After 20-Year Dispute, FAAN Set To Earn Revenue From Lagos MMA2 Terminal

The Federal Airports Authority of Nigeria (FAAN) is set to begin collecting concession fees from the Murtala Muhammed Airport Terminal Two (MMA2) in Lagos following the resolution of a dispute that kept the agency from earning revenue from the facility for about 20 years.

The Minister of Aviation and Aerospace Development, Festus Keyamo, disclosed this on Wednesday in Abuja during the signing of a settlement agreement between the Federal Government and Bi-Courtney Aviation Services Limited (BASL), the terminal’s concessionaire.

Keyamo said the agreement followed approval by the Federal Executive Council (FEC) and was designed to end the prolonged disagreement over the terms of the concession and establish a framework for the parties to work together.

According to the minister, FAAN had not earned any revenue from MMA2 for two decades because of the dispute.

“Today, FAAN begins to earn its money from MMA2. The parties must administer the new arrangements in a way that ensures that the amounts due are properly accounted for and paid,” he said.

The dispute dates back to between 2003 and 2005, following disagreements over the scope of Bi-Courtney’s Design-Build-Operate-Transfer concession for the terminal. The development came after a fire destroyed the old domestic terminal at the Lagos airport in 2005.

In 2013, FAAN terminated leases granted to Bi-Courtney, citing alleged contractual breaches. The disagreement subsequently resulted in prolonged litigation, culminating in a Supreme Court judgment that awarded Bi-Courtney N132 billion in damages.

Keyamo said the settlement was the outcome of sustained negotiations aimed at resolving outstanding claims and protecting the interests of the Federal Government and the concessionaire.

He explained that Bi-Courtney would waive outstanding claims against the government that remained unsettled at the time of the agreement, while the Federal Government and FAAN would also relinquish specified historical claims against the company.

These include accumulated concession fees and certain ancillary payments arising before the agreement was signed.

“The public should therefore understand that this is a reciprocal settlement. Both sides have agreed to surrender claims so that the relationship can proceed on defined terms,” the minister said.

He added that the agreement established clear obligations for the future, including the concessionaire’s responsibility to resume payment of concession fees under the original agreement.

The minister also stressed that the settlement would not compromise passenger safety, airport security or operational standards.

He said the government and relevant regulatory authorities would retain their oversight responsibilities, including provisions covering security access, emergency response and the maintenance of operational standards.

Speaking on behalf of Bi-Courtney, its representative, Wale Babalakin, expressed appreciation to President Bola Tinubu and Keyamo for facilitating a resolution to the dispute.

Babalakin said the disagreement had remained unresolved for more than 18 years despite the issues remaining substantially unchanged.

“The facts are the same, the issues are the same, yet it remained unresolved until President Bola Ahmed Tinubu, through his minister, Mr Festus Keyamo, found a solution to this issue. We are very grateful,” he said.

He said the settlement would benefit the wider economy by creating employment opportunities and encouraging the completion of abandoned projects at the airport.

According to Babalakin, the agreement would help improve the appearance of the terminal and create jobs offering better remuneration.

He added that the resolution could encourage investors and businesses facing disputes with government institutions to pursue negotiations rather than lose confidence in the process.

The settlement is expected to bring greater certainty to the management of MMA2, while allowing FAAN to begin collecting revenue from the facility under the agreed concession arrangements.