Over N140 billion debt owed by the Federal Airport Authority of Nigeria (FAAN) is threatening the federal government’s plan to concession four major airports.
Recall that the federal government has opened bid for the concession of the international terminals of four airports in the country, namely: Muritala Muhammed International Airport, Lagos; Nnamdi Azikiwe International Airport, Abuja; Mallam Aminu Kano International Airport and Port-Harcourt International Airport, Omagwa, Rivers State.
But the process is presently threatened by huge debt hovering over N140 billion and also over 60 court cases. In an advertorial placed by the Nigerian Union of Pensioners (NUP), FAAN branch, and signed by the association’s secretary, Emeka Njoku, in response to the commencement of the bidding process, prospective bidders were warned of the indebtedness of the agency.
Bidders were warned that the agency has over 60 pending litigations arising from several faulty concession agreements yet to be resolved and there is also the issue of the unresolved BI- Courtney concession of Murtala Muhammed Airport (MM2).
The NUP said that FAAN owes contractors who have delivered their contracts over N15 billion, gratuities worth N3 billion and contributory pension. It was further gathered that in the past four months, about N2 billion deducted from staff salaries for cooperative contributions have not been remitted.
While more than two-year arrears of minimum wage arrears yet to be implemented and N3 billion in gratuities not paid to retired staff, the most critical aspect of the debt is the staff accrued rights of over N120 billon.
NUP, however, urged bidders to investigate not only their claims, but should also clarify from the Minister of Aviation, Hadi Sirika, how the over $1 billion loan from China for the construction of the same terminals earmarked for concession would be repaid.
Speaking to LEADERSHIP, the secretary general of the Aviation Safety Round Table Initiative (ASRTI), Group Capt. John Ojikutu (rtd), argued that at N70 to N75 billion yearly remittances, the facilities are completely undervalued.
According to him, the Lagos airport along can generate between N130 billion to N150billion, saying the government agencies are not saying the truth about revenue generated in the industry.
He further stated that though he supported concessioning, it should be in non-aeronautical facilities and services. “First and foremost, I am totally in support of concessioning but, it should be in non-aeronautical facilities and services. Aeronautical facilities that will be audited by the International Civil Aviation Organisation (ICAO), should not be concessioned because this will be used to grade us globally with other countries around the world.
We have not reached the point of concessioning the runway, the ILS and other services, we have not reached the point of concessioning the aerodrome but, non-aeronautical facilities and services can be concessioned.
Speaking further, Ojikutu said, “The MMA generated revenue alone, from 16 revenue sources, earning a minimum of N120 billion. Yet, there is a plan to concession the airport for N30 billion? Something is really wrong with all of us in the administration of the government agencies and the stakeholders.
“My research tells me that the MMA alone can generate a minimum of N150 billion yearly and FAAN can generate close to N400 billion from the 22 Federal airports it is presently managing if it can be sincere in the plan for concessions. But under the present management system and the unions, it will remain in the same cycle of yielding nothing but debts,” he said.
Also speaking to LEADERSHIP, a member, Aviation Round Table, Olumide Odunayo said his group has told the ministry of aviation that the only criteria for supporting the concessioning is ending litigation surrounding past concessioning.
According to him, several staff of FAAN that will be retrenched should also be adequately compensated if they want the concessioning to succeed. He said, “one of the conditions we gave to support the concession process is that all litigations regarding MM2 and other concessions within FAAN should all be resolved amicably before moving into the concession the government is embarking on.
“Also, this include taking care of all conditions of staff and ensuring that those to be laid off are adequately compensated. We shouldn’t believe that no staff will be laid off we shouldn’t lie to ourselves because the industry have moved forward in area of technology that the present crop of FAAN’s staff do not have the capability of such things because they are not being trained so, there is no way staff won’t be laid off, we shouldn’t deceive ourselves,” he said.
He continued, “the condition is that all litigation relating to past concession, those in court must be resolved amicably or through arbitration before we continue another set of concessions and these are the conditions we gave and there is no way it won’t affect if not amicably resolved.
“If we have multiple litigation against an organisation, the quality of people who will bid for the concession are not genuine airport managers but those out to make money or milk the process and this are the people that will come in. Look at the people that have come in for the bid the government has advertised, the time frame for the processes is a pre-arranged thing, it’s a paddy-paddy movement.”