The Minister of Aviation, Princess Stella Oduah, whose ministry is seeking a $500 million external loan to develop four airports Tuesday appeared before the House of Representatives Committee on Debts, Aids and Loans to defend the proposal, which is contained under the Medium Term External Borrowing Plan of 2012 to 2014.
The proposed loan is to be sourced from the China Export Import Bank. The loan, according to government, will be used for the upgrade of four international airports located in Lagos, Abuja, Kano and Port Harcourt.
Chairman of the House Committee on Debts, Aids and Loans, Hon. Adeyinka Ajayi, said the committee was interested in knowing if the loan complied with the Fiscal Responsibility Act.
Ajayi also demanded to know how much of the total loan would be spent on each of the four airports as well as to ascertain if Environmental Impact Assessment had been carried out preparatory to the execution of the projects.
According to the minister, the facility is a concessional loan that will last for 25 years. It has a ten-year moratorium and will be given at 2.5 per cent interest rate.
She said the loan had become imperative because of the need to construct new international terminals at the four airports to make their facilities conform to international standards.
She explained that airports across the world are no longer places used merely for parking of airplanes but a business hub with a cluster of business activities.
The lawmakers said while they were not opposed to the loan in principle, they were concerned about the use of some local contractors whom they accused of doing shoddy jobs at some of the airports.