn’t need the management for this because whatever we are going to get from here is what we are going to remit to the authority and it will also boost revenue.”

By the time the dust settled, Integrated Intelligent Imaging West Africa Limited (I-CUBE), the private concessionaire that had managed the tollgate for over a decade, was effectively out of business.

Since the drama, the tollgate is now managed by FAAN while the former concessionaire continued to lament the losses as a result of the union’s action which reportedly had the imprimatur of the federal government.

Up till today, the concessionaire said the gestapo style of the unions still haunts it given that there was no prior discussion, no formal letter about the termination of the contract contrary to the letters and spirit of the concession agreements which give the company the first right of renewal.

Speaking with our correspondent five years after the forceful ejection from the tollgate, Managing Director of I-CUBE, Moyosore Niran recalled how the company won the bid to manage the tollgate out of 16 firms that bid for the contract.

He stated that the company took over on November 20th 2008 and managed it till February 2020 when it was forcefully ejected “without any respect for the letter of the agreement.”

He recalled that the company as of that time was remitting N40 million monthly throughout the concession period. According to him, I-CUBE was running at a loss for the first nine months after taking over but the remittance did not stop because the concession was “covered by bank guarantee.”

The trauma of the “forced termination,” he stated, continues to haunt the company.  “We were given FAAN N40m every month and there was no single day that we missed payment by a single day. In fact I could remember that we were given an award by the Accountant General in 2010 as one of the best companies working for the government in terms of revenue generation.

“We actually wanted to redesign and remodel the tollgate but the bureaucracy of the government for them to review the terms of the agreement delayed that. We got that place based on merit not anybody we knew and that was why we were able to last.

“We were there from 2008 to February 2020 when we were forcefully eased out without any respect for the letters and tenure of the agreement. We were chased out violently by the unions based on the prompting of the then management of FAAN and possibly the Aviation Ministry and till today the staff of FAAN are still the ones collecting revenue there,” he stated.

Asked if there was a prior notice to the company before the staffers were forcefully ejected, he added, “There was no engagement at all. The truth of the matter is that in the concession agreement we had, we gave FAAN a bank guarantee for the amount of money we are paying them monthly, that in case we are not able to meet up with the concession fees, you can call on the guarantee and the bank will pay them. There was also another clause in the agreement that said that for FAAN to award that place to another private company, we must be given the first right of refusal, that was not done,” he stated.

In addition, he recalled that the court gave a judgement that the parties should revert to status quo but it wasn’t respected.

“There was nothing, no correspondence, we just saw them at the tollgate then and said they wanted to take over. It was like the NURTW faction fighting for chairmanship. That was exactly what happened,” he said.

Days after, the then Managing Director, Capt. Rabiu Yadudu, in a memo dated February 4, 2020, announced the termination of the contract.

The memo read in part: “We refer to the above mentioned Agreement which commenced on the 10th day of February 2014 and expired on the 9th February, 2019.

“Kindly be informed that the Authority has resolved to temporarily take over the management of the said Murtala Muhammed International Airport Access Gate with immediate effect to determine the actual revenue generated from the Access Gate. By this letter you are requested to vacate the premises immediately.

“This is to enable the Authority to take appropriate decisions on the management of the Access Gate.”

The tollgate controversy was just one out of many other concessions around the Murtala Muhammed International Airport (MMIA) and the Nnamdi Azikiwe International Airport, Abuja which did not end well.

Prior to the tollgate controversy, there was an interesting case involving Messrs Maevis Nigeria Limited which won the concession to shore up FAAN’s revenue base through the Airport Operations Management System (AOMS) at the MMIA.

The agreement which took effect from October 2007 was for a period of 10 years and to be renewed every five years. However, the agreement didn’t end well as FAAN terminated the agreement in 2012 while re-awarding the same for SITA.

FAAN in terminating the agreement said it was done with the directive of the aviation ministry and to improve its services and revenue profile.

FAAN said, “On the decision of the  Ministers of Aviation, Labour and Justice, a notice of termination was duly issued to Maevis on February 24, 2011, with a two-month notice period with regards to the Concession Agreement. Thus the Concession effectively terminated on expiration of this notice on May 23, 2011.

“It is also necessary to recall that a year earlier, specifically in May 2010, the Senate Committee on Aviation had invited both parties to a public hearing. After listening to both sides and reviewing the terms of the agreement and implementation thereof, resolved that FAAN should dispense with the services of Maevis Ltd since it was not adding value to FAAN’s revenue profile.

“As a result, the continuing existence of the concession presented not just a serious threat to FAAN’s current and future cash flows, but also to the very viability of the Authority as a going concern.”

Following the contract termination, the company took FAAN to court and there have been several judgements and appeals on the matter but the case remains pending as of the time of filing this report.

However, the man behind Maevis, Mr. Tunde Fagbemi, a Nigerian aviator and business leader, told Daily Trust that he is optimistic that he would get justice one day. He described his experience in the hands of FAAN as “terrible.”

He stated that the agency is notorious for not respecting the terms of its contract, thereby plunging the country into losses.

“The most famous public agency that knows how to breach contracts is FAAN,” he said, adding however that the current Minister is taking steps to right the wrongs of the past.

“We are lucky now that we have a very thorough Minister and luckily for us he is very educated and he is a gentleman and because Festus Keyamo is extremely brilliant and good, I think he is righting most of the wrongs that took place before he arrived. He has also learnt from the iniquities, madness and aggrandizement of previous Ministers and Managing Directors of FAAN. I think he is being more conscious,” Fagbemi said.

In a chat with our correspondent, Fagbemi insisted that Maevis fulfilled all righteousness but was frustrated out of the airport because the public servants were not happy with what the company was doing.

He said, “As a Nigerian, as a team, Maevis did its own work. But when Maevis finished doing its work, I will repeat again, the public servant who is not educated or who does not want to serve public good will do anything and everything to try and frustrate the effort of the others by finding maybe reason or any excuse to try and destroy that. So it’s on record today. And I say to you, challenge it.

“They told a lie and said, “Oh, we are not remitting their money.” We’ve been investigated by EFCC, we’ve been investigated by everybody that they can call. Luckily for us today, only one person is in the court of law facing corruption charges. It’s the minister. So, we did our work.

“We did our work to the extent that for the very first time, it was through us that FAAN could actually earn over $40m a month for their operation. We documented it but nobody wanted that…

“They were basically not happy with the quality of the information we were capturing. They wanted the black spots. We are out of the place and nothing has happened other than the fact that the quality of service has degenerated and it is taking a while for them to catch up with the reality that when you are at the gate, you should have an automatic gate. When you are at the airport, you must have an APIS (Advanced Passenger Information System).”

He said the company would continue to push on until justice is done, saying, “They expropriated our assets, they owe us money as I speak to you today, they are owing the banks that provided the money for the infrastructure, they are owing the public on the quality of service which we achieved that they are struggling to achieve.

“They disrupted the operations of many airlines, of many people for many days, for many months. But we don’t regret that we provided the service because every day, people say to me, ‘oh, I’d still use the airport’. It’s still the same check-in desk, 10 years after. I still use the airport, it is still the same infrastructure.

AIC VS FAAN

Like Maevis, I-CUBE, the lease agreement between Akande International Corporation (AIC) Limited, a company founded by the late business mogul and socialite, Harry Akande, with FAAN has become another classical case of how the failure to carry out due diligence before entering into public private partnership has cost the nation so much.

The bone of contention is a parcel of land within the Murtala Muhammed International Airport, Lagos, originally leased to AIC Limited in 1998 through a Deed of Lease dated February 17, 1998.

The agreement granted AIC a 50-year lease over the land for the exclusive purpose of developing a flight-path hotel and resort complex. The project was designed to enhance Lagos’ international gateway with world-class hospitality facilities.

However, FAAN later sought to repossess the land, arguing that it was central to the airport’s master plan and required for the construction of the international terminal. This has sparked a prolonged legal battle between both parties in Nigerian courts and international court of arbitration.

In June 2010, an arbitration panel chaired by the late Justice Kayode Esho awarded AIC $48 million in damages for FAAN’s alleged breach of the concession agreement, citing losses arising from the abandoned hotel project.

FAAN challenged the arbitral award at the Federal High Court in Lagos. In 2013, the court set aside the $48m award, dismissed AIC’s enforcement applications, and ruled in FAAN’s favour, granting the authority possession of the land. AIC appealed the decision, and the Court of Appeal later overturned the ruling and ordered a reassignment of the case. FAAN subsequently escalated the matter to the Supreme Court, where it is still pending.

Concerned by the delay, the AIC sought enforcement of the arbitral award in the United Kingdom. In 2019, the High Court of Justice in England granted AIC leave to enforce the $48m award with interest, criticising FAAN’s lack of diligence in prosecuting its Nigerian appeal. Although FAAN sought a stay of enforcement on the grounds that the Supreme Court case was still pending, the UK court ordered it to provide security of $24.1 million. By November 2020, the UK Court of Appeal affirmed AIC’s right to enforce the award against FAAN.

The dispute resurfaced in August 2025 when AIC’s lawyers, from the chambers of Professor A.B. Kasunmu wrote to FAAN warning against encroachment on the disputed land. In a letter dated August 19, the lawyers expressed concern that FAAN had commenced expansion works on the land despite subsisting court orders.

“A certified copy of the order is enclosed for ease of reference. In light of this, we urge FAAN to immediately cease all ongoing activities on the site,” the letter stated, warning that contempt proceedings would be initiated if FAAN failed to comply.

The solicitors referenced a Federal High Court order in Suit No. FHC/L/CS/90/2013, which directed both parties to maintain the status quo pending the determination of the case. While reaffirming AIC’s support for the Federal Government’s airport modernization agenda, they stressed that such efforts must respect existing legal processes.

Daily Trust reports that the current underutilisation of the Lagos Airport terminal two would not have arisen if not for the legal challenge by the AIC over the parcel of land. Following the pending litigation, the construction of the second terminal of the MMIA, the busiest airport in Nigeria, was impaired due to the contentious land as the aircraft parking area could not be expanded to accommodate wide-bodied aircraft.

Bi-Courtney-MMA2 concession

Another seemingly endless concession crisis was the MMA domestic terminal two (MMA2) concession with Bi-Courtney Aviation Services Limited (BASL) which has led to the neglect of two edifices opposite the terminal.

For over 18 years, the Hotel and Conference Centre projects at the Murtala Muhammed Airport (MMA), Lagos have remained abandoned over disagreement between the Federal Government and Operators of MMA2.

Stakeholders have continued to raise concerns following long years of neglect of the buildings occasioned by the several litigations over the MMA2 concession.

In retrospect, the concession of MMA2 to BASL is the first terminal concession ever carried out in the history of aviation in Nigeria. It was again described as the most hurriedly conducted thus setting a bad precedent for aviation concession in Nigeria.

This was why analysts say any effort to concession airports as being proposed by the Federal Government without resolving the MMA2 debacle might not see the light of the day.

There have been claims and counter-claims over who is right and wrong between the BASL and FAAN over the concession. BASL owned by business mogul and legal luminary, Dr. Wale Babalakin, SAN, insists the concession premised on a Build, Operate and Transfer (BOT) basis was for a period of 36 years contrary to what the company believes is an erroneous impression that the concession was for a period of 12 years.

The seemingly intractable disputes have also contributed to the neglect of the two projects- conference centre and hotel – which the concessionaire initiated almost after the MMA2 concession agreement was finalized.

It would be recalled that Babalakin sought the approval of FAAN to build the two projects to which the land was allocated by the latter and work started in 2005. In line with the terms and conditions of projects, Babalakin was to secure a foreign loan to complete the four-star hotel and conference centre and FAAN was expected to provide a guarantee.

But the project was taken to about 70 per cent completion until it was stalled by funding because according to sources privy to the matter, Babalakin could not secure the foreign loan to complete the project.

However, in March 2013, FAAN announced that it had terminated the leases granted to Babalakin for the development and management of the two projects which were also on BOT arrangement.

As of today, several cases instituted against FAAN on the MMA2 concession are still in court while some have been decided against FAAN. One of which was an award of N132bn to Babalakin against FAAN for operating the General Aviation Terminal (GAT) which is supposed to be part of the MMA2 concession.

Amidst the various cases of contract breaches, experts said the various cases should be resolved to pave the way for another set of concessions or PPPs.

Daily Trust gathered that there are over 60 cases against FAAN in different courts in the land, costing the authority billions of naira annually. If the $48 million dollar award is converted at the current official exchange rate, that would amount to almost N70bn. Also, a Lagos High Court in June 2013 awarded N5bn in damages to Maevis Limited against SITA and FAAN while invalidating the SITA-FAAN deal. While the case is still pending, it is estimated that the damages would have quadrupled due to interest accruing from it.

Worse still, experts say infrastructures at the airports across the country are still far from being adequate with passengers lamenting poor services.

Aviation analyst, Dr. Alex Nwuba said a properly drafted agreement should not be difficult to enforce, saying FAAN found itself in the current legal entanglements because of failure to respect agreements. He added, “The contracts are weak generally, let just put it that way from concession to tenant within the airport. That is the challenge we face and until we clean it up we are not going anywhere.”

He said, “Well, a properly written contract should not have a disagreement. It is either enforceable or unenforceable, to make a proper contract, it should be enforceable and the terms clearly spelt out to both parties, whoever the two parties are.

“So, in the case of FAAN, we have seen what was supposed to be a properly executed contract such as MMA2 in dispute for decades and it doesn’t appear that FAAN can do anything about it.

“The issue is what are the terms in the contract that FAAN does not agree with? One of them is tenure and so why was the contract not clear on tenure? So the problem is not the  participants, it’s the contract which is supposedly handled by an independent legal firm as an adviser and the government structures as implementors, somehow, somebody did not do their work and get the right information for lawyers to work on or he was already compromised. I used MM2 as an airport example.”

He said it is high time the government stopped doing the job of FAAN. “The federal government needs to just get out of the business of doing FAAN’s job which is what happens,” he stated, adding it is wrong for the federal government to take over the job of the agency. “That is why there is chaos,” Nwuba stated.

On the MMA2 saga, he said, “Apparently the end will come from what is in the contract. FAAN is of the opinion that the contract has ended. Bi-Courtney also believes the contract has not ended. The challenge has always been that FAAN will give you land and then withhold the land for other purposes and people.”

An aviation expert, Dr. Kingsley Nwokoma stated that FAAN should reorient its legal team and ensure it always has properly signed agreements in future.

He said, “Agreements should be world’s standard. It takes two to agree and when you agree on anything, there must be a legal base. If I am signing these agreements, there are terms and conditions. So I am sure you are aware of the long battle when they took over the tollgate.

“I think FAAN should sit down and have a proper agreement. If you have an agreement with loopholes, that is when the other party goes to court but if the agreement is proper and the timeline is stipulated, everybody is fine and happy. For somebody to say I am taking FAAN to court means the person has seen that going to court will benefit that party.

“If agreements are not causing disputes in other climes, why should agreements be causing disputes here? Going forward, let your agreements be world standard.”

Will Keyamo break the jinx?

The immediate past Minister of Aviation, Senator Hadi Sirika had promised to resolve the various concession issues he inherited but he couldn’t achieve that despite being the longest serving aviation Minister.

However, his predecessor, Festus Keyamo, SAN, has vowed to address them especially as the government moves to concession some airport terminals.

In a chat with our correspondent, he said, “Given my legal background, I am sorting out all these issues and at the appropriate time you will be briefed.”

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