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MMA2 TERMINAL

Sector

Transport

Location

Lagos

Value

NGN 9000 million (US$ 66 million)

Phase

Implementation

Sponsoring Agency

Federal Airports Authority of Nigeria

Last update

15-11-2018 15:22:50

MMA2 TERMINAL

Sector

Transport

State

Lagos

Value

NGN 9000 million (US$ 66 million)

Phase

Implementation

Sponsoring Agency

Federal Airports Authority of Nigeria

Last update

15-11-2018 15:22:50

  • Basic project information
  • Parties
  • Contract information
  • Announcements
  • Gallery

Basic project information

  • Project need

    The Federal Government of Nigeria desires to promote investment and private sector participation in the development and operation of its private utilities and infrastructures. This is a PPP project for the design, engineering, procurement, construction, operation, and transfer of a new domestic terminal at the Murtala Mohammed Airport, Ikeja, Lagos, Nigeria.

  • Description of asset

    The project assets consist of modern facilities, such as self-service check-in kiosks, automated access gates, passenger and baggage reconciliation system, and multi-storey car park (MSCP). The MSCP can conveniently accommodate 800 cars at any point in time. The terminal also serves to house top-of-the-range restaurants and retail outlets.

  • Description of services

    The terminal has the capacity to facilitate four million passengers per year. The GAT can handle 12 flights at once (or 1,500 passengers per hour), and 2.8 million domestic passengers are expected to travel through the terminal yearly.

  • Rationale for selection of PPP model

    A build, operate, and transfer model was selected to meet the increase in demand of air passengers and aircraft movement. PPP intervention in the country’s aviation sector will fill its huge infrastructural gap. The model will also make it possible for local investors to inject funds into the sector, thereby creating more jobs and reducing the burden and size of the public service. It is also noteworthy that any facility under PPP would be more efficiently managed and cost the government little or nothing.

  • Stakeholder consultations

    Relevant stakeholder engagement sessions were carried out among key stakeholders, including the regulatory bodies, FAAN, workers' unions, and passenger airlines.

  • Project Summary document

    Information will be published as soon as it is available.

Project milestones

2006

24 April

Commercial close

Concession agreement between parties was signed

2007

7 May

Commissioning of project

Project commissioned by the then president of the Federal Republic of Nigeria

2018

23 April

Expiry of contract

Initial agreement was for 12 years , however operator obtained ministerial approval for extension to 36 years which is being contested by FAAN

Parties

Sponsoring Agency

Federal Airports Authority of Nigeria

Sponsoring Agency Information

  • business_center Federal Airports Authority of Nigeria

Private parties

Bi-Courtney Limited

Private Party Information

  • business_center Bi-Courtney Limited

Contract information

Redacted PPP Agreement Financial structure Risks

Redacted PPP Agreement

  • REDACTED PPP AGREEMENT

    Redacted PPP agreement

    file_downloadmma2_Redacted.pdf

Financial Structure

  • Equity-debt ratio

    40% Equity, 60% Debt

  • Shareholders

    A Limited Liability company owning majority of the shares , and other private investors: The Shareholding Structure are as follows: 1. SPECTRA LIMITED = 9,000,000 MILLION SHARES 2. CHIEF T.K AKINBAMI = 500,000 SHARES 3. DR. OLAWALE BABALAKIN = 500,000 SHARES

  • Other information

    Initial agreement was for 12 years , however operator obtained ministerial approval for extension to 36 years which is being contested by FAAN

Risks

Type of risk Description Allocation Mitigation
Pre-construction risk Risk of not obtaining all the relevant approvals Private Sector Effective stakeholder engagement with relevant authorities to obtain approvals
Construction / Completion Risk of not completing work prior to Milestone dates Private Sector Regular review of project Implementation Schedule
Cost risk Private Sector Effective budgeting, Cost management and financial controls
Financial risk Risk of not being able to provide the performance bond Private Sector Financial planning and control
Risk related to change in law, taxes, scope, technical standards, regulatory framework Public Sector
Operating risk Risk of operational inefficiencies Private Sector Effective operations management planning
Termination provisions

Termination Provisions

  • Concessionaire

    Events of Default Brief description Termination Payments Documents
    Event Failure of authority to perform its obligation as set as out in the agreement
    Event Any representation and warranty made by the authority as stated in relevant articles that has proven to be materially incorrect
  • Authority

    Events of Default Brief description of events of default Termination Payments Documents
    Event The concessionaire abandons or is deemed to abandon the construction of the terminal as provided by the relevant articles
    Event The concessionaire fails to pay the concession fee as required in relevant articles
    Event The concessionaire goes into liquidation or becomes insolvent under the law

Announcements

    AGREEMENT TENURE Friday 25th of August 2017

    Initial agreement was for 12 years , however operator obtained ministerial approval for extension to 36 years which is being contested by FAAN

    ICRC MOVES TO RESOLVE CONCESSION DISPUTES BETWEEN FAAN, MMA2 Thursday 25th of January 2018

    The Infrastructure Concession Regulatory Commission ( ICRC ) said on Monday that it will deploy everything within its ability to ensure the concession dispute between the Federal Airports Authority of Nigeria ( FAAN ) and Bi-Courtney Aviation Services is resolved. The Commission, which is saddled with the responsibility of monitoring and ensuring the efficient execution of all A Public-Private Partnership (PPP) projects entered into by MDAs on behalf of the Federal Government said it has continued to engage Hadi Sirika, the Minister of State on Aviation since his assumption of office on these challenges and believe they will be resolved soon enough in order to strengthen the relationship between the parties. Recall that the MMA2 and the Hotel and Conference Centre concessions awarded to Bi-Courtney Aviation Services Limited as a PPP project for the design, engineering, procurement, construction, completion, commissioning, operations and transfer has been experiencing several challenges. The terminal which took off in 2007 was given out in concession by FAAN, as representative of the federal government on Build, Operate and Transfer (BOT) basis, but while BASL insists that the concession agreement was for 36 years and that the General Aviation Terminal (GAT) belongs to the company in cognizance of the agreement, FAAN insists that it did not endorse 36 years for the concession but 12 years and that GAT was not part of the agreement. Speaking during a visit by the commission to MMA2, yesterday, Chidi Izuwah, acting Director General ICRC said he was aware of the challenges between the both parties adding that “We want to listen to both parties as an independent regulator, we want to physically access the situation and challenges on ground in order to Bette appreciate the positions by FAAN and Bi-Courtney and thereafter suggest possible line of action in resolving these issues. “We are interested in having an update from the parties on the performance of the related projects; we want to understand the challenges facing the operators, as well as the grantor of the contracts and the various steps taken towards resolving these challenges; we want to hear from the parties their requests to the government in ensuring the projects are efficiently implemented for the overall benefits to the government.” Also speaking during the visit, Wale Babalakin, Chairman , Bi-Courtney Aviation Services said if Nigeria intends to encourage private sector participation in the infrastructural development of the country it must abide by international regulations; government and its agencies must respect and abide by concession agreements.

Gallery

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    About Us

    The ICRC was established to regulate Public Private Partnership (PPP) endeavours of the Federal government aimed at addressing Nigeria’s physical infrastructure deficit which hampers economic development.

    Contact us

    • languagehttp://www.icrc.gov.ng
    • emailinfo@icrc.gov.ng
    • call+234 9 4604900
    • room Plot 1270, Ayangba Street, Near FCDA Headquarters, Area 11, Garki, Abuja.

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