Economic woes: N150bn state airports in jeopardy

Nigeria’s financial crisis, which affected all the three tiers of government –federal, states and local governments has led to the suspension and in some cases abandonment of airport projects embarked upon by states, woleshadare.net has learnt.

The nation’s financial woes were triggered by the slump in the price of oil at the international markets, where Nigeria earns about 70 per cent of her revenues and 80 per cent of her foreign exchange earnings.

Oil that earlier traded for as high as $100 per barrel more than a year ago, has just recovered to $50 per barrel. These developments have swept virtually all the states off their feet financially. Most of them have backlog of unpaid salaries and can neither embark on any capital project norcontinue with the existing ones.

Bayelsa, Ekiti, Abia, Osun, Ogun, Nassarawa and Kogi had started ambitious projects of building aerodromes in their states for ease of transportation and bringing economic development to their areas.

Some of the sites for these projects have been overtaken by weeds, signifying that after the groundbreaking ceremonies, there is nothing on ground to show that work would progress. In others, there is just an erection of what promises to be the control tower.

They had reasoned that the projects are located for reasons beyond economic factors, stressing that the localisation of airports should be seen from other social factors other than from ‘‘balance sheet.”

The zeal at which the states started the projects a few years ago, gave stakeholders the impression that the airports would be completed in record time, but sources close to some of the state government said airport projects are the least on the minds of state governments considering the dire financial situation they find themselves, occasioned by dwindling revenue.

The sources said the governments, which find it very difficult to pay salaries running into five to eight months, are thinking less of the projects they started, which are said to be capital intensive.

In the face of the precarious state of the Nigerian economy, especially unpaid salaries, the Federal Government, last week announced another loan package of N90 billion bond for states.

This is coming months after over N500 billion was dispensed as financial bailout to 27 states facing financial challenges.

The Federal Government had, last year, disclosed plans to construct five domestic airports in the capital cities of Bayelsa, Kebbi, Kogi, Nasarawa and Ogun states.

Virtually all the airports, including the one in Abuja, run on generators, as they are not connected to the national grid. Besides, the Federal Airports Authority of Nigeria (FAAN) is said not to be comfortable with some of the projects that are handed over to them shortly after completion, as it lacks enough manpower to man them.

A source told our correspondent that most of the airports, including the one in Dutse, built by Jigawa State, are a big drain on the budget of the aviation agency, adding that there is no point building facilities that do not have direct impact on the people.

Presently, FAAN manages 22 airports nationwide of which only four – Murtala Muhammed International Airport, Lagos; Nnamdi Azikiwe International Airport, Abuja; Port Harcourt International Airport and Mallam Aminu Kano International Airport (MAKIA) – are said to be commercially viable.

The others can barely sustain themselves. The former Governor of Jigawa State, Alhaji Sule Lamido, spent N15.5 billion to build the airport in the state, which was inaugurated in October 2014.

Lamido reportedly sourced funds to build the airport, standing on the arrangement that the Federal Government would pay back once the project is completed.

Since the airport was inaugurated, only Overland airline operated to the airport as scheduled domestic flight before it ceased operations, except for charter operations and during the airlifting of pilgrims for Hajj.

The MAKIA is a hub of aviation for the zone,as virtually all the airlines operate to Kano, not Dutse, which is about one-and half hours from Kano by road.

According to experts, the Dutse airport is not viable, as it does not generate enough revenue to pay workers maintaining the facilities. There are also fears that the ongoing Bayelsa airport project may go the way of that of Dutse.

The state governor, Seriake Dickson, was reported to be shopping for N40 billion facility from commercial banks to complete the construction of its cargo airport project located near Amassoma in Southern Ijaw Local Government Area of the state.

Although the total cost of the airport project could not be ascertained, sources said the loan facility would attract a total interest of N32 billion to be serviced within eight years, bringing total repayment to N72 billion.

The governor had explained that the proposed project was designed for the largest cargo and commercial aircraft to land.

It is yet unknown how viable the aerodrome would be after construction, but the proximity of Port Harcourt airport may affect the viability of the airport. Amagwa, where the Port Harcourt airport is located, is about one hour drive to Yenagoa.

For the Asaba airport, the Delta State Government reportedly spent N27.7 billion on the project; Abia State is proposing N20 billion for an airport in Umuahia while Ekiti is to spend about N17 billion on its own. The cost for Kebbi airport is unknown.

There are indications that it could be in the region of N20 billion, while that of Kogi could also gulp over N20 billion.

Speaking on the rate at which airports are being constructed by states, former President, Aviation Round Table (ART), Captain Dele Ore, said airports should be sited for commercial reasons after undergoing thorough study of viability.

He said: “Only very few airports are viable in Nigeria and what do we do about the ones that are unviable?” Aviation security consultant, Group Capt. John Ojikutu (rtd), said it would not be economical to have another airport in the South-West as Akure and Ibadan airports have been ‘‘dormant” for a long time.

According to him, only two out of 25 airports in the country are viable, adding that the government could adopt the privatisation strategy for other airports to make them viable.

“We have about 25 airports in the country; seven of them are owned by state governments. But these airports cannot boast of more than 500,000 passengers each year,” Ojikutu told woleshadare.net

To build an airport, he said traffic and money must be available, adding that apart from Lagos and Abuja, there is no airport that is viable to sustain itself. “You need money for landing and parking.

You need money to pay for services and salaries. So, why building airports that will not be viable? FAAN and Nigerian Airspace Management Agency (NAMA) are using money they generate from the two viable airports in Lagos and Abuja to sustain other airports.

“The unviable airports cannot even pay their workers. FAAN is managing the airports in terms of security and NAMA is also helping them. They take money made in Lagos and Abuja airports to run these airports that are not viable,” Ojikutu stressed.