Senate to award zero allocation to aviation in 2017 budget

The Minister of State for Aviation, Mr. Hadi Sirika

Summons minister over failed MMA2 concession agreement 
Senate House Committee on Privatisation has disclosed that the aviation sector will get zero allocation in the 2017 budget proposal that the president will present soon.

The committee, led by its chairman, Senator Ben Murray-Bruce, said that the plan to concession the airports and readiness of private investors to assume responsibility means that the Federal Government would no longer need to commit revenue to run the facilities.

Meanwhile, the committee has also said it would summon the Minister of State for Aviation, Hadi Sirika, to explain why the Murtala Muhammed Airport II (MMA2) terminal concession agreement failed and still not resolved till date.

The botched agreement, according to them, remains a bad reference point for future dealings with the Federal Government and would make no sense continuing with privatisation of other airports without first resolving the MMA2 impasse.

Murray-Bruce explained that from his understanding of happenings in the aviation sector, the private sector is able and willing to fix problems in the industry.

He, therefore, said: “I will lobby my colleagues to give aviation zero allocation henceforth. There is no point giving them money where private investors can do better. When you don’t give them money, then you’ll solve a lot of problem.

“The advantage is that the billions we could have spent in aviation can now be spent in education, healthcare and in the north east where children are hungry due to the catastrophe of the Boko Haram. So, we’ll give up this economy completely to the private sector as it is done in other parts of the world,” he said.

Murray-Bruce, shortly after the tour of the MMA2 terminal in Lagos recently, said underlining such project, and others like it, were legally binding agreements reached by the Federal Government and private investors.He said Nigerians need to know why agencies of the government would not honour agreements they freely entered and onus is on the minister to explain.

Recall that the Federal Airports Authority of Nigeria (FAAN) and Bi-Courtney Limited in 2003 reached a Build-Operate-Transfer concession agreement on MMA2 terminal that was burnt in 2000. Shortly after the terminal was rebuilt, years of operations (15 or 35years), before it is transferred to FAAN, became a subject of protracted legal battle between FAAN and Bi-Courtney.

While Bi-Courtney insisted on 35, FAAN in disagreement began to violate the agreement with the construction of the General Aviation Terminal (GAT) to rival the MMA2, prevention of the Regional Operations to take off at MMA2, among others that led to loss of revenue to the concessionaire.

Murray-Bruce said: “We have listened to Bi-Courtney’s side of the argument and we will summon the Minister of Aviation to the Assembly to present his side of the argument. It is not enough to tell me what FAAN is doing or not doing. FAAN is a parastatal of the ministry of aviation and there is no point talking to FAAN on this,” he said.The chairman said that the invitation was ultimately to broker a solution to the problem, which past committees had not been able to address.

He said further that the Senate would ensure that agreement signed by government are henceforth honoured, otherwise officials that participated in the deal are tried for sabotaging the Federal Government.

His words: “Either you honour the agreement or prosecute all those that signed the lousy agreement on behalf of the government. You have a choice. We already raised the issue with the Attorney General and we will also raise it with the minister. We want to protect the integrity of the country and of the government of Nigeria.

“We will not spend tax payers’ money on businesses that can be run by private sector while Nigerians are dying of hunger. This is as fundamental as it can get. We are gradually reducing cost of governance.

It is time for aviation, but we will not allow the process to continue until they have solved the problem with MMA2 agreement. You cannot tell me that you will concession four more airports while the first one you concession is a disaster. You have to fix it first.”

Member of the committee, Senator Yahaya Abdullahi, who was impressed with the MMA2 terminal, though still underutilised, said that they would make their findings known to Senate and also draw attention of the Committee on Aviation to its plight.

Abdullahi said: “What I’ve seen in this airport is disturbing. There is a whole part of it that is not been used, while a part is crowded. It is not acceptable that agreements are not been honoured. We are not here to find fault, but to say that agreements, when signed, must be honoured and facilities utilised to the maximum.” 

Chief Executive Officer of Bi-Courtney, Capt. Jari Williams, lamented that the company has continued to lose revenue on daily basis with government officials failing to honour the pact.Williams urged the committee to prevail on FAAN to comply with laws of the country, various court rulings and arbitration proceedings and recommendations regarding the concession agreements.

He said, as already determined by the Court of Appeal, the Federal Government and FAAN should respect the guaranteed clauses, which states that all scheduled domestic flights in and out of FAAN’s airport in Lagos State shall, during the concession period, operate from the terminal and Bi-Courtney is entitled to all revenues accruing from specified sources of income ceded to the concessionaire under this agreement