Oduah: Intervention Fund Will be Judiciously Used for Aircraft Acquisition

26 Jan 2013

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Stella Oduah

The Minister of Aviation, Stella Oduah, spoke to journalists after inaugurating the General Aviation Terminal (GAT) at the Nnamdi Azikiwe International Airport, Abuja by the Deputy Senate President, Senator Ike Ekweremadu, last Monday. Chinedu Eze, who was there, presents the excerpts:
What is the update on the national carrier? How soon should we expect the 30 aircraft the government plans to acquire for domestic operators?
We were the ones who started the clamour for the national carrier because we believe it is the right thing to do and we have gone very far; we are waiting for the final approval on the transparent way the core investor would be brought in and the rest of the processes. As soon as we get it then we are good to go. When exactly I do not know but I am hoping that by the end of February we should have gone to the papers to advertise for core investors to indicate their interest. With regards to the 30 aircraft, the essence of that is to have proper and adequate utilisation of the intervention fund. We all knew what happened before; we don’t want a repeat of that. And so the 30 aircraft would come, hopefully more than 30 would come; it depends on the interest the manufacturers would show. When is it going to come? Very soon. If the plan is not well dotted and approved, then we cannot go ahead.

Mr. President has graciously approved the platform we will use; we still have to work with federal government agencies like the Central Bank of Nigeria in order for us to go ahead. So we are almost at that last stage again. Once we sought things out and get CBN final approval, we will commence. What we want to do is going to be efficient; very efficient. That is the key word; whether it is going to be Boeing or Embraer, we do not know now, but we have certain yardsticks that whichever aircraft type we use must be efficient, the fuel consumption also must be very, very efficient; the manufacturers must back us up with maintenance.
So those are the very key things that will guide us on who we decide to buy from.
When you assumed office you constituted a committee to look into the price of aviation fuel so that airline operators will not be running at a high cost because that is what is really eating deeply into their cost of operation. What happened to that committee?

The committee has come up with their recommendations; we have gone through their recommendations and we have made our own recommendations. It doesn’t stop on our table; what we need to do we have done, so we are waiting for a response of that, but having said that, we told you in what form that will come.

We will work in conjunction with the Nigeria National Petroleum Corporation (NNPC) which is part of the way forward. We have selected and approved vendors, who will guarantee us and allow us to benchmark the purchases because that is what it is. In petroleum products, you have to buy in advance and that means that there has to be a settling process and a buying process, which takes time because the people you are buying it from have to agree; you that are buying have to agree that you are hedging the purchases and until we get this done it will not work.

And then more infrastructures will have to be put in place. For instance, if you are in Yola you need to have a depot there for, not just aviation fuel; but guarantee stock that when finished will be replenished on time and that gives you price control on the product availability and the price. Nigerians should look forward to competitive pricing system that will ensure they pay what they are supposed to pay. Nothing more, nothing less.
What is the plan of the Federal Government to build international terminal in Abuja?

The international terminal is still going through remodelling and rehabilitation. What we have are A and B sections, the C is still going to come, the C is actually international part of it and by December it would have been ready. What we are using now is completely domestic and not international terminal.

When do you plan to install airfield lighting in all our airports?

is a priority for us in 2013 and beyond. We will install airfield lighting in all our airports.
On these cargo terminals, which farm produce will you chose for export?
We are working with Ministry of Agriculture which responsibility is to choose the crops, to choose the site and the team we are going to work with and the location of where the processing unit will be key to us and proximity of that to the airports to the cargo terminals is very, very important.
For the state government, we are doing a tour this year to have an expose for them to understand the economic benefit of perishable cargo and how that will enhance their earning capacity and how that can transform their rural development process. But everybody is in tune with this because it is the greatest; it is the best rural transformation plan that singularly give you access to international market; changes your naira earning to dollar earning; most importantly creates employment and has huge value chain along the line that will create huge wealth for not just the state but for the local government. And all of us should be part of it.
How did you plan this project and how much is the cost of the new GAT?
I know that when you want to build a house you have to design it; you have to conceptualise it, you do your schematics and then do your drawings, so there is no intricacy at all. The truth of the matter is that we ought to have a GAT terminal. The GAT terminal supports general aviation and before now it was not in existence in Abuja and that part of air transport business is growing and government will like the business to grow far more than it has grown and the only way it could be encouraged is to provide the infrastructure, the policy and the procedure to drive that particular business and that is what we have done.

We have also finished the general aviation policy and hopefully by next week, we will have meetings with the private jet operators, thereafter we know the policy that guides what they are supposed to do, how they are supposed to do it and because we don’t have a lot of grey areas in general aviation policy, so our meeting will make us agree on some issues that will make them operational.

On cost, it is difficult to give cost but I want to say that it is a fraction of the cost of the GAT project in Lagos- that is, N648 million. And this is phase one, the phase two is coming after this. We are waiting for the Nigeria Air Force to vacate their premises so that we can commence the phase two of the project because it really should be more elaborate than this. Currently we have about 50 private jets; we are estimating that by next year we are tripling that, so if we are going to do that we need a much larger GAT than this. At the end of the projects, the cost will be in the neighbourhood of N500 million or below; nothing more than that.
What are you going to do with Sky catering, which used to be a subsidiary of the defunct Nigeria Airways?

There are issues that have been affecting that particular agency that we have not been able to rectify. When Nigeria Airways was liquidated, there seemed to be some documentation error; that catering aspect may have been part of it, so the legal team are looking at it to see how it can be resolved. Until that is done, there is nothing we can do about that, but our interest also is to ensure that we remove that part of it and resuscitate it as an on-going business. We need to have catering as an on-going business for the airline operators.

When Aviation Operators and Government Work at Cross-purposes
Over the years the aspirations of aviation industry stakeholders seemed at variance with the policies and actions taken by government to develop the sector. Chinedu Eze writes on the need for synergy between operators and government for the development of air transport in Nigeria
Before Nigeria Airways Limited (NAL) was liquidated, the Federal Government’s goal was to privatise it. The aviation labour unions vehemently opposed that decision of the government. The workers under the aegis of the unions fought the Ministry of Aviation and the presidency until government decided to liquidate the national carrier.

When it was liquidated, government did not pay the workers their entitlements and with its liquidation hundreds of Nigerians lost their jobs. It took several years before the workers were paid their entitlements and while they were in limbo, several starved to death. Some were unable to pay their children’s school fees; many lost their accommodation and others became frustrated.
But the greatest harm that came out of decision to liquidate the airline was the loss of indigenous manpower in the aviation industry; the loss of the dominance of air transport in West Africa by Nigeria; and the loss flagship carrier to fly Nigeria’s flag.
The Blame Game
Today, the gladiators who played a role opposing the privatisation of the airline have exhausted all the excuses to justify their action and have shamefully admitted that they would not have opposed the government’s initial plan.

For instance, when Nigeria Airways was still thriving, the management once introduced electronic ticketing and installed computers to transparently issue boarding passes so that the racketeering with respect to boarding passes would be put to an end. The objective was that the airline would be able to boost its revenue by plugging that loophole. But the workers, through their unions, opposed it and the situation came to a head when after the first day the system was used, which was a weekend, by the time work resumed on Monday, the computers were destroyed. That put an end to that initiative.

Recently, the Federal Government wanted to automate all the revenue sources of the aviation parastatals with the objective of plugging loopholes through which substantial revenue is stolen by individuals. But the unions opposed this plan on the premise that automation would not boost revenues of the agencies and provide the needed data for the future development of the industry.
Workers’ Opposition
These are instances where most of the time the interest of government and that of the stakeholders are diametrically opposed. But it is not all the time that government formulated good policies or initiatives. The last privatisation exercise in the aviation industry by government was a disaster. The major reason why it failed was that government did not have a legal framework to govern the agreement. It did not establish a platform for public, private partnerships (PPPs), which had it touted for a long time.

At implementation it failed because agreements were written without uniform regulation and that gave the investors the opportunity to sneak in adverse clauses that would have imperilled the aviation agency, the Federal Airports Authority of Nigeria (FAAN), as its facilities and services were taken over by greedy investors who wanted to maximise the advantage they gained unscrupulously.
The opposition of the agreements by the workers was hailed by many people in the industry who described the protests as a belated effort, because in the first place, the workers should not have allowed government to take off with such lopsided privatisation process.
Fractured Relationships
X-raying the relationship between the stakeholders and government, many industry observers say that it nosedived in recent times since the appointment of the present Minister of Aviation, Stella Oduah.

Oduah would go down in the history of the aviation sector as one of the most criticised ministers ever appointed. But aviation analyst and the former president of Nigeria Cabin Crew Association, Olu Fidel Ohunayo, told THISDAY that for Nigeria to have robust and growth oriented aviation sector, government must consider the input of the stakeholders and critics.

He noted that although most often government does not acknowledge it but it relies on the opinions and criticisms of the stakeholders to make its policies.
Ohunayo also noted that every minister that was appointed has image makers, whom he referred to as marabouts that tend to shield him or her from knowing the truth or misinterpreting and deluding the minister, but such marabouts always failed because the stakeholders cannot be stopped from talking.

“It is very clear that government listens to the stakeholders. Its top officers listen to the stakeholders but they don’t give them credit. It is not as if the stakeholders are pursuing their individual goals; they are pushed to criticise what is not going on in the industry because they want to improve the system for the overall benefit of the travelling public.”

Ohunayo stated that the stakeholders expose what is wrong in the industry with the hope that government would notice and improve the situation. He said that the issue of air safety has been on the front burner over the years and because certain action that should have been taken was not taken, Nigeria again paid dearly for it.
He said that for Nigeria to attract investors it must have to make the aviation sector attractive and lucrative by ensuring that air transport is safe, have the needed modern facilities and effectively enforce regulations as enshrined in the 2006 Nigeria Civil Aviation Regulation as amended.
“What have we done to make the investors willing to come to Nigeria and invest? What we have achieved with the Category 1 rating given to Nigeria by US Federal Aviation Administration (FAAN) is that our airlines can go to the United but we have not used it to attract any partnership with foreign airlines. The stakeholders make the Minister stand on her toes.”

He also lamented that Nigeria is losing so many opportunities in the aviation industry to other African countries, noting that some advanced countries have been partnering with some African countries to float indigenous airlines, build airports and safety systems.

An operator in the industry who spoke to THISDAY on Tuesday observed that the most virulent attackers of this administration are the members of the Aviation Round Table (ART).

“This think tank group used to be seen as a very serious group in the industry, but I observed that they are sometimes self-serving. I give you an example, when Stella Oduah was appointed she had not even started working before the flood of criticisms started coming from the members of the ART. When she made her first appointment and took individuals from the agencies to replace those that were appointed from outside; they did not see anything good in it.

“At a time I concluded that their criticism is premeditated. She did not do what other minister who came used to do. And that is because she has come to work. Don’t you notice that not many people are criticising her now. By the time she spent one year she has a lot to show for it; unlike her immediate predecessor. In fact, it was their criticism that forced me to really want to know what these ART members are doing for a living and I find out that many of them are contractors in the industry. You cannot be a regulator and an operator, as they say. I noticed that since the woman came they have not been getting contracts from the agencies as they used to do.”

The operator said that for meaningful things to be achieved in the industry both the stakeholders and government have to be sincere and they should work together, with the single purpose of moving the industry forward.

A travel expert, Ikechi Uko, said that for the stakeholders to contribute in improving the industry, they should offer solutions in addition to criticism.
“You may describe utterances as agitation but what they are doing is to add their voice to what is going on in the industry. The best thing they can do is to offer solutions to the problems facing the industry; they should not only criticise. So they should not only be criticising; they should also be finding solutions to these problems. They should offer viable options,” Uko said.
On the contributions of the labour unions in the aviation industry, the Secretary General of the Nigeria Aviation Professionals Association (NAPA), Abdulrasaq Saidu, told THISDAY recently that labour unions in aviation industry have enmeshed themselves in politics and are no more fighting for the welfare of the workers and the improvement of the industry.

“This has made the unions to behave as if they are running the industry. Many have resorted to blackmail the Minister and the head of parastatals, to arm twist them for their selfish interests, requesting for sponsorship to travel to Cuba, Canada and when they don’t get what they want they resort to blackmail and start writing petitions.

“They write damaging petitions that are unsubstantiated. The labour Minister they have written to should look at the operational structures. Most of the people who work for the unions are not in the aviation industry so they don’t have anything to lose if the industry collapses. They have promoted internal acrimony in NAMA between the air traffic control and the engineers,” Saidu noted.

Tags: Business, Nigeria, Featured, Intervention Fund

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