Weeks after the committees on aviation of the National Assembly claimed that debts incurred by the Ministry of Aviation in the course of terminal remodelling and building of perishable cargo terminals came to a whooping N174bn, the Federal Airports Authority of Nigeria (FAAN) during the week, explained how the money was disbursed to the contractors, the actual amount of the project and the debt.
FAAN in its defence in a document made available to BusinessDay, explained that the “debts accruing from the remodelling of airport projects was inflated by N26bn from the actual debts of N148bn to N174bn, adding that the projects were in three phases.”
The contract value of phase one, according to the Authority is N12.81bn, total amount already paid is N11.22bn, while there is still an outstanding balance of N1.58bn.
For the phase two, the contract value is put at N93.43bn, while the total amount disbursed to the contractors is N53.97bn leaving a balance of the N39.50bn.
The third phase of the projects which FAAN said is still at infant stage has contract value of N63.02bn with N4.21bn as total amount already paid while N58.81bn is outstanding.
“The sub-total of the debts therefore is N99.85bn, which when added to the debts already approved by the Federal Executive Council (FEC) at N48.37bn brings total outstanding debts to N148.23bn. This amount from FAAN differs from the N174bn that was declared by the Senate Committee on aviation by about N26bn,” FAAN claimed.
Meanwhile, it explained further that “Stella Oduah, former minister of aviation in collaboration with the Ministry of Finance, the Central Bank of Nigeria (CBN) and with the consent and endorsement of the Senate and House Committees on Aviation made fiscal provisions for the funding of these projects which was later abandoned by the Ministry of Aviation, hence the accrual of the debts.
“The projects were being funded from three sources: accruals from the Bilateral Air Service Agreement (BASA), appropriations and internally generated revenue and this year there was plan to introduce other sources of funding which include airport development levy and security surcharge.
“Funding came from approval for Presidential priority projects on February 21, 2011 for the utilisation of the sum of $60m in the BASA fund. This was submitted to the National Assembly for appropriation to be supplemented by a further N14. 6bn from the internally generated revenue (IGR) of FAAN.
“At the same period the Coordinating Minister of the Economy and Minister of Finance conveyed approval for the aviation sector for the procurement of critical infrastructure such as perimeter fencing, airfield lighting, water hydrant systems and firefighting equipment as follows: N43bn from the 2013 budget (as proposed); N25bn from the BASA fund and N44bn from sources to be identified by the Ministry of Aviation, totalling N112bn respectively,” it added.
But the available funds which have not been secured by the Ministry of Aviation, according to FAAN include “the current balance of N175bn Power and Aviation Intervention Find (PAIF) from which N75bn was supposed to be allocated to the aviation sector that is still outstanding.
“Then there is the additional funding of N25bn from BASA fund to be made available for urgent infrastructure upgrades and currently the BASA fund with accrued revenue of about N30bn, which is not yet utilised.”
Meanwhile, industry analysts argued that if these funds were accessed by the Ministry of Aviation, it would have liquidated actual N148bn debts.
They advised that the Ministry of Aviation should speed up the automation process of the revenue sources of the FAAN in order to boost the internally generated revenue of the agency which is planned to fund significant part of the projects.
Sade Williams
