Delta Government says the Asaba Airport Concession will fetch more than N80 billion revenue at the end of the 30-year period.
Prof. Sylvester Monye, Senior Policy Adviser to Gov. Ifeanyi Okowa, said this while briefing journalists on decisions reached at the State Executive Council meeting in Asaba on Thursday.
He explained that contrary to opinions, the whole process that led to the concessioning of the airport were open and transparent and took almost five years to actualise.
He said that there was no state in Nigeria that had the capacity to manage airport, saying that the state government had instead sought the help of the Federal Government.
According to him, the consortium Asaba Airport Company Limited is a Special Purpose Vehicle (SPV) which represents a bigger umbrella that houses many business entities that also won their bids to perform specific transactions to work together for the realisation of a common goal.
“So, this consortium was registered as a legal entity in Nigeria on Oct. 13, 2020 as an SPV to enable the state government monitor the concessionaire to meet the requirements for the transaction.
“Let me take you through the process that we are very proud of.
“Before we started with the issue of concession, as a state we did not have the expertise, so we engaged the services of transaction advisers,’’ Monye said.
He added that the state government advertised for the financial adviser, saying that this was done in a transparent manner and government finally engaged an adviser of international repute.
“There was an inception report. That is the feasibility study of the project; the status of Asaba Airport to date.
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“Nobody will invest into a business if it is not viable and we did not just arrive at 30 years.
“It was based on detailed financial analysis of investment returns. So every stage of the transaction was done in a transparent way.
“We had several meetings with various interest groups. We published, we had road shows and we went to China to talk to the Chinese.
“So, we advertised in three national newspapers where we invited the bidders to an open bid process and the whole process took close to five years,’’ he said.
According to Monye, the concessionaire will pay N1 billion to the state government in 15 days’ time.
“Again in this transaction, they will pay annual royalty of 2.5 per cent of their turnover, which according to the feasibility study will amount to about N43.4 billion,” Monye said.
He said, “In addition, they will give us investment in assets; hotel, cargo terminal, among others, the upgrade of the airport to the tune of N28 billion and in addition pay the state N100 million yearly with 10 per cent escalation.
“So, on the whole, we expect to get about N80 billion in terms of revenue over the period of concession.
“Currently, what we are getting from the airport as revenue is less than 25 per cent of the cost of running the airport,’’ he said.
“Currently, Delta state is owing National Emergency Management Agency (NEMA) N70 million and Nigerian Meteorological Agency (NiMe)t about N70 million as well.
“We are owing Federal Airports Authority of Nigeria (FAAN) about N67 million but today all these cost and liabilities will be wiped by the concessionaire.’’
Monye said that at the end, the state would build a giant airport city because at the end, everything that would be invested would be handed over to the state.