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Nigeria: Senate Committee Probes Expenditure of $78 Million Basa Fund

Sufuyan Ojeifo

14 July 2008

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Abuja — Senate Committee on Aviation is working round the clock to get to the roots of the expenditure of about $78 million realised from the Bilateral Air Service Agreement (BASA) Account under the administration of former President Olusegun Obasanjo.

THISDAY gathered from a source close to the Senator Anyim Ude-led Committee probing the disbursement and application of the N19.5 billion Aviation Intervention Fund, that only about $31 million is left in the account.

About $110 million, according to a report presented to the Committee by the Office of the Auditor-General of the Federation, was said to have accrued into the account from 1999 to date by virtue of charges paid as per the terms of the BASA between Nigeria and foreign airlines operators.

The Committee had raised question on the operation of the BASA account during its public hearing into the expenditure of the Aviation Intervention Fund, particularly the N6.5 billion Safe Tower project.

It expressed concern on why the Aviation Ministry should secure N6.5 billion loan from a bank to fund the Safe Tower project in four major airports of Lagos, Abuja, Port-Harcourt and Kano when there was a BASA account in place.

Preliminary findings by the Senate Committee, as learnt, indicated that the BASA account was used to fund projects that were not aviation sector-related.

The source said that the Committee was piqued at the N2 billion that the nation had lost through interest payment on the N6.5 billion Safe Tower Project loan from a bank.

According to him, "So far, we have lost N2 billion. As at February 2008, the interest paid was N1.4 billion and by the time the money (N6.5 billion loan) is paid, the money that would have been lost through interest payment would be N4 billion."

He said that the position of the Committee was that the fund in the BASA account should have been deployed for the purpose of executing the Safe Tower project rather than obtaining the bank loan.

The source told THISDAY weekend in Abuja that "the Committee is not happy with the Minister of Finance, Dr. Shamudeen Usman and Attorney-General of the Federation and Minister of Justice, Chief Mike Aondoakaa (SAN) for failing to appear before it to explain the operations of the account."

The Committee had wanted Aondoakaa to throw light on the legal impediments, if any, why the Senate Committee's decision in January this year that the management of the BASA account be transferred to the Nigerian Civil Aviation Authority (NCAA) in accordance with the NCAA Act 2006 has not been implemented.

The Committee, at its recent Consultative meeting with stakeholders in the Aviation sector, had directed that " the Accountant-General of the Federation is to transfer the management of the BASA Fund, to NCAA by effecting a change of signatories, (and which account should be domiciled in the Central Bank of Nigeria)."

"This action of transfer of BASA account to NCAA is consistent with Section 75 of the Civil Aviation Act, 2006. The Honourable Minister of Transportation and the Honourable Minister of Finance are to facilitate the change and ensure that action is completed within one week from 28th January, 2008."

The Committee had stated that "The Civil Aviation Act 2006 granted autonomy to the NCAA. Section 75 of the Act empowers NCAA to use any funds accruing from air services agreements solely for the development of civil aviation in the country."

The Act states that "All funds accruing from or as a result of air services agreements entered into by Nigeria, whether multi-lateral or bilateral, should be paid to the Authority and maintained in a separate account to be used solely for the development of civil aviation in Nigeria in accordance with regulations made by the Minister and Appropriation by the National Assembly."

The Committee had also wanted the Accountant General of the Federation Alhaji Ibrahim Dankwambo to give details of the money accruing to the BASA Fund from 1999 till date and its expenditures.

According to the Committee, "The matter has become urgent because of the painful revelations that Nigeria lost over N1.4 billion being interest charges on the N6.5 billion borrowed from a Commercial Bank to fund the Safe Tower project while millions of dollars were left unutilized in BASA accounts specifically meant for the development of Aviation Industry."

But the source said that "the Committee is not happy that Usman and Aondoakaa have not appeared before it despite the fact that they had been written thrice to appear over the BASA account. The Committee is suspecting the possibility of a grand design to cover up some things. But the Committee will get them to explain the issues involved."

Meanwhile, there were indications in Abuja of a heightening power play in the Presidency over two former Aviation Ministers, Borishade and Fani-Kayode who were arrested by the Economic and Financial Crimes Commission (EFFC) shortly after appearing before the Senate Committee and charged to court for criminal conspiracy to defraud the Aviation Ministry of the Aviation Intervention Fund.

The Office of the National Security Adviser (NSA) and that of the Secretary to the Government of the Federation were said to have been divided over the Captain Shehu Iyal report which indicted Borishade over the N6.5 billion Safe Tower project. Iyal is Senior Special Assistant to the President on Aviation Matters.

The Iyal Technical Sub-Committee was set up by Fani-Kayode when he took over from Borishade as Minister in 2006. The report was sent to the NSA for review and it was endorsed.

President Umaru Musa Yar'Adua was said to have approved the NSA report on the Iyal report and forwarded it to the Office of the SGF for implementation of the recommendations since July, last year.

The report had recommended that Borishade should "be caused to explain why the N6.5 billion loan from a Bank (name withheld) was used to fund the Safe Tower project contrary to the directive of the Federal Executive Council and as contained in the Due Process Certification."

The NSA had said in the report, "Notwithstanding the shortfalls and lapses associated with the conception and implementation of the Safe Tower Project, the project should continue."

The report said that the Budget Monitoring and Project implementation Unit (BMPIU) should explain why a contract of this magnitude should be awarded a certificate of Due process without sighting the Bill of Quantity with price listing of various components of the contract equipment.

"All the benefiting agencies of the Aviation industry should bear the burden of repaying the N6.5 billion loan in proportion to their allocation from the Aviation Intervention Fund," the report stated.

It added: "The former Managing Director of National Airspace Management Agency should be sanctioned for signing a repayment agreement for the loan without considering its financial implication on the Agency."

There were feelers that the Office of the SGF might have delayed the implementation of the recommendations in the report in a bid to bolster the chances of Borishade who was said to be one of those penciled for the job of Chief of Staff (CoS) to the President.

With the Senate Committee probe exposing the involvement of Borishade in the Safe Tower project, the Office of the NSA, as learnt, directed the EFCC to pick him and former Director General of the Nigeria Airspace Management Agency (NAMA), Mr. Rowland Iyayi, thus confirming claim by the Senate Committee that it did not invite EFCC to arrest them when they appeared before it.

NAMA, under Iyayi borrowed the N6.5 billion from a bank while Federal Airports Authority of Nigeria (FAAN) guaranteed the loan.

Some forces in the Presidency were said to have insisted that Fani-Kayode should also be arrested and charged along with Borishade and Iyayi.

Both Borishade and Fani-Kayode are being speculated for the positions of Chief of Staff to the President and minister respectively. Their arraignment by the EFCC over the Aviation Intervention Fund could be a set-back to the two camps pushing their candidatures for appointments by Yar'Adua.

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