‘Maevis Renegotiated Concession Deal with FAAN’

By Martha Momoh Thisday.ng

More light is being thrown on the ongoing disagreement between the Federal Airports Authority of Nigeria (FAAN) and Maevis Limited over a concessioning agreement.

Documents made available to THISDAY indicated that the deal was renegotiated from a joint holding where FAAN had 60 per cent and Maevis 40 per cent to a concession under the Public, Private Partnership (PPP) system.

THISDAY also learnt that as at March 2012, Maevis remitted to FAAN the sum of N44 billion and $10 million (totalling N45.6 billion) from August 1, 2008 at the Murtala Muhammed International Airport, Lagos and from December 9, 2009 at the Nnamdi Azikiwe International Airport, Abuja.

A document made available to THISDAY showed that few weeks before the end of President Olusegun Obasanjo’s administration a committee set up by the then-Minister of Aviation, Chief Femi Fani Kayode, had presented its report, calling for the renegotiation of the agreement, a request that was endorsed by the then-President on May 9, 2007.

The deal, THISDAY gathered, was renegotiated whereby Maevis was to earn 8 per cent flat revenue on all generated and collected revenue, “but later FAAN kicked against the 8 per cent on the grounds that it was a flat fee and not performance driven, bearing in mind that one of the major challenges of FAAN was in the area of revenue collection.”

“To this, it was renegotiated to 2 per cent commission and 35 per cent enhanced fee to encourage Maevis to drive and improve FAAN’s revenue,” a source told THISDAY.
In the agreement signed by both parties, it was agreed that the project “shall comprise the acquisition, installation, operation and management of world class Integrated Airport Operations Management System (AOMS), Airport Operations Database (AODB), Common User Terminal Equipment (CUTE), Computer Based Departure Control System Platform, and Common Use Self Service (CUSS) Kiosk.

Other components of the agreement include a fully automated Airport Pricing and Billing System (PBS), a proactive Revenue Management System and an electronic payment gateway system incorporating a Transport Electronic Funds Transfer and Settlement System at the airports as further specified in the first schedule.”

As considerations for the acquisition of these software, hardware and other equipment and technology, the agreement said that FAAN shall pay Maevis 2 per cent of the revenue “currently collected by FAAN in the designated airports and at the time of this agreement…”
The agreement also said that “FAAN shall pay Maevis thirty five per cent of additional revenue generated and collected above FAAN’s current revenue generation.”

In its reaction, FAAN accused Maevis of choosing to ignore the fundamental basis of the concession, and applied an interpretation that was disadvantageous to FAAN while being unfairly advantageous to Maevis.
“As a result, Maevis illegally collected more than N3 billion from FAAN’s revenue as 35 per cent enhancement fee, which was not due to them,” the Authority added.

FAAN also alleged that Meavis connived with two of its banks to illegally divert funds belonging to FAAN to Maevis without the former’s permission or reconciliation, “in breach of the terms of the Concession Agreement and in contravention of Government Regulations.”
“FAAN’s money was paid into an account controlled by Maevis and FAAN was paid only after Maevis had decided what was due to themselves, and what was due to FAAN. This contravened the terms of the agreement and the Nigerian Financial Regulations and both Maevis and their banks rebuffed every attempt to correct this anomaly.”

On the revenue remitted to FAAN, Maevis said that its targeted revenue would have been realised if FAAN had allowed the company to explore all the revenue sources as agreed in the concession agreement.

It said that it sourced the revenues it remitted to the agency at the said period from seven revenue sources, including landing and parking charges, passenger service charge (PSC), Avio Bridge, CUTE, rent, service recovery charge, and concession charge from companies on concession with the Authority.

In addition to these seven revenue sources, there are other 21 revenue sources, which were kept away from Maevis, the source said. “FAAN refused Maevis request to automate other areas of revenue. Part of the automation was to block loopholes,” the source added.