Delta State Government, Tuesday, signed concession agreement Asaba Airport Company Limited for the concession of the Asaba International Airport for a period of 30 years, exempting the concessionaire from payment of tax for five years.
Speaking during the agreement-signing ceremony, Governor Ifeanyi Okowa said the decision to concession the Airport was taken in the best interest of Deltans.
Okowa said the Osubi Airport would soon begin operation, saying that the State Government would support the reopening process of the Airport.
He said: “As we may be aware, this airport was conceived and built by the previous administration of Dr Emmanuel Uduaghan, CON, not only as a passenger airport but one that will tap the vast economic potentials accruable from the proximity to the eastern commercial cities of Onitsha and Nnewi, and be a hub for the export of agricultural and manufactured goods.
“Unfortunately, the vision suffered a major setback when the airport was downgraded to a Category 3 airport by the Nigerian Civil Aviation Authority (NCAA) just a few months before my administration came into being. That meant the airport could only accommodate smaller aircraft such as the Q400 and DASH 8. In the face of an economic recession at the time, we were confronted both with the challenge of upturning the downgrade and turning the airport into a model economic platform that is self-sustaining through a robust public/private partnership.
“It is their duty to manage the airport and develop the various strategic business units in the form of; Cargo Business and the development of the Cargo Terminal Development of the Logistics Hub and Cargo Warehouses. The operation and management of the Tank Farm. The development and management of the Business Park.
“The development and management of the Hotel and Convention Centre. An Airline operating out of Asaba International Airport as an Operational Hub, Aircraft Maintenance, Repair and Overhaul (MRO) facility.
“The concession shall be for an initial period of thirty years with the following terms as approved by the Delta State Executive Council and the Delta State House of Assembly.
“The name of the Airport shall remain Asaba International Airport. However, the Concessionaire, upon discussion with the State, can include a tagline to the existing Airport name for the purpose of branding. Competing Airport: There shall not be any publicly or privately-owned new airport, whether greenfield developments or expansions in Delta North Senatorial District of Delta State, during the concession period. Employment of Deltans:
“The Concessionaire shall at all times be under an obligation to maintain an employment ratio of twenty per cent (20%) of its staff for the operation of the Airport comprising indigenes of Delta State; Mandatory Capital Projects; The Concessionaire shall undertake the development of Mandatory Capital Projects, and they shall be completed within a period of three years from the effective date of the transaction.
“The Mandatory Capital Projects include Airport/Terminal Facility, Cargo Facility, Maintenance, Repair and Operations (MRO) Facility, Tank Farm Facility, Industrial Park and Office Facility, and Hotel and Conference Facility. Concessionaire Obligation:
“The Concessionaire shall be responsible for the management, operation and maintenance of the airport, keeping it in good operating repair and condition throughout the concession period at its own cost and risk, and in accordance with Prudent Industry Practice and the provisions of the Agreement. Exemption of Payment of Tax: The Concessionaire shall be exempted from the payment of some specific taxes to the State for a period of five (5) years, to enable it to concentrate on the development of the mandatory capital projects as listed above; Rights of Inspection of the Airport Facilities:
“The assets and all infrastructure constructed by the Concessionaire, together with all related investments in, and upgrades to the assets, shall be handed back to the State at the end of the concession period. The Concessionaire shall purchase and maintain in full force and effect any and all of the insurances required for the operation of the airport.
“The Concessionaire shall pay to the State a royalty fee of 2.5% of the annual Earnings Before Interest, Taxes, Depreciation, and Amortization. The Concessionaire shall pay to the State an annual fee of One hundred-million-naira (N100,000,000.00) each year during the concession period, with 10% escalation every five (5) years of the concession period.
“The Concessionaire shall pay to the State an upfront fee of N1b only on or before the close of business on the 15th day following the signing of this agreement.
“My good people of Delta State, with over N28b expected to be pumped into the airport development by the Consortium over the concession period, the benefits to the State in terms of employment generation, economic growth, urban renewal, and tourism potentials are enormous.”