The Federal Airports Authority of Nigeria (FAAN) is currently facing serious financial challenges that may be threatening its existence unless radical measures are taken to ensure its survival.
Three factors are responsible for FAAN’s depleting resources. One is the economic downturn, which is affecting the nation’s overall economy. Two is the inability of the agency to maximise and adequately utilise its resources and three is the age-old intervention from government.
FAAN is supposed to earn a projected N3billion every month, but right now, it can only generate about N1.3 billion monthly and its salaries, pension and overhead costs are about N1.2 billion every month.
The agency has concessions that if well managed could be generating about 50 per cent of its revenues; from car parks, cargo charges, to lounges, toll gates, hospitality facilities, including cafeterias, but poor agreement deals and a lack of sincere supervision erode the Public, Private Partnership (PPP) aimed at maximising earnings for the agency.
Take the concession of the temporary park built at the international wing of the Murtala Muhammed Airport, Lagos for example, it was learnt that the two and half years the park has operated, it has not paid any money to FAAN. The company that signed agreement to operate the park was said to have agreed with the agency that it would pay it 60 percent of its earnings, while it pockets 40 percent. But since the said period, the company has not paid any money to FAAN.
A source made it known that the company generates about N860, 000 daily but has remitted nothing to FAAN. The source pointed accusing figure at those in commercial department, saying they are causing the confusion and the exploitation of FAAN.
“The union has taken it up because FAAN cannot meet its obligations anymore. Many of its business partners on concession are not meeting their financial obligations to the agency. Right now FAAN is in showdown with the firm managing that temporary car park. The union wants to take over the place after Wednesday meeting,” a source disclosed.
Another huge revenue source is the tollgate at the major road that links the domestic and international terminals of the Lagos airport. It was learnt that the company ought to pay FAAN N65million monthly in an agreement that was signed about three years ago. The company without seeking FAAN’s approval increased the toll by 100 percent but has not increased the money it gives FAAN despite the increase in toll.
“The agreement was renewed last year to the company but nothing was said about the increase in the N65 million monthly payment to FAAN and the company is generating about double of what it was generating when the agreement was signed. So FAAN through the union may take over the toll collection; although the company gave FAAN bank guaranty but right now it is ripping off the agency.
“I can tell you authoritatively that all the concessions done by FAAN are against the agency’s interest and we must fight this,” an official of one of the unions said.
The source lamented that despite the plummeting resources, the agency “was forced” to employ 400 people recently “and they will be on pay roll next month and most of them are idle so they were not employed because there were vacancies existing in the agency and all of them were employed from one section of the country and they mischievously allotted them to 36 states as if they were picked in accordance to the Federal Character Policy of the federal government.”
“We learnt these people were foisted on FAAN and other agencies in the industry; just like they used to do. So it is the old system that is prevailing, which means that there is no change. FAAN owes gratuity of N3.5 billion and staff claims of over N1 billion and the workers are complaining that the management gives priority to the contractors first, and we know where the directives are coming from. It is the rehash of the old system. So this has prompted the union to decide to charge of the revenue points so that the workers will directly collect the money before FAAN will become bankrupt,” the unionist said.
Currently, there is so much panic in FAAN and in the industry because most foreign airlines are threatening to withdraw service from Nigeria due to the economic crunch.
A union official said: “Workers are afraid because no one is telling them the plan government has for the industry. FAAN revenue is also shrinking because foreign airlines have reduced their frequencies and local airlines owe the agencies, but the worst are the concession agreements FAAN has entered into. Basically, 80 percent of them are against the interest of FAAN and this did not start today. Now, they said they want to concession the four major airports that sustain the other airports, so how can FAAN survive?”
But reacting to the view of the labour officials, a FAAN source said that the unions taking over the agency’s revenue sources is not a solution to the problem of plummeting financial accruals to the agency because from past experience the unions do not give a good account of themselves in matters of finance.
“There is due process in how government receives and disburses funds; otherwise the unions will expose themselves to financial allegations. By taking over these revenue sources they will constitute themselves into a hindrance to laid down financial process. Besides, the concessions are legal agreements; they will be exposing the agency to litigation by such forceful intervention. Despite the hard times, FAAN does not owe workers salaries. Government wants to encourage PPP so that the private sector will invest in airport development, the unions should not disrupt this process. Most labour people I know use this opportunity to feather their personal and sectional interests, so they have to show genuine commitment to the growth of FAAN by finding legal, credible solutions to our boosting our revenue,” an official said.
CULLED FROM THISDAY
