Leaked Cabinet Memo Confirms Sole-Sourcing
The Government, is giving away the management of the impressive new Kotoka International Airport (KIA) to a private company, a memo before Cabinet reveals.
Turkish company by name TAV Airport Holding Company Limited, per the cabinet memo, will be in-charge of the “day to day operations, including facility maintenance and fees collections” at what has been described as one of the most remarkable airports in Africa currently.
Ghana Airport Company, has been struggling in recent times to manage the new facility and government appears to have settled on a laziest option.
The Aviation Ministry, is said to have received a proposal from Tav Airport Holding “to help bring about the physical development of the airport enclave.”
It is not clear, if the Akufo-Addo government, considered any other option aside the proposal from the Turkey-based company.
The aim of the proposal, according to the leaked cabinet document, is “to help bring about physical development of the airport enclave and transform the KIA, into a world class airport with improved managerial efficiency.”
The document prepared by the Aviation Minister for Cabinet consideration, said under its Concession Agreement that: “As payment for their services, the concessionaires receive a percentage of the gross revenues from the operation of the airport, but are required to pay the airport owner the greater of this percentage amount or a minimum annual guaranteed amount.”
It added: “The Concessionaires assume most of the risk for potential downturns in the airport revenues, but also receive a greater reward, if there is an unexpected increase in airline passenger traffic.”
The proposal, noted the terminals at the KIA, will be managed by “airlines or other airport managers.”
However, the draft proposal pointed out that the “ownership of the airport and its operations are the responsibility of the State. The State recovers from the terminal manager its allocable operating and maintenance expenses according to the guidelines of the terminal lease. The terminal manager, will pay all other operating and maintenance expenses and in turn recover all the costs and expenses, in addition to management fee, from the airlines through quarterly user charges.”
The Aviation Ministry, argued that the participation of the private sector, “will bring about the needed equity investment for the transformation of the sector, thereby making the KIA, achieve the competitive status within the West African Sub-region and continent as a whole.”
“The action by government will promote sound development of airports in Ghana with due regards to the interest of airport users and the general public. This partnership will promote efficient and economic development and cooperation of airports not only within Ghana but with airports and airlines worldwide to foster growth in all sectors of the economy,” it added.
The airport, which handles an average of 4,706 passengers daily, is currently being managed by the Ghana Airports Company Limited.
Under the proposed terminal management contract, terminals within the airport, will be managed by the airlines, while the ownership of the airport and its operations, remain the responsibility of the state.
For the concession agreement, the concession manager, will be responsible for “all aspects of the day to day operations.”
“The concessionaires assume most of the risk for potential downturns in the airport revenues but also receive a greater reward if there is an unexpected increase in airline passenger traffic,” the memo noted.
The proposal urged Cabinet to “consider and convey policy approval for the Ministry of Aviation to facilitate the engagement of Tav Airports Holding Company Limited as a strategic partner for the management of Kotoka International Airport.”
The proposal cites New Zealand as an example where the private sector was involved in airport management “to release the government of the heavy fiscal load and also to increase the airport industry contribution to the economy by being more efficient.”
The ministry argued that “the participation of the private sector will bring about the needed equity investment for the transformation of the sector thereby making the KIA achieve competitive status within the West African Sub-Region and the continent as a whole.”
It also said such move will be to provide “the needed financial strength for infrastructure and technological investment in the sector.”
Ghana Airports Company Limited is the current manager of the airport and it was established as a result of the decoupling of the existing Ghana Civil Aviation Authority (GCAA).
The company was registered in January 2006 with specific responsibility for planning, developing, managing and maintaining all airports and aerodromes in Ghana, including the KIA, Kumasi Airport, Tamale Airport, Sunyani Airport, Ho Airport, WA Airstrip, as well as various Airstrips.
Ghana Airports Company Limited is an implementing agency under the Ministry of Aviation and has been operational since 2007.