For the Federal Airports Authority of Nigeria, concessioning seems to be signalling doom
By Funsho Balogun
Recently, the Federal Airports Authority of Nigeria, FAAN, clamped down on airlines owing it accumulated debts over the past years. The aviation parastatal was forced to ground the operations of these airlines as well as some key concessionaires, an action backed by a directive from the House of Representatives Committee on Aviation, nudging FAAN to use all legitimate means to recover money owed it. While the move promptly squeezed substantial sums out of the airlines into FAAN’s coffers, it has also exposed concessioning as a medium of revenue leakage through which earnings due to FAAN are grossly misappropriated.
The cancellation of a concessioning contract involving PAN Express blew open the fact that FAAN had for long been constantly short-changed concerning remittance of funds by PAN Express. PAN Express Limited, a firm which was in charge of handling port charges at the cargo terminal of the Lagos Airport, was supposed to be delivering N60million monthly to FAAN. However, the firm had always been coming up with only N5million at the end of each month, a far cry from the agreed sum. Consequently, as at February 2009, PAN Express was indebted to FAAN to the tune of N607million. With the contract cancelled, however, FAAN workers took over the collection of the charges and about N20million is currently being declared as money generated on a weekly basis. The discovery has strengthened the resolve of FAAN workers that concessioning, in any form, must be severed permanently as it is apparently not in the interest of FAAN and the entire aviation industry. Another firm fingered as guilty of paying to FAAN sums below concession agreements is Maevis Nigeria Limited.
The concessionaire is in charge of airlines revenue for FAAN, provides airlines with the printer required for seamless business transactions at the airport. It prints manifests, boarding passes and other materials required by airlines for enhanced operations at the Murtala Muhammed International Airport, MMIA. Maevis has also installed modern signage posts, in conformity with International Air Transport Association, IATA, standards. Tunde Fagbemi, the Managing Director of Maevis Nigeria Limited, made glowing remarks about the impact of Maevis’ activities at the airport in a recent interview. “Initially, those who enjoyed the services of FAAN owed them huge debts, but with our coming in, it is now easier for FAAN to collect their money from the debtor through us. This is done through the Electronic Fund Transfer, EFT, which has made fraud almost impossible. The whole transaction is now very transparent,” he boasted. However, the National Union of Air Transport Employees, NUATE, has punched holes in the transparency claims of Fagbemi being touted on the EFT platform. A statement released by the union showed enormous difference in records of revenue generated by Maevis when compared with revenue collected by FAAN.Maevis took over revenue matters at the MMIA based on an agreement it had with FAAN on 1 August 2008. But right from the outset, discrepancies began to manifest in records. For instance, througout the month of July 2008 there were no records to the effect that any amount was collected, despite the fact that activities that normally translate to money rolling in for FAAN never ceased all through the period. What poses a bigger question is the steep difference between generated revenue by Maevis and what was collected by FAAN. In August 2008 revenue generated stood at $375,936.54, while revenue collected by FAAN was a measly $10,802.86. In September, $446,672.11 was generated, with revenue collected being $101,720.19.
In October, $323,297.26 was generated and $116,315.63 was the sum of collected revenue. November and December 2008, however, witnessed a considerable adjustment, with figures of collected revenue suddenly rising close to revenue generated figures. In November, for instance, $339,750.59 was generated and $229,433.02 collected. Miffed about the figures, G.C. Ogbuji, the Secretary-General of NUATE, revealed that at various meetings the union held with the FAAN Management, the Authority consistently maintained that Maevis had refused to pay the differences into FAAN’s account. Meanwhile, Maevis insists that it has paid all the money to FAAN. In NUATE’s view, the buck-passing smacks of a deliberate attempt at orchestrating confusion which will stall investigation into where the dollars have disappeared to. This is moreso as NUATE and FAAN had earlier reached an agreement that a Revenue Task Force Committee between the union and the Authority be set up. And though the committee is on ground, FAAN has denied it the impetus to move into action.
Other concessionaires at the MMA include Ambed Nigeria Limited, I-cube West Africa, Terminal Zero, Afromedia, Promoworld and Bilafary Enterprises. In the same fashion, none of the concessionaires has proved to be impressive in its remittance of funds to FAAN. Ambed, for instance, has continuously been defaulting in payments due to FAAN on cargo coming into the airport from domestic airline operators. Despite entering into a N1.2million monthly contract with FAAN, it usually remits about N800,000 or less. As for I-cube, FAAN should ideally be raking in N40million monthly from the concessionaire in charge of the tollgate. But the company has hardly been able to meet up with the agreed amount.
Although the concessionaires have generally gained notoriety for non-compliance with signed agreements, NUATE insists that FAAN on its part has a lot to explain on why revenue generated through bills sent to airline operators, cargo, and about 15 revenue points from which FAAN should be making about N4billion monthly, fall below expectation. It has been pointed out that this untoward development did not begin with the prevailing concessioning era but dates back to the years when FAAN had failed in its duty to collect appropriate revenue even before the mass concessions. The situation is more perplexing as FAAN’s shortcoming has boiled down to late payment of staff salaries, rampant decay of airport infrastructure, lack of maintenance and non-implementation of welfare packages of workers. Ogbuji claims that evidence abounds in form of official receipts issued by FAAN to airline operators and other concessionaires that easily proves that FAAN can pay staff salaries without breaking any sweat, although the reverse is presently the case. The current scenario playing out in the aviation industry is being perceived in some quarters as a throwback to the years of the killing of former Nigeria Airways, when revenue generated got paid into accounts of individuals, leading to the liquidation of Nigeria Airways, as revealed by the then Nwazota panel.Is FAAN on the same road?
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Yomi
17 May 2009 18:25Would someone probe the grounded/sold aircrafts of the Civil Aviation Flying unit,, they were to have being used for Calibration of the Nation’s airspace,, something being contracted out to another African country,, when are we going to learn the use and proper maintenance of expensive equipments bouth with taxpayers money and nobody is being held accountable .
Yomi
17 May 2009 18:26Would someone probe the grounded/sold aircrafts of the Civil Aviation Flying unit,, they were to have being used for Calibration of the Nation’s airspace,, something being contracted out to another African country,, when are we going to learn the use and proper maintenance of expensive equipmentsbought with taxpayers money and nobody is being held accountable .