31 January 2013

Nigeria: When a Concession Endangers' Airport Security

Lagos — In 1998, the Federal Airport Authority (FAAN) concessioned a huge piece of land at the Lagos airport to Akande International Corporation (AIC) to build a Hilton Hotel for 50 years. But with developments of security breaches, terrorists' threats and attacks across the country, FAAN says the hotel project within the airport would further exacerbate security situation to the detriment of passengers, airport workers and aircraft. But Chief Harry Akande, a business mogul and politician said it wouldn't pull through with him because the deal had been sealed.

There has been hostilities between FAAN and AIC over the land. The police had to intervene at some point last week to forestall physical violence.

The 11.654 hectare of land is tucked adjacent the E-Wing of Murtala Mohammed International Airport (MMIA), Lagos and Nahco aviance plc headquarters.

The land is also about 100 yards away from the arrival and departure halls of MMIA. It is also directly overlooks the runway of the airport.

FAAN agreed the concession was properly drawn in 1998 with AIC. FAAN also agreed that AIC has genuine rights to be hurt by the government's decision to set aside the concession in 2010 following security concerns. FAAN acknowledged that AIC may have suffered financial loses but FAAN insists, in the circumstance, AIC should make do with a financial compensation that would be agreed upon and let the land go, however hurting, but in the overriding interest of national security plus MMIA's safety. It was also a distortion of the MMIA master plan.

It's been a hard sell to AIC so far. AIC isn't ready to let go of the land just yet as they have chased out FAAN workers who had commenced grading some portions of the land for a temporal car park. It took the intervention of the Deputy Commissioner of Police, Airport Command, Mr. Haliru Gwandu and his men to maintain law and order.

Mark Jacobs, the Director, FAAN Legal Services, explains the current position of the dispute:

He said: "The land was concessioned in 1998. It was a properly drawn concession agreement, but by the year 2000 it was set aside. FAAN decided to terminate the concession on good grounds. The reasons why it was terminated include; one, the transfer of the land to a third party for the purpose of building a hotel on that spot was counter to the entire airport master plan. In a very simple term, it was going to prevent any future expansion of the Murtala Muhammed International wing of the airport. Two: It was going to have a serious security implication if hotel was situated there, just overlooking the runway and the taxiway. So on those two grounds, infraction of the master plan and security, FAAN decided to terminal the concession agreement."

He went further to say that both parties went for arbitration. "Luckily, in any transaction like that the agreement will make provision on how to resolve any dispute and the very first one was that the parties should submit themselves to arbitration and we did. The arbitration, typical of Nigerian setting, lasted several years, it ended in 2010. The arbitration tribunal was headed by late Justice Kayode Eso, and he ordered that the company should be compensated for any expenses that they incurred as a result of the loss of the land."

But a visit to the disputed land by our correspondent saw this bold banner on the mesh fence: "WARNING! THIS PIECE OF LAND IS UNDER THE LAWFUL LEASEHOLD OF AIC LIMITED. Possession is reinforced by the ruling of Hon. Justice R.O Nwodo, of the Federal High Lagos in suit No.FHC/CS/513/2000 and by the arbitration ruling of Hon. Justice Kayode Eso on June 1, 2010. ALL TRESPASSERS ARE ACTING IN CONTEMPT OF THE COURT AND WILL BE PROSECUTED. AIC MANAGEMENT."

The FAAN General Manager, Corporate Communications Hon. Yabuku Dati, explained that on January 13, AIC Limited, forcefully took possession of part of MMIA's land with the help of armed policemen and his aides breaching security at the airport.

He explained further that again on January 24, thugs hired by the company physically assaulted top officials of FAAN who went to inspect the site of the incident on January 14.

"The company has no court order, authorising it to take possession of any portion of land at MMA because there was no dispute over land between FAAN and AIC Ltd. The case between the parties went into arbitration, which concluded that FAAN should pay a compensation of $74 million (about N11.2 billion) to AIC for depriving it of 35 years revenue as implied in the concession agreement. FAAN has however, appealed against the judgment of that arbitration and the case is yet to be determined."

"It is also important to note that the said concession agreement for the construction of a five star hotel at MMA could not be effected for 15 years, under various managements of FAAN and Ministers of Aviation, because the proposed hotel posed security threat at the airport and therefore, was operationally unviable," he said.

According to him, by March, construction work for a new international terminal for MMA, as envisaged in the airport master plan, will commence on the very site AIC is claiming.

"The federal government has already entered into an MoU with the government of China for this project, which will effectively turn MMA into a major hub in the West African air transport region," Dati said.

Speaking on the development, Mr. Gbenga Akinyemi, the Personal Assistant to Mr. Harry Akande, the owner of Hilton, explained that the company was on the land by virtue of a lease agreement it entered into with FAAN since February 1998.

He said that there was a subsisting court order which stopped FAAN from coming into the land to harass its personnel.

"I don't know why they are here because they are not supposed to come here and disturb the ongoing construction work. This is a development that has been consented since 1998. In addition, there is a 50-year lease, which is still subsisting till now. That is not tenable before us because FAAN and other security agencies are on ground at the airport guiding the environment," he said.

According to him, even if the hotel is too close to the airport, there are some security measures FAAN can put in place to ensure total security of the environment.

"There are airport hotels around the world attached to terminals like in Amsterdam airport and others," he said.

Also the General Manager, Administration and Business Development, AIC Group, Chief Niyi Akande, said the company is repossessing its land pending the final judgment by the court.

He said the Managing Director of FAAN, Mr. George Uriesi, risk jail if he continued to encourage the agency to flout court orders.

But as the altercation between FAAN and AIC continues, stakeholders have called on the presidency and relevant authorities to wade into the crisis and resolve the matter amicably before it festers beyond easy treatment.

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