FAAN contractors panic over N40 billion loan default

Contractors who have engaged in the delivery of jobs to the Federal Airports Authority of Nigeria (FAAN) since 2018 are facing trouble with many of their bankers over funds totaling N40 billion.

The contractors who spoke to journalists under condition of anonymity because of the fear of victimization said funds used for the execution of jobs such as supply of diesel to many of the country’s airports, supply of office equipment, engineering works, maintenance of the airports among others were sourced from commercial Banks with accumulated interests.

The aggrieved contractors disclosed that they had written letters to the Minister of Aviation, Hadi Sirika and the Managing Director of FAAN, Capt. Hamidu Yadudu but without response from the duo particularly the FAAN boss.

They lamented the loss of value on the money spent to execute the job alluding to the depreciation of Naira since 2018 when the job was executed.

But spokeswoman for FAAN, Mrs. Henrietta Yakubu told Aviation Metric promised to get back when our correspondent sought to know the reason for the delay in offsetting the payment by her agency.

According to them,  ”We have written letters to the FAAN management twice with no response. We have engaged him one on one. At times, they will tell us that the Director of Finance would speak with us. We don’t know exactly what is happening.”

“They have not owed us for jobs executed until 2018 all through to COVID-19 pandemic. These debts have piled up since 2018. We collected loans from the Bank with high interest rate including from other finance houses,”

The group wondered what is going to the other 18 airports when the Federal Government finally concession the four viable international airports such as the Murtala Muhammed International Airport, Nnamdi Azikiwe International Airport, Abuja, Mallam Aminu Kano International Airport, Kano and the Port-Harcourt International Airport, Port-Harcourt.

Revenues from the four aerodromes go into the sustenance of the other airports that are considered less viable.

Just recently,  the Federal Government in compliance with the Infrastructure Concession Regulatory Commission (ICRC) and National Policy on Public-Private Partnership (N4P) has released a request for qualification for the concession of four International Airport terminals and related services.

The government said it intends to develop into efficient, profitable, self-sustaining, commercial hubs which will create more jobs and develop local industries through a Public-Private Partnership (PPP) arrangement.

In a related development The FAAN is reported to be battling lots of financial crises said to be in the region of over N120 billion.

In an advertorial placed by the Nigerian Union of Pensioners (NUP), FAAN branch, and signed by the association’s secretary, Emeka Njoku, in response to the commencement of the bidding process for the international terminals of Nnamdi Azikiwe Airport, Abuja, Port Harcourt Airport, Omagwa, Mallam Aminu Kano Airport, Kano and Murtala Muhammed Airport, Lagos, prospective bidders were warned of the indebtedness of the agency which may cripple operations if there is no reprieve from the Federal Government.

Bidders were warned that the agency has over 60 pending litigation arising from several faulty concession agreements yet to be resolved and there is also the issue of the unresolved BI- Courtney concession of Murtala Muhammed Airport (MM2).

The NUP said that FAAN owes contractors who have delivered their contracts over N15 billion. Sources within the agency said that this figure does not include ongoing contracts.

NUP urged bidders to investigate not only their claims, but should also clarify from the Minister of Aviation, Sirika, how the over $1 billion loan from China for the construction of the same terminals earmarked for concession would be repaid.

FAAN is said to generate an average of N70 to N75 billion annually and remits an average of N1 billion monthly into the Federation Account while monthly salaries for the agency’s 8000 staff currently stands at over N2.3 billion.

In the past four months, about N2 billion deducted from staff salaries for cooperative contributions have not been remitted.