Thursday 22 January 2009

12 Steps - Transportation: Reforming Air Travel in Nigeria

As of 2006, the National Bureau of Statistics stated that the contribution of air travel to the Nigeria economy was negligible. This is probably due to the poor state of all the major airports in the country. Stories of animals strolling on the runway during the landing and takeoff of aircrafts, along with the breakdown of essential operational equipment are known to occur.

Many observers have noted that good airport service enhances economic development—and that poor airport service discourages it. A study by the Aviation Policy Program at George Mason University in the United States, found that the number of high-technology jobs in Cincinnati region had jumped from about 65,000 in 1989 to almost 80,000 in 1996. The study pegged the region’s strong hub airport as an important factor in growth.

The Federal Government under former president Olusegun Obansanjo announced a plan to reform the aviation sector in the country by proposing to privatise all the airports managed the Federal Airport Authority of Nigeria (FAAN).

FAAN manages 21 airports across the country including Nigeria’s four main internal airports at Lagos, Abuja, Kano and Port Harcourt. Under the plans the government mode of privatisation is concessioning beginning with the Nnamdi Azikwe International Airport (NAIA) Abuja on a pilot basis before the others, including:

MMA Plc comprising Murtala Muhammed international airport Ikeja, Lagos, Akure, Ibadan, Ilorin and Benin airports
MAKIA Plc comprising Kano, Maiduguri, Sokoto, Yola and Katsina Airports.
PHC International Airport Plc comprising Port Harcourt, Calabar, Owerri, Enugu Airports. and
Abuja Plc comprising Abuja, Kaduna, Jos, and Minna Airports.

A winning bid for the concession of the Nnamdi Azikwe International Airport (NAIA) Abuja was awarded in 2006 by the past government. However the deal was reversed by the present government of Yar’Adua and renegotiations have been stalled by warring government parties over who should oversee the sale of the airport.

However some success has been recorded in the Nigerian aviation sector with the concession of Murtala Muhammed Airport Terminal 2 (MMA 2). After fire gutted the domestic terminal of the Murtala Muhammed International Airport international in Lagos, the Federal Government made a decision to redevelop the airport using private sector investments under a Public - Private Partnership Scheme. 

In 2003, a private company, Bi - Courtney Limited, was awarded the concession by the Federal Government of Nigeria to design, build and operate the Murtala Muhammed Airport, Lagos Domestic Terminal and ancillary facilities. Despite early teething problems, passengers at MMA 2 have expressed satisfaction with their experiences at the terminal. 

The operator of MMA 2 currently employs about 1,000 people and plans to employ some more as expansion of both the apron and fingers of the terminal continues. The success of the MMA 2 should spurn the government to increase the speed of the much needed reforms in the aviation sector.

Apart from the privatisation of the airports, which will be regulated by the Nigerian Civil Aviation Authority (NCAA), it would be recommended that an Aviation Maintenance Fund be created to replace the controversial Aviation Intervention Fund.

Following recommendations by a panel investigating the spate of air traffic accidents in the Nigeria, the government of Obasanjo set up the Aviation Intervention Fund. The Fund which was partly financed by loans from the private sector was to assist with the replacement of the crumbling infrastructure of the aviation industry.

However an investigation has been started by the Senate into the N19.5 billion naira (US$ 162.5 million) Fund, amid fears that the money might have been misappropriated and the revelations that the Nigerian Airspace Management Agency (NAMA) is struggling with making repayments on the loan and unable to continue with its plans to upgrade and maintain the aviation infrastructure.

Nigerian Aviation Maintenance Fund
The Nigerian Aviation Maintenance Fund will be registered as a company limited by guarantee and operate independently of the NAMA and FAAN. 

The Fund will be administered and managed by a Board of Trustees representing various interests in the private and public sector and will be completely isolated from the management of the NAMA and FAAN.

The Fund will be required to release quarterly reports on the how much of its funds are being spent and how is being spent on any of the operations is it financing.

The Fund will be used finance: 
NAMA’s capital projects such as the installation and maintain adequate Communication, Navigation Surveillance and Air Traffic Management (CNS/ATM) facilities at all airports in Nigeria, plus the provision of facilities for effective security of navigational aids outside the airport parameters.
The construction of an aviation training school for pilots, air traffic control officers, etc. The school will be built under the guidance provided by the IATA’s Training and Qualification Initiative.
Upgrade and maintenance of the training facilities at Zaria airport.
Airport improvement and expansion programmes, such as the building of a new runway or terminal.
Providing financial assistance to state governments for the construction of new airports.

The Fund will be financed by: 
Grants from governments, organised private sector and international donors.
Proceeds from the concession of the airports.
A fuel tax paid directly to the Fund by commercial airlines.
Airport tax by paid by every air travel passenger departing from Nigerian airports.
Returns on investments made in the capital and money markets.

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