Leadership (Abuja)
Benjamin Idowu
8 April 2008
opinion
Lagos — Today the issue on everyone's lips in the aviation industry is what has become the where about of a huge amount of money said to have been released to the industry when former President Olusegun Obasanjo was occupying Aso Rock Villa.
Not a few are in the dark over what the N19.5 billion Intervention Fund was used for. Some are sincere while some are mischief about the whole issue and those who are expected to speak are keeping mum. The Senate Committee on Aviation has been meeting with the stakeholders in the ministry and the agencies, asking questions on who did what and most especially why two of the agencies, the Federal Airport Authority of Nigeria (FAAN) and the Nigerian Airspace Management Agency (NAMA) are in cold war over repayment of loan secured at the Zenith Bank and the attendant problems. The N19.5 billions intervention fund was a response to the seemingly endless harvest of air disasters recorded, five in a spate of one year, which led to the loss of not fewer than 500 precious lives including three generations of the late Sultan of Sokoto, two distinguished senators, celebrated men and woman of God, not to mention the waste of some bright students of Loyola Jesuits, Abuja. This cycle of plane crashes eroded whatever was left of the reputation, credibility and public confidence in the aviation industry.
Obasanjo had earlier on set up what is generally called Paul Dike panel which actually took a critical study of the whole aviation and called for adequate funding having identifying poor funding as one of the fundamental problems of the industry. To begin with, the panel called for an immediate release of about N42 billion to repair the obsolete infrastructures in the four international airports to start with. The airports are located in Abuja, Lagos, Port-Harcourt and Kano. But right from the presidency itself, the implementation of Paul Dike Report began with a poor attitude. The Federal Executive Council (FEC) merely approved N19.5billion a far cry from the expectation especially with the degree of the rot that the panel brought to the fore. As if that was not enough, the sources of the fund became another controversy. Why some wanted the money to come from the Natural Resources Development Account, which was having about N47 billion as at that time, some preferred a consortium of banks instead as suggested by the Paul Dike Panel.
However, the then finance minister, Ngozi Okonjo-Iweala, through a memo to the FEC recommended the merger of the two. So, in the end it was accepted that a consortium of banks should generate N6.5billion while the Natural Resources Development Account produce the rest N13 billion, out of which N2 billion was to be used to settle the staff of the Federal Airport Authority of Nigeria (FAAN) who were laid off, again as recommended by the finance minister to the president. But again, it is curious to discover that instead of raising the N6.5 billions from a consortium of banks as agreed by the FEC, it was only Zenith Bank that was asked to produce the fund with an understanding that the whole Intervention Fund would be deposited with the Bank. So, the N6.5 billions was released to fund the TRACON and the Safe Tower projects which had become moribund since 1979. It is imperative to disclose here that in getting the N6.5 billion from Zenith, FAAN was asked to be the guarantor for the beneficiary agency, the Nigerian Airspace Management Agency (NAMA). The excuse was that the latter had no collateral for the fund. But not a few people condemned this arrangement and the fact that the uneasy calm reigning in the sector today can be easily be traced to this seemingly shady arrangement. We shall come back to this shortly. Then came the ADC disaster which led to a minor cabinet reshuffle that brought in the youthful technocrat, Chief Femi Fani-Kayode as the aviation minister on a rescue mission, swapping office with Prof. Babalola Borishade who was moved to the Ministry of Culture and Tourism. However, before this took place, the N6.5 billions for the TRACON and the N2 billion for the FAAN sacked workers had been released and spent. And again, the Rivers State Government had granted FAAN N2billion. This made the whole money amounted to N21.5 billions. The emergence of the Fani-Kayode leadership of the sector, (which is being celebrated as the restoration era of sanity to the industry as all the airline operators, local and foreign were forced to sit up putting an end to the culture of cutting corners) however added to the controversy dodging the intervention fund. One, he was not comfortable and convinced with the sourcing of the N6.5 billions especially the attached stiff conditionality and he therefore wanted the remaining N11 billions be spilled amount three banks. His reason was "I cannot allow using good money to chase bad money".
As expected, this did not go down well with the Zenith Bank and most especially when it had already got the N11 billion without the knowledge of the minister. The minister fought back and called for the fund to be released immediately but the bank in turn was only ready to pay N4.5 billion claiming to have turning the N6.5billions to a loan. This worsen the situation as the Minister ordered all the parastatals of the ministry to close their accounts with the bank and this led to a peace meeting called by the then finance minister, Esther Nenadi Usman with all stakeholders and there and then it was resolved that the UBA and the Zenith Bank shared the N11 billion equally. Investigations also revealed that the Captain Shehu Iyal Panel set up by Fani-Kayode that reviewed the TRACON Project and the committee set up by the current National Security Adviser (NSA) both endorsed the stand of the minister.
Despite the fact that the N6.5 billion had been released for the TRACON, still the Nigeria factor, would not allow it to take off until Fani-Kayode waded in and that was how the Radar coverage for Abuja and Lagos became a reality. But the contractor handling the project (AVSATEL Communications NIG.LTD) who promised to commence the second and the third phases that would cover the whole nation have failed in this regard. The unanswered question is: What is the reason for the costly delay of the implementation of the last two phases if truly N6.5 billion had been released to the contractors? It is amazing nobody talks about this again until a plane got missing. And it is widely believed among the aviation watchers that if the two phases had been completed as expected, the missing plane mystery wouldn't have been an issue at all. Then they also believed the missing plane lacked the Ground Proximity Warning System (GPWS) and the ELS which could have even helped in resolving the mystery even in the absence of the radar.
As to how the remaining N11 billion was spent, investigations in the Aviation Ministry and at FAAN revealed that it was spent on the infrastructures at the four international airports located in Abuja, Lagos, Port-Harcourt and Kano as directed. What the critics of the projects failed to do is a fact-finding visit to these airports to find out if these projects are being done or otherwise and then compare the situation now with what it was before the intervention, before calling for the heads of those who did what they could within the available fund. As the Director General of the Nigeria Civil Aviation Authority (NCAA), Dr Harold Demuren recently succinctly put it, how much is N19.5 billions amounted to in Dollars? He reminded the stakeholders of how nations who value the sector released hundreds billions of dollars to protect their airspace. Then come the idea of missing money, if the N11 billion is missing, where do the contractors handling the projects get the fund or are they doing there for free? And again, how come the N4.867 billion remains in the fund account at both the UBA and the Zenith Bank?
Among the major projects implemented with the N11 billion included the following; Extension & Asphalt Resurfacing of Runway18L/36R of Lagos Airport awarded and executed by M/S PW, (this is the second runway in the airport as Prof. Borishade had earlier did the other one while in the office) at the cost of N2.2 billion, Asphalt Concrete resurfacings of Port-Harcourt Airport, Runway 03/21 being executed by Julius Berger at the cost of N1.67 billion (this was part of the grant from the River State Government and partly that of the N11 billion, Cargo Apron Expansion at Lagos Airport cost about N500 million, Upgrading of the Airfield Lighting System to CAT III standards at Port-Harcourt which cost was put as N460 million, and a refundable loan of N69 million to fund the Presidential /Ministerial Committees set up on the reforms and a few others. So what the Senate nay the presidency should do is to reconcile the two agencies and spread the refund of the N11b to at least five years. Anything otherwise will be a colossal exercise in futility and the industry will be at the receiving end. This is because FAAN is the life wire of the aviation where others agencies are more or less funded. We must not wait for another round of disasters before doing the right thing. The presidency and the National Assembly need a synergy to find the needed panacea to this sector.
Benjamin Idowu writes from Lagos
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