The Federal Government's settlement with Bi-Courtney Aviation Services Limited over the Murtala Muhammed Airport Terminal Two dispute is a welcome development. After nearly two decades of litigation, disagreement and commercial uncertainty, one of Nigeria's most visible public-private partnership disputes appears to be moving towards closure. But the country should resist the temptation to treat this only as an aviation story. The MMA2 dispute is bigger than one airport terminal, one company, one ministry or one settlement. It is a case study in the institutional weaknesses that continue to undermine Nigeria's infrastructure delivery.
The Real Challenge: Institutional Strength
More importantly, it is a reminder that the country's PPP challenge is not necessarily the absence of laws, regulators or policy documents. Nigeria already has an infrastructure concession framework. The real question is whether that framework is strong, respected, and interventionist enough to prevent commercial disputes from becoming generational failures. Nigeria has the Infrastructure Concession Regulatory Commission, established under the ICRC Act to regulate public-private partnerships of the Federal Government and to support private-sector participation in infrastructure development. The commission's mandate includes taking custody of concession agreements, monitoring compliance, issuing guidelines, and supporting ministries, departments and agencies in the development and execution of PPP projects.
That architecture matters. It means Nigeria is not starting from zero. Yet the MMA2 experience shows that formal institutions alone are not enough. Institutions must be able to enforce discipline, preserve continuity, manage risk early, and protect the credibility of government contracts across political cycles.
Background of the Dispute
The dispute dates back to the 2003 concession granted to Bi-Courtney to build and operate MMA2 following the fire that destroyed the old domestic terminal in Lagos. The terminal began operations in 2007, but disagreements soon arose over the scope of the concession, revenue rights, facilities, exclusivity and related obligations. What should have been a model infrastructure partnership became one of the country's longest-running concession disputes.
The Settlement Terms
The reported settlement includes major concessions on both sides. Bi-Courtney is said to have agreed to waive a significant judgment debt, while the government has moved to restore certain project rights and enhance the terminal's commercial viability through revised operational arrangements. The exclusivity clause, which had reportedly constrained other airport development around Lagos, has also been addressed. On the surface, that is a practical compromise. It reduces fiscal pressure on the government, provides the concessionaire with a clearer commercial pathway, and may improve the use of airport infrastructure.
Lessons for Policymakers
But a settlement reached after 20 years should not be celebrated without reflection. It should make policymakers uncomfortable. A serious infrastructure market should not require two decades of litigation, court rulings, political intervention, and debt write-offs to clarify the meaning of a concession agreement. By the time a dispute lasts that long, value has already been destroyed. The investor has lost time, certainty, and commercial momentum. The government has lost credibility and may have accumulated legal exposure. The public has lost better services, faster infrastructure delivery, and confidence in the PPP model.
First Lesson: Contracts as State Obligations
The first lesson is that government contracts must be treated as state obligations, not as administrative preferences. A concession should not depend on a minister's mood, an agency head's view or the politics of a new administration. The private investor is contracting with the Nigerian state, not with a temporary officeholder. This matters because infrastructure financing depends on continuity. Investors who commit capital to airports, roads, ports, power assets or rail projects expect long-term contractual stability. When agreements are reinterpreted or frustrated following political transitions, investors do not merely complain; they price the risk. They demand higher returns, stronger guarantees and more restrictive terms. Some avoid the market altogether. The public eventually pays for that uncertainty through delayed projects, higher user charges, poorer services and fewer credible bidders.
Second Lesson: Disciplined Contract Drafting
The second lesson is that contract drafting must become more disciplined. Many PPP disputes stem from unclear language. Who controls which assets? Which revenue belongs to the private partner? Which obligations remain with the government? How long does exclusivity last? What happens if the government builds competing infrastructure? Which remedy applies if either party breaches? These are not legal technicalities. They are commercial fundamentals. The MMA2 dispute shows how questions around scope and exclusivity can have long-term consequences. Exclusivity may sometimes be necessary to make an infrastructure project bankable. If a private investor is taking substantial upfront risk, limited protection may be justified. But exclusivity must be carefully defined, limited in duration and geography, and balanced against future public-interest needs. Investor protection should not lead to infrastructure paralysis.
Third Lesson: Dispute Prevention Over Settlement
The third lesson is that dispute prevention must take precedence over dispute settlement. Litigation is often the most expensive way to manage a PPP breakdown. By the time parties reach appellate courts, the commercial relationship is usually damaged. By the time judgment debts accumulate, public finances are exposed. By the time a minister has to negotiate a settlement years later, the institutional system has already failed. This is where the ICRC's role should become more central. The commission already has a mandate to monitor compliance and support PPP implementation. The next phase of reform should strengthen its post-contract authority, enabling it to identify distressed concessions early, trigger mandatory reviews, require corrective action, and escalate risks before they become full-blown legal disputes. A regulator should not merely keep records of concession agreements. It should help prevent concession failure.
Fourth Lesson: Meaningful Contract Disclosure
The fourth lesson is that contract disclosure must become more meaningful. Nigeria already recognises PPP contract disclosure, and the ICRC provides public-facing information on PPP processes. But disclosure should not be treated as a box-ticking exercise. Citizens, investors, legislators, journalists and regulators should be able to understand the status of major concession projects. For large infrastructure concessions, the public should know the concession term, the responsible ministry or agency, the private partner, major obligations, performance milestones, amendments, disputes, fiscal exposure and resolution status. Commercially sensitive details can be protected, but sufficient information should be available to prevent institutional amnesia. If a concession is drifting, the system should know before it collapses.
Fifth Lesson: Resilience to Political Transitions
The fifth lesson is that PPP performance must withstand political transitions. A 20-year concession will outlast ministers, permanent secretaries, directors-general and sometimes even presidents. Every major concession should therefore include mandatory transition briefs whenever there is a change in political or administrative leadership. Those briefs should clearly identify binding government obligations, pending disputes, fiscal risks, investor commitments, operational performance, legal exposure and upcoming decision points. A new administration may change policy priorities, but it should not inherit ignorance of existing contractual obligations.
Path Forward: From Settlement to Reform
The MMA2 settlement should therefore be more than a closing chapter. It should be a reform trigger. Nigeria should strengthen the ICRC's ability to intervene early in distressed concessions. It should improve public reporting on concession performance. It should require annual PPP risk reports to the Federal Executive Council and the National Assembly. It should standardise government handover notes across all live concessions. It should tighten the drafting of exclusivity clauses. It should make time-bound mediation mandatory before PPP disputes escalate into prolonged litigation. And after every major concession dispute, it should publish a lessons-learned report so the system improves rather than quietly moving on.
The progressive position is not to deny the progress Nigeria has already made in PPP policy. The country has institutions, laws, regulatory processes, and templates and guidelines. But the MMA2 dispute shows that the next stage of reform is not policy creation. It is institutional enforcement. Private capital does not only follow opportunity. It follows credibility. Investors want to know that contracts will be honoured, disputes will be resolved efficiently, and government obligations will survive political change.
The final lesson from MMA2 is therefore clear: infrastructure development is not only about financing projects but about building a state that can keep its word. Nigeria has the PPP framework. What it now needs is the discipline to make it work when it matters most.
