How FAAN Subverted Due Process

Nigeria: Airport Operator – How FAAN Subverted Due Process

By Chinedu Eze, 11 April 2012

When the Federal Airports Authority of Nigeria (FAAN) physically enforced the termination of the services of Maevis Limited, which was providing the Airport Operations Management System (AOMS) at Abuja and Lagos airports, in the midnight of March 23, Societe Internationale de Telecom-munication Aeronautique (SITA) was swiftly appointed to take over.

Serious questions are now being raised by regulatory authorities over the process that produced SITA within 48 hours of the ejection of Maevis, especially as it fell on a weekend.

The AOMS contract was neither advertised nor open to competitive bidding for the government to get the best deal possible, industry sources told THISDAY Tuesday.

The regulatory authorities have also claimed ignorance of the deal, a development that is putting more question marks on the transparency of the entire process.
The Director-General of Bureau of Public Procurement (BPP), Emeka Eze, told THISDAY in an interview yesterday that neither he nor his office was aware that SITA had taken over the provision of AOMS at the nation’s two busiest airports.
“I am not aware they (SITA) have taken over,” he said, although his office is legally required to vet the process to get the best deal for the country. He promised to “cross check”.

Also, the Director-General of Infrastructure Concession Regulatory Commission (ICRC), Dr. Mansur Ahmed, has said the position of the commission is that there is a subsisting contract between FAAN and Maevis and if the two parties felt they do not wish to continue with the contract, then they should follow the provision provided in the contract agreement on how it would be dissolved.
“Our position is very clear. There is subsisting contract but if the two parties feel that they do not wish to continue with the contract, which they entered into, they should part ways in accordance to the terms of the contract. It has been our position and we have always recommended that,” Ahmed said.

But the Special Assistant to the Minister of Aviation (Media), Mr. Joe Obi, told THISDAY Tuesday that upon the termination of the Maevis concession, FAAN engaged the services of the “largest AOMS service provider in the world, SITA. In addition to being present at most international airports around the world, SITA provides AOMS services in several airports in Africa, namely Johannesburg, Cape Town, Durban, Nairobi, Cairo, Casablanca and Accra”.
He explained that SITA was given a service contract, adding that the provision of AOMS “is not something to be concessioned”.
“Exactly in line with how this is done in the rest of the world, SITA has been given a service contract to provide AOMS services to FAAN. The arrangement that existed with Maevis was an aberration, not a global precedent,” he said.

Obi also explained that the AOMS is a service that is provided through a simple service contract at no cost to the airport operator.
“The AOMS service provider is remunerated via a passenger throughput charge depending on the volume of traffic passing through the airport. In Africa, SITA provides this service at 90 US cents per passenger through Johannesburg, Cape Town and Durban; $1.50 through Nairobi; $1.10 through Cairo; and $1.50 through Accra. The throughput charge is paid for from the passenger ticket and a critical service is provided to the airport, which benefits the passenger, the airlines and security agencies,” he said.
Many have also pointed out the contradictions in the actions of the Ministry of Aviation and FAAN.
On the one hand, Aviation Minister, Mrs Stella Oduah, has been fighting British airlines over what she believes is the marginalisation of Nigerian carrier, Arik Air, but on the other hand, she has approved the displacement of a Nigerian company, Maevis, in favour of a French company, SITA, at the nation’s major airports.

There is also a legal leg to the imbroglio, as Maevis had taken SITA to court barring it from taking over its services.
On March 13, 2012, Maevis wrote to SITA and reminded the company of the Public Private Partnership (PPP) agreement it has with FAAN and, among other things, said: “As you may be aware, the subject of the agreement has become subject of a dispute at the Federal High Court in Suit No: FHC/L/CS/ 1155/2010 between Maevis and FAAN. The Federal High Court specifically ordered FAAN to preserve the res in the matter on September 24, 2010, pending the determination of the arbitration between the parties.”

Maevis told SITA about other court orders restraining FAAN from taking over the AOMS services from the company, adding: “Under law, none of the parties can unilaterally deviate from the state of affair existing as of the date of the court’s order. Any violation of court’s orders is punishable as a criminal under the relevant rules concerning contempt of court.”
Industry critic, Olu Fidel Ohunayo, who spoke to THISDAY yesterday, wondered how within 24 hours SITA took over the operations of Maevis, describing the action as insider breach and argued that there was no transparency in the deal between FAAN and SITA as there was no advertising for the job so that the public would know before it was given to SITA.

Ohunayo earlier observed that in 2007, the agreement between FAAN and Maevis was signed “to the surprise of industry watchers because Maevis won the deal over and above other experienced organisations that applied for the contract; organisations such as SITA, NAHCO-ARNIC etc. The company went to work investing and providing services that improved facilitation for passengers and airlines, while also capturing and generating revenue for FAAN”.
But Joe Obi argued that by contracting SITA, FAAN had saved itself the unnecessary and aberrant leakage of 37 per cent of its revenue, “while providing a world class service to FAAN’s airport users at no cost to FAAN”.
On the perceived contradiction between the ministry’s positions on Arik and Maevis, Obi said: “The two scenarios you narrated are very different and unrelated. To the best of my knowledge Arik Air has no concession or contract agreement with any agency of the Aviation Ministry and so could not have been in any position to flagrantly breach any contract terms as Maevis has done.

“Secondly being an indigenous firm is no certificate to violate terms of agreement on one hand and hope to get protection from the same government on the other hand. While we are committed to protecting all companies both foreign and local which have a business relationship with us from certain trade practices, we cannot close our eyes to clear cases of arbitrariness on the part of any company simply because it is an indigenous firm.
“The Maevis case indicates that government is losing huge revenue as a result of its non-compliance with the terms of the concession agreement and no responsible agency of government would close its eyes to such brazen act of impunity simply because indigenous firms need to be protected.”

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