White elephant airports

All over the world, airports are regarded as economic and social infrastructure and expected to be catalyst for accelerated development of the areas they are sited. But in Nigeria, the reverse is the case. Aerodrome construction, more less, serves as conduit pipe for siphoning money, writes WOLE SHADARE

The rate at which states are embarking on airport projects makes one to think that there is more to building airports than meets the eye. In the next five years, virtually all the states in Nigeria will have at least an aerodrome. Never mind that many of them might not be completed while others could become abandoned projects.

The signs that the facilities are already turning to abandoned projects are visible following the financial woes states have found themselves. 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.

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 which earlier traded for as high as $100 per barrel more than a year ago, has just recovered to $50 per barrel.

This development has 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 nor continue with the existing ones.

Also worried about the development is the Minister of Transportation, Mr. Rotimi Amaechi, who early this year warned governors against embarking on “economically unviable airport projects”. The minister, who was in Abeokuta, Ogun State, said the construction of airports by governors must rather be supported and driven by the economic demand of their states. According to him, the country is already filled with many airports that are not economically viable. tional airports – Abuja, Lagos, Port Harcourt and Kano.

New Telegraph reported recently that by the time airports in states like Bayelsa, Ekiti, Abia, Osun and Ogun are completed; some states would have invested over N150 billion on aerodromes that may not significantly improve their economies. Some of the airports that have been inaugurated are currently unviable as they witness little traffic.

The Nigerian aviation industry statistically contributed nearly N120 billion to the country’s Gross Domestic Product (GDP) in 2013 alone, while N59 billion directly came from the airlines, airports and ground services. Also, N34 He said: “I believe that the construction of airport should be backed by the growth of the economy. There are some airports that are constructed just for the governors to land and take off.

That won’t be the idea for me as Minister of Transportation. I would prefer that all airports that are constructed would be backed by economic demand. And when we look at the numbers, if the numbers add up, we would not discourage Ogun State if you like to construct an airport.

The minister restated the commitment of the Federal Government towards the completion of new terminals at four internabillion was realised from supply chain, N26 billion from employees’ consumption and supply chain and N78 billion in catalytic benefits through tour operations.

However, the recent trend in Nigeria points to the proliferation of airports without a corresponding rise in traffic-enhance disposable income, economic/ social activities dwindling resources to the states and competing demand of governance. A passenger cannot be so sure of flying until the aircraft is on ground.

These factors make planning difficult. A regular traveller to Birnin-Kebbi, Dutse could attest to this. A flight once a week and return could barely sustain the route. Investigations revealed that most of these airports are not viable. It is worthy to note that for a country with over 160 million people, it is quite unacceptable, that both domestic and international traffic for 2014 was about 15 million.

The Federal Airport Authority of Nigeria (FAAN) has also been financially handicapped to run these airports, build new ones, retool or expand and modify them, whereas several states are currently in a “rat race” to build their own airports, which is being used as a ‘status symbol”.

Experts point out that the craze to build airports by states is definitely a “misplaced priority”. According to them, China, a country of 1.3 billion people, has 101 existing airports and recently announced it would build 82 new airports under the 12th five-year plan, ending 2017.

By then, China would have had 230 airports as compared to Nigeria with merely 24 and about 13 airstrips. By China’s plan of action, most of these new airports envisaged would serve as feeder airports in Central/Western portion of China.

In addition, 80 per cent of the population will be within 100 kilometre radius of an airport. Beijing has indeed justified the ambitious building programme to drive growth to double digit, spur economic development and increase the speed of doing business.

The United States, in comparison to China, has 14,000 airports. It is a prosperous nation. Only last year, China earned 4.6 billion Yuan and not a few people reasoned that they need these airports in view of its 1.3 billion population and high per capita income.

The airport with the highest traffic in 2015 is Lagos (7.6 million) followed by Kano (327,267) and the least of the first 10 airports, Kaduna (160,469). Only three airports are viable for now. Most of the states said: They also stated that some of the aerodromes serve as cargo airports as a hub for exports of agricultural products, enhance movement of agricultural products and passengers. Although some of the justifications are plausible, most of them are ridiculous.

The states conceptualising building airports as at 2014 included Ekiti, Nasarawa, Osun, Ogun, Taraba, Zamfara, Abia, Lagos and Anambra.

Minna airport in Niger State has one of the best ‘runways but largely unused, underutilised and unviable. Minna airport was established over 25 years ago; Ilorin, Kwara State, only one airline operates there and mostly used for Hajj operations; Akure, Ondo State, barely used except for charter operations; Katsina, Katsina State, barely used except for charter operations; Makurdi, Benue State, used mainly for military operations; Ibadan, Oyo State, idle for nearly 30 years, in view of the proximity to Lagos and lack of economic activities; Sokoto, Sokoto State and Bernin-Kebbi in Kebbi State, lack of economic and business activities; Jos, Plateau State, lack of business activities owing to security challenge since 2001.

Viable airports are the busiest airports by passenger traffic, starting from Lagos (7.6 million) and Kaduna as number 10 in ranking with (324,267). Former Secretary General of Airline Operators of Nigeria (AON), Captain Mohammed Joji, said the total passenger traffic in 2013 in Nigeria was barely 12/13 million for a whole 365 days and population of 170 million.

According to him, out of the states which currently operate their own airports, only about two – Uyo and Asaba – are viable investments, considering the passenger traffic and income. Aero, Arik and Dana Air are the airlines plying the routes.

Surprisingly, Imo (267,532) and Delta (238, 463) ranked among the first 10 with passenger traffic in 2013. Joji regretted that most of the state airports are tools to siphon funds with over-bloated and ambitious projects. He said: “For example, Ahmadu Bello Airport in Birnin-Kebbi was built with N17/N18 billion, while the Jigawa airport was built with N19/N20 billion.

The belief of most of these states at the project inception was that the Federal Government would contribute and partner with them. “In the same vein, Nasarawa and Ekiti states with monthly revenue, both from Federation Account and Internally-Generated Revenue (IGR) of barely N3 billion but now less than N800 million embarked on airport projects which could not be constructed below N10 billion despite their inability to pay workers’ salaries, meet other demands and in the face of health, education and other infrastructure yawning for development.

“In most cases, apart from ‘pride and ‘status symbols,’ lure to award big contracts, launder and siphon funds, most governors are pushed to construct airports to join the so-called elite governors who can fly directly to and from their states to Abuja and Lagos, instead of by rough/distant roads, charter aircraft at a moment notice, buy or lease private aircraft and helicopters despite the lean resources with attendant huge cost to lean treasuries and mainly to service their extravagant and opulent lifestyle.

“Though we all agreed that airports open up states for great opportunities, we are also all convinced that should not be priority for now. Most of these states already have airports close to them. “For example, Ekiti-Akure is about 50 kilometres to Ado-Ekiti and this airport is idle.

With good and motorable road, 30 minutes is too long to connect the capital cities of the two states.” According to him, the distance between Lagos and Ado-Ekiti is nearly 300 kilometres and from Ibadan is less than 150 kilometres,a distance which can barely take maximum of one to two hours from Lagos/Ibadan with good roads.

He added: “The economic activities in Ekiti State, which is more or less a teacher/civil service state, do not augur well for an airport. The journey from Lagos/Ibadan to Ado-Ekiti is not more than three hours, and maximum of N1,000 fare with a dual carriage road, whereas a flight from Lagos to Ado- Ekiti cannot be less than N10,000. The time for waiting for flight, cancelled flight, re-scheduled flights, distance to and from airport, with additional car hire cost, you would have been at Ado-Ekiti from Lagos.

“The same applies to Osun State. The time lag from Lagos to Osogbo (the state capital) is just two hours and 30 minutes after take-off with good roads. While from Abuja/Kaduna to both Ekiti/ Osun states’ capitals by road could barely take five hours, even with our bad roads and less than N3,000 as fare.”

Joji noted that the way out for all the states in the South-West was to harness their resources, to develop a well-befitting road/rail transport within the region or alternatively utilise Ibadan/Akure airports situated within the region but underutilised.

The viable airport in the North, besides Abuja which is currently under-utilised, is Kano. Kano is active; Maiduguri is active but security challenges are hampering operations; Yola/Jos airports are back but are partially active; Sokoto is poor owing to lack of economic activities.

Minna, lack of activities; Taraba, lack of activities; Bauchi, hajj operations only; Jigawa, lack of activities; Birnin-Kebbi, lack of activities and Zamfar, lack of activities. Former President, Aviation Round Table (ART), Capt. Dele Ore, said the latest airport-building- binge with most states also paying staff salaries of those working at the airports was a colossal waste of resources that are even not enough.

He said: “Let us learn to walk before we crawl and then run. Please, states should not go to capi-tal market or issue bonds to build airports.” Ore challenged the governors to conduct a bankable feasibility/ viability analysis before they could embark on airport construction. “Let us see how many of them could pass viability tests.

None, not even Lagos and Ogun that generate N22 billion and N7 billion IGR monthly. The Managing Director of Omi- Blu Aviation Services Limited, Mr. Akin Olateru, said there was no airport in the world which could not be made viable.”

According to him, activities around airports can drive traffic and make them very viable. Olateru cited Frankfurt-Hahn Airport as a case of how Nigeria could make over 90 per cent of her aerodromes attractive. The MD added that the airport was about equidistant between Frankfurt and Luxembourg – about 120 km (75 mi) to each city by road.

He said: “Frankfurt-Hahn was once a dead airport. When the airport opened, the operators went to Ryanair Air to operate to the place. They made everything available to them to open up the airport and to bring investments.

“Why did they do that? They wanted to create jobs. They gave them two years tax holiday that attracted people to the facilities. After that, they invited FEDEX to come and build their warehouse. There is no airport that cannot make money where there is light and water.”

Olateru noted that the so-called unviable airports will become Strategic Business Units (SBUs), once they are commercialised and the airports will now be challenged to raise benchmarks and operational standard for efficiency.

He said: “We need to now begin to make the rest of the nation’s airports viable by investing in non-aeronautical activities. Out the 44,000 airports across the globe, 1,000 handles less than one million passengers annually. The challenge is therefore obvious.

“This does not require our or your personal funds. We need to encourage private investments to cone into the airports and develop it in terms of non-aeronautical activities, so that the unviable airports will become Strategic Business Units (SBUs).”