Aviation: Tracing The Missing Fund
The Senate Committee on Aviation set to unravel the mystery surrounding the missing N19.5 billion Aviation Intervention Fund, AFI, released to the Aviation industry by last administration
By Magnus Eze
There is pervading fear in the Aviation industry a
s the Senate Committee on Aviation intensifies effort to unearth what has happened to the N19.5 billion lifeline released to the industry in 2006. The money was released by the immediate past administration of Chief Olusegun Obasanjo.
At a consultative meeting between the Senate Committee on Aviation and all government agencies involved in the Aviation sector, the clue into how money was spent became obvious. Some former and serving government officials were allegedly involved in the mismanagement of the fund.
The attendance at the meeting include: Minister of Transportation, representative of the Minister of Finance, Minister of State (Air Transport), Permanent Secretary, Ministry of Transportation, a representative of the Governor of the Central Bank of Nigeria, CBN, the Accountant-General of the Federation, the Director-General, Bureau of Public Enterprises, BPE, the Director-General, Bureau of Public Procurement, Senior Special Assistant to the President on Aviation Matters; the Chief Executive Officers of all the seven parastatals/agencies in the Aviation sub-sector, was indicative of the seriousness of the issues at stake.
Senator Anyim Ude, Chairman, gets Aviation Committee of the Senate had in his opening remark shortly before the meeting went into closed doors outlined the six issues to be deliberated upon at the meeting. “We now have to reassure ourselves that the money has been judiciously utilized,” he stated.
There was confusion on whether the intervention fund was a grant or loan. Although, the Federal Government had announced a grant of N19.5 billion to revamp the ailing aviation industry, after the December 2005 Sosoliso plane crash, the forum wondered how the fund ended up becoming a loan. The sum of N13 billion was said to have come from the federal government, while one of the leading banks provided a loan of N6.5 billion.
Industry sources told this magazine that the Federal Airports Authority of Nigeria, FAAN, and Nigerian Airspace Management Agency, NAMA, risk imminent collapse if they are made to repay the loan. FAAN was said to have not carried out any capital projects last year because its capital votes were deducted from source by the Federal Government as part payment for the loan. In fact, an unconfirmed estimation is that both agencies may have been shortchanged to the tune of about N5 billion by the time they finish paying back the loan. FAAN currently repays N222 million monthly to the commercial bank.
A communiqué arising from the meeting confirmed that the participants were dissatisfied with the application of the #19.5billion Aviation Intervention Fund and directed that a meeting of the officials from the Presidency, Ministries of Transportation and Finance, the relevant Commercial Banks, Aviation Parastatals, Budget Department, Debt Management Office and the Senate Committee on Aviation be convened to resolve all the issues surrounding the source and application of fund.
Our investigations showed that two former Ministers of Aviation, some presidency officials and a former managing director of FAAN have questions to answer about the N19.5 billion. Members of the defunct Presidential Implementation Committee of the fund are also expected to make some clarifications to the Senate Committee on Aviation.
The communiqué indicated that failure to resolve the issues may lead to a Senate public hearing on the matter.
The dilapidated infrastructural facilities at the nation's airports during a recent tour by the Senate Committee on Aviation, revelations at the budget defence and mountains of petitions on various issues in the industry had engendered the meeting.
One of such issues was the poor handling of the safe tower project; part of the major reasons for the Intervention Fund. On the site assessment of the airports, where the safe tower projects were going on, especially, the Mallam Aminu Kano International Airport showed some level of un-seriousness on the part of those behind the projects. The abysmal performance of the contractors was reportedly decried by a highly placed ministry official who told the forum that “money was paid, yet over one year after, the job has not been done.”
Continuing, he queried, “Why was the money paid in the first place, if there is no fowl play?”
Another contentious matter that was tackled by the consultative meeting was the Bilateral Air Services Agreement, BASA Fund in the custody of the Federal Government. The Civil Aviation Act 2006 granted autonomy to the Nigerian Civil Aviation Authority, NCAA. Section 75 of the Act empowers NCAA to use the funds accruing from air services agreements solely for the development of civil aviation in the country.
According to the Act, “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.”
Newsworld could not confirm how much was in the BASA account, but an insider at the forum put it at over $50 million. Officials of the Finance Ministry had promised to perfect handing over of the account to NCAA within one week.
“…the Accountant-General of the Federation is to transfer the management of the Bilateral Air Services Agreement, BASA Fund to Nigerian Civil Aviation Authority, NCAA, by effecting a change of signatories. This action of transfer of BASA account to Nigerian Civil Aviation Authority 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 communiqué stated.
Some respite may come the way of parents, relations and dependants of the victims of the Bellview, Sosoliso and ADC air disasters as the forum had directed the Federal Ministry of Transportation (Air Transport), the Nigerian Civil Aviation Authority, NCAA and the concerned airlines to resolve all outstanding issues and pay compensation to victims of the 2005 and 2006 air disasters within two months.
To avoid similar ugly tales in the future, the National Insurance Commission, NAICOM is expected to shortlist reputable insurance companies that private airline operators in Nigeria would be advised to deal with.
Interestingly, a rumour making the round that certain persons in the Transportation Ministry were frustrating the privatization of Skypower Aviation Handling Company, SAHCOL, by the BPE was put to rest.
This magazine was told that privatization bureau assured the forum that there was no going back on the process. According to the BPE, advertisements for the privatization may be placed this month, while the entire process would span six months beginning from February 1st, 2008.
Meanwhile, in line with Section 12 (2) of the Civil Aviation Act 2006, the Ministry of Transportation (Air Transport) was directed to come out with a new formula for Ticket Sales Charge distribution amongst the Parastatals in Aviation Industry to ensure fairness and equity.
The current sharing pattern is: NCAA 58 percent, NAMA 23 percent, NIMET 9 percent, Nigerian College of Aviation Technology, 7 percent and Accident Investigation Bureau 3 percent.
Industry watchers had anticipated an outright public hearing on the N19.5 billion Intervention Fund. However, Newsworld gathered that it may be the last option, at least to reassure Nigerians that there is no cover up on the side of the Senate Committee on Aviation.