Furore Over Aviation Debts, Projects

Furore Over Aviation Debts, Projects

Wednesday, June 18, 2014 6:17 pm

By Simon Ateba

The Nigerian aviation industry has again been thrown into turmoil following revelations that the Ministry of Aviation is broke and many of its projects have now been suspended

Tension is rising again in the Nigerian aviation industry over projects approved or carried out by former Aviation Minister, Stella Oduah. There is also mounting outrage over billions of naira woth of debts incurred while Oduah was minister.

Nkeiruka Onyejeocha, House of Representatives Committee chairperson on Aviation, addressing journalists in Lagos recently

Nkeiruka Onyejeocha, House of Representatives Committee chairperson on Aviation, addressing journalists in Lagos recently

On 4 June when the House of Representatives committee on Aviation visited project sites at the Murtala Muhammed International Airport in Lagos, the verdict was damning. Many of the projects embarked upon by Oduah did not follow due process and were even riddled with irregularities that pointed to deception, concluded the committee’s chairperson, Nkeiruka Onyejeocha.

The unflattering verdict came even as the lawmakers ordered the Nigerian Civil Aviation Authority, NCAA, to return the two bullet-proof cars it purchased last year at the hefty sum of N255 million allegedly for the personal use of Oduah. The committee reminded NCAA that it had recommended in its report last year the return of the over-priced cars and the refund of the money by Coscharis Motors Ltd.

“What we said about the bullet-proof cars is that the contract should be cancelled and that NCAA does not have any business keeping the cars. It should be returned to the supplier and then recover our money,” said Onyejeocha who led other federal lawmakers on an oversight function at the Lagos Airport.

Onyejeocha was reacting to disclosures by the Acting Director-General of the NCAA, Benedict Adeyileka, that the two cars remain parked at the NCAA headquarters in Abuja and be serviced on a weekly basis.

“The bullet-proof vehicles are currently parked at our headquarters in Abuja. To the best of my knowledge, yes, the vehicles are working. We turn the engine over on a weekly basis; we have a maintenance programme for it and a storage programme for it,” Adeyileka said.

The purchase of the expensive and overpriced cars last year triggered a nuclear blast of public outrage and condemnation and invited the attention of the House committee on Aviation.

At the end of the House probe, the committee recommended that President Goodluck Jonathan review Oduah’s appointment. She was relieved of her duties in February and there have since been allegations of huge debts and uncompleted projects left behind.

Late in May, Samuel Ortom, supervising Minister of Aviation, revealed that the Ministry under Oduah accumulated hefty debts and as a result, projects embarked upon could no longer be completed while many others had to be suspended. Because of the huge debts, he said, contractors can no longer be paid and newly approved contracts can no longer go ahead. Some reports put the total debt of the Ministry at N174 billion.

He explained that some loans obtained for the construction of four cargo terminals in the country had accrued interests amounting to billions of naira. He said it was in the best interest of Nigeria to settle the debts and review some contracts. In clear and plain language, the Ministry of Aviation is neck-deep in debts for projects that are yet to be completed.

Oduah became minister of aviation in 2011 and was removed in February this year. Before her removal, Oduah had embarked on many projects, including the much celebrated re-modelling of 11 Nigerian airports under some kind of airport cities she named aero-tropolis. The Ministry allegedly went on a borrowing spree, sometimes without the approval by the National Assembly or even the Federal Executive Council.

Revelations that the Ministry was broke and projects had to be abandoned seemed to have prompted the House Committee on Aviation to embark on some oversight functions.

At the Lagos Airport on 4 June, the committee alleged some projects were not only sub-standard for the millions they were meant to gulp; many of them did not also follow due process. Onyejeocha, the committee chairperson, said a terminal building being constructed in Lagos by a Chinese company looked substandard and too small. In addition, other members noted that the remodeled Murtala Muhammed International Airport terminal was leaking and the cooling system was not functional.

Onyejeocha also alleged that an agreement between the Federal Airports Authority of Nigeria, FAAN, and First Bank Nigeria plc. was not in the best interest of Nigeria.

FAAN in 2012 signed an agreement with First Bank to provide automated services for the agency. The agreement followed the controversial eviction of Maevis Nigeria Ltd by FAAN, despite a court order.

Following the agreement, First Bank then hired Aviation Technology Company, AVITECH, to handle the automation for FAAN.  Many had accused some officials of using First Bank to siphon money, although the allegations have not been proven.

The automation was for easy and transparent transaction and was meant to facilitate appropriate billing for the Ticket Sales Charge and Cargo Sales Charge. AVITECH was meant to provide at the end of every flight, billing which covered the following components: flight number, flight date, ticket number, ticket class, flight route, originating country, currency of sale, basic fare, YQ, security tax, airport tax, total fare and rate of exchange.

Some noted that surprisingly, even though AVITECH was providing services for FAAN, there was no direct relationship between FAAN and the firm because it was hired by First Bank. Reps members said the arrangement is fraudulent and faulty and should be reviewed.

“We do not have a direct relationship with AVITECH,” Saleh Dunouma, FAAN managing director, who assumed office in March, said. He said FAAN has a relationship with First Bank.

The lawmakers said the arrangement must be terminated. “If Maevis was bad, then AVITECH [deal] is worse,” said Onyejeocha.

She also called on FAAN to release the names of those behind the Aero-tropolis projects, a type of airport cities Oduah wanted to build to attract businesses in the airports. She said there were two companies handling the projects but nothing is known about them.

The House also called on the Commissioner of the Accident Investigation Bureau, AIB, Felix Abali, to make public recent accident reports and recommendations the  commission made to the Federal Government. Abali said the recommendations are ready and will be released to the Ministry of Aviation, which will in turn release them to President Jonathan who will release them to the general public.

The lawmakers also called on FAAN to revoke a contract it has with Landover Company as the manager of the Abuja terminal. Onyejeocha said it was inconceivable that an airline operator was also a manager of a Federal Government terminal.

Before departing for Abuja, the lawmakers left about 10 questions for each of the aviation agencies and ordered them to provide written answers within five working days. Their answers had not been made public at the time of this report.

But Onyejeocha and her colleagues had barely left Lagos than they came under attacks. Dr. Daniel Tarka, Special Assistant to Oduah, said allegations of debts left behind by Oduah were completely false.

“Our attention has been drawn to media reports that the Ministry of Aviation under the immediate past Minister, Princess Stella Adaeze Oduah incurred a staggering debt of N174 billion under the aviation Master Plan. Nothing can be further from the truth.

“While we commend the National Assembly, especially the Senate and House of Representatives Committees on Aviation for supporting and keying into the aviation Master Plan, it is however, imperative to put the records straight on the alleged indebtedness, the loans obtained during that period and the mode of repayment,” Tarka said.

He said the agenda for the transformation of the aviation sector which warranted the conceptualisation of the Master Plan was for the industry to be fully self-sustaining by 2016; and begin to yield additional revenue for government through improved Internally Generated Revenue, IGR.

In order to achieve the objectives, he added, Oduah embarked on the upgrade and rehabilitation of the 22 federally-owned airports across the country under the Airport Remodelling Programme, ARP.

“As part of measures to effectively implement the Master Plan, several sources of funding were identified. These include, (i) Annual budgetary allocations; (ii) Internally Generated Revenue (IGR), including airport development levy and security surcharge; (iii) Bilateral Air Services Agreement (BASA) funds; (iv) Low interest loans, amongst others.”

He added that besides the statutory approvals, the ministry designed the projects with in-built capacities to generate funds without having to place any further financial burden on the Federal Government within the period.

“It must also be stressed that these projects were not designed to start and end in 2013, and so, were not tied to the 2013 budget alone,” he concluded.

If Tarka was diplomatic, Emmanuel Emeka, a public affairs analyst from Isuikuoto Federal constituency, was not. He accused Onyeojeoka who represents Isuikuoto/Umunneochi Federal constituency of volte-face and lying.

What was shocking to many observers, according to Emeka, was Onyeojeoka’s volte-face over the Aviation Master Plan and in particular, the Airport Re-modelling project spearheaded by Oduah.

“Onyeojeoka now says she does not know anything about the Aviation master plan, ditto for the Airport re-modelling project. She has now ‘realised’ that the remodeling project did not follow due process.

“Yet it was common knowledge in Aviation and legislative circles that our charming chairman of the Aviation committee of the House of Representatives was carried along in the implementation of these laudable programmes by the erstwhile Aviation minister. And as a matter of fact she eagerly participated and took a prominent position at the commissioning ceremonies of several of the remodeled airports round the country last year,” Emeka claimed in an opinion article.

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