The Federal Government would no longer enter into any fresh concession agreements at the country’s airports.
Henceforth, it would rather undertake a comprehensive review of the existing ones and plug the loopholes in revenue generation system in the aviation sector.
The minister of aviation, Fidelia Njeze, told reporters in Abuja yesterday that all the existing concession agreements with the Federal Airport Authority of Nigeria (FAAN) have issues that needed to be sorted out to get them right.
According to her, on assumption of office, studies of the agreements had revealed that all of them needed to be reviewed, as their terms, which were structured to assist the sector grow its revenue base, were “highly skewed against government.”
“All the existing concessions are not adding value to the aviation sector. It is as if the aim of having them in place has been defeated. There was need to take a critical look at the agreements and review them thoroughly, so that it would be in line with the objectives of having them, Mrs. Njeze said.
Mrs. Njeze, who noted that she is the only minister in the history of the ministry not to have entered into any concession agreement within one year in office, said, “I want to review all the existing ones to get things right. I have refused to enter into any new one, because all the ones in existence have issues. But it is high time we started getting things right. Somebody has got to do it someday, somehow, somewhere.”
Alluding to the raging controversy between FAAN and one of the concessionaires (Mevis) over alleged breach of terms of agreement, the minister said that government is determined to get to the root of the issues involved, because “an employee can never act like the employer.”
“It has never been heard that one can engage a company to come and help enhance revenue yield, yet one is not privy to what the company is doing, because the company has turned to become a monster that cannot even be managed,” she said.
According to the minister, FAAN engaged the concessionaire to help boost revenue generation, but the relationship reportedly turned sour after it was alleged the concessionaire reneged on the terms requiring it to open two dedicated accounts for all generated revenues.
It was gathered that the agreement had benchmarked Mevis revenue collection against the N700 million it generated in 2007, from where it was entitled to 2 per cent as commission, while every revenue enhancement effort was to fetch it additional 35 per cent commission.
Though the concessionaire reportedly opened two dedicated accounts in two new generation banks (Skyebank and Zenith) for its operations, it was gathered that it had gone ahead to open a platform account, where it lodged all revenues generated before transferring same to the dedicated accounts, contrary to the concession agreement.
“FAAN is meant to be paying Mevis, but Mevis is paying FAAN. From the platform account, Mevis would transfer money to FAAN’s account after deducting all its interests. Nobody knows what is happening in the contentious Platform account,” the minister further said.
“The issue in question is not about money missing. All the money the company has made has been paid into FAAN’s account. The issue is for government to review the concession agreement to favour all parties. We want to know the activities going on. The most important thing is that we want to get things right,” the minister stated.
Though the National Assembly committees on aviation described the concession agreement with Mevis as fraudulent, and advised government against keeping it, it was gathered that Mevis has resorted to the courts to restrain government from going ahead with the planned review.
“Mevis is only doing well on the international routes, because the revenues are collected by International Air Transport Association (IATA) and remitted to it. In the domestic route, Mevis is not doing well, because the airline operators say its operation is fraudulent, and that they are not going to pay money to it,” the minister said.
Reviewing her activities in the past year, Mrs. Njeze said projects are ongoing in five critical areas, including critical safety equipment, systems upgrades, emergency response systems, travelers’ comfort, and rehabilitation of infrastructures at the airports to meet international standards.
“A lot of training is ongoing. We are overhauling operations, without compromising safety, by ensuring that all the airlines undergo re-certification, to determine the state of the aircrafts that fly the country’s airspace. This is one way to promote business and encourage more investors to come into the country’s aviation industry,” she said.
Source: 234next
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