In decades the Nigerian aviation industry has been very turbulent, uncertain and unsteady, resulting in several air crashes, why?
There is monumental scam in the industry. It will be recalled that Aviation Minister, Stella Oduah, shed what many apparently termed crocodile tears in the wake of another avoidable airline disaster that hit the nation recently: courtesy Dana Airlines.
Investigation by this medium indicates that the crisis engulfing the aviation sector is far from being over, as lots of scandals and frauds have characterized the industry in Nigeria.
DESERT HERALD gathered that the Nigerian Civil Aviation Authority (NCAA), the Federal Airports Authority of Nigeria (FAAN) and Julius Berger Nigeria Plc are culpable in this act.
FAAN and NCAA in league with Julius Berger have been a drain in the country’s economy, as millions of naira is daily being lost to spurious contracts deals due to selfish interests of those at helm of affairs of the industry.
On May, 22, 2009, a contract for the completion and overhaul of the three CAT Generating sets (2, 3, and 4) was awarded to Julius Berger Nigeria Plc following a memo which was raised the same day by the Assistant General Manager, Mechanical Engineer E. E. Nwodo, who was the person that recommended to the Director of Airport Safety and Engineering Services and also the FAAN Managing Director for the repairs of the above mentioned generators, as the memo was issued the same day the contract was approved and consequently awarded.
In the said award of contract a lot of irregularities were seen, which includes the raising of the payment memo the same date the contract was approved and awarded; there was also payment certificate for a 100 percent upfront payment done and handed over to Julius Berger on the 10th of June, 2009. What is more was that Julius Berger collected a total sum of N228.258 million from FAAN for the project which was said to be a 100 percent guarantee advance payment without bank guarantee. To cap it all the contract paper was signed on 8th September 2009, three months after Julius Berger Plc had collected full payment for the job yet to be done and even as Julius Berger Plc also collected N45 million for fueling of the generator which was brought during the execution of contract as provided in the contract papers, though no fuel was supplied and the money was never refunded.
DESERT HERALD investigation showed that the Julius Berger contract was fraudulent as the payment of the 100 percent advance payment was contrary to the Public Procurement Act, 2007 which also gives room for a maximum of 15 percent advance payment and the Federal Government’s Financial Regulation Section 29, 33.
Another issue that calls for questioning is that the amount which was involved in the contract was so outrageous, as the expenditure on the refurbishment of the old generators outweighs even the purchase of new ones. More so, John Holt Plc had earlier submitted a quotation of N55.675 million for the supply and commissioning of brand new Generators of the same size to the ones being refurbished by Julius Berger but this quotation was rejected by the FAAN Management.According to our investigations FAAN and NCAA, upon a petition which was sent to the Inspector General of Police to investigate the alleged diversion of funds and other corruptions levelled against the management of FAAN and NCAA, officials of FAAN mismanaged the sum of $156 million from the Bilateral Air Service Agreement (BASA) fund which was domiciled with the CBN.
The investigation revealed that there was withdrawal of $11.820 million by the Federal Ministry of Aviation from the $99.675 million BASA account in the CBN between June and July 2012. The withdrawals were said to have been authorized by the Permanent Secretary Ministry of Aviation, Ms. A.N Ene – Ita, and also the Director General of the Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren, who were the two signatories to the account.
These withdrawals were made for an alleged payment, according to our investigations, for the remodeling project in line with request for approval for payment for the upgrading and rehabilitation of 11 airports by the Managing Director of the Federal Airports Authority of Nigeria.
Another scam was found out owing to a Memorandum of Understanding which was signed between Miami Dade Aviation Department and Murtala Mohammed Airport on May 3rd 2011. Surprisingly the Police in their investigation discovered that from September to December 2011, 84 FAAN officials travelled to Miami Dade International Airport for the exchange Programme for which $504.000 million was paid to Travelco Training Travel and Tours Agency in South Africa.
The payment was made through Account Number 1521065977, Bank ID Code NEDSZJJXXX, NEDBANK a division of NEDCOR Bank Limited NEDCOR Park 1 Johannesburg, South Africa through Equatorial Trust Bank Nigeria Plc between 27th June 2011 and 28th July 2011. It was found out also that the company the money was paid had no link with Miami Dade International Airports Department. This paper also gathered that such kind of exchange programme was done in 2008 and 2009 at no cost, as the call for this investigation lies in the fact that this was an exchange programme and not training.
It was also discovered that both travelling agencies were not even appointed as training consultants by FAAN as claimed by General Manager Training FAAN, Mrs. Salamotu Umar Eluma and George Oriesi, FAAN MD.
Another curious issue is the award of N246.555 million contracts to MS Sanguine Nigeria Limited for the supply of operational vehicles. The contract, it was gathered, is far above the Tenders Board approval limit of N50 million for purchases as seen in the Public Procurement Act 2007 even as the contract was also found out to be inflated going by the market survey.
At the moment, serious lobbying and pressure are now on the IGP by top officials of FAAN and NCAA to drop the investigation, as those involved know that by the time the police come out with their report heads would definitely roll.
Similarly, on June 8, 2011, MS Sanguine Nigeria Limited received a purchase order from FAAN. The company’s task was the supply of operational vehicles and installation of Toyota vehicles. The vehicles (12 Camry, six Corollas, six Hilux, two Prado), all with the highest configurations such as leather seats and full alloy wheels, were to be supplied at the cost of 246 million naira. If FAAN had allowed for competitive bidding or for the items to be purchased from accredited Toyota dealers like Briscoe Motors or Elizade Motors, at least 25 per cent of the sum would have been saved.
A check at the aforementioned motor companies shows that the Toyota Corolla 2011 model with 1.8 litre engine, leather seats and the exact specifications contained in the purchase order now cost 4.8 million naira per unit. They cost even less when the purchases were made. On the purchase of six units at 6.4 million naira per unit, FAAN could have saved at least 10.8 million naira. Also, the purchase of 12 units of 2.4 litre engine Toyota Camry at 10.2 million naira would have saved the agency at least 24.6 million naira if it had been bought at a present market price (which is significantly higher than last year’s) of 8.15 million naira.
Meanwhile, Arik Air, the nation’s largest carrier, has suspended further operations within the Nigerian airspace indefinitely over what it describes as incessant harassment by officials of the Aviation Ministry and Federal Airports Authority of Nigeria, FAAN. The airline will be relocating to Sierra Leone and Niger Republic where it will operate as its local/national carrier. Following this development, the airline has grounded all aircrafts in its fleet leaving air travellers stranded across the nation in the absence of a national career.
Interestingly, weeks after Air Nigeria suspended all its operations and sacked its workforce over heavy indebtedness and management fraud related matters another Nigerian indigenous airline, another Nigerian airline, Arik Air has also run into bad weather forcing it to suspend all its domestic flight operations.
The airline’s decision to suspend its local flight operations followed a protest by aviation union’s members accusing the airline of N18 billion indebtedness to various government agencies and unions in the aviation sector.
The union members had stormed the airlines at the local wing of the Murtala Mohammed International Airport, Lagos and disrupted its flight operations. The protest was effectively coordinated by the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) and the National Union of Air Transport Employees (NUATE).
But the airline management in a swift reaction suspended its domestic operations leaving hundreds of passengers stranded.
It also alleged that some powerful forces in government were behind the unions’ action as a way of witch-hunting it over its alleged “inability to meet the personal demands of certain influential person(s) in the aviation industry”.
Managing Director of the airline, Chris Ndulue, who made the allegation at a media briefing said: “before now, there have been several attempts and threats to disrupt our operations and sell the usual impression that Arik is owing these agencies. After these attempts failed, today, they resorted to using some FAAN staff. We’re aware that some knowledgeable staff refused to join this illegal and unwarranted action. They locked the boarding gate and prevented passengers from getting to the aircraft and were making false announcement of unimaginable sums of money they claimed Arik owed. Obviously, from their records, no other airlines owe anything. This is only a calculated attempt to punish the airline and tarnish its image. The amount FAAN claims Arik owes it is fictitious and baseless.”
While maintaining that the airline is not indebted to anyone, Ndulue stated that government parastatals in the aviation sector have been collecting their charges in the last 18 months as at when due through the pay-as-you-go system, adding that the airline had within the year paid over N2 billion to FAAN.
“We have an outstanding balance of N1.6 billion from the period FAAN/Aviation Ministry started pay-as-you-go (payment in advance). Other airlines also have various figures. In January, the former Minister of Aviation directed that such outstanding be cleared within 30 months. We’ve been paying down on the amount installments of N100 million per month and we’ll continue to do so.”
After the disruption of its flight operations, the airline had sent text messages to its stranded and disappointed passengers. Part of the text reads: “Due to persistent hostility of the Ministry of Aviation, and FAAN management, which has culminated in the use of FAAN staff to stop Arik Air operations and lock in checked-in passengers in Lagos this morning, Arik Air has no option than to suspend all domestic operations until further notice. This issue borders on personal interests and not payment of bills; since FAAN has been collecting their charges in advance since 18 months now. Arik Air regrets the inconveniences this disruption by FAAN would cause you. Thank you for your much-valued support. Arik Air”.
Aniete Okon, the company’s vice chairman, blamed the Nigeria’s Aviation Ministry and Aviation Minister Stella Oduah for trying to stop the airline from flying. Okon also accused Oduah of having financial interest to see to it that the airline fails, but declined to elaborate.
“If it continues unchecked, there will be no future for the aviation industry in this country,” he said.
Arik Air, a private firm born out of the pieces of country’s former national airline, has grown into an international air carrier over the last few years, with operation flights to both London and New York. The airline has more than 20 aircrafts in its fleet and has ordered more than a dozen more. It also provides more flights domestically than any other carrier in Nigeria, a nation of more than 160 million people that’s growing more reliant on air travel.
Rumours about Arik Air’s finances have clouded the company’s reputation in the past, as financing remains difficult in the country. Last week, union members demonstrated outside of the domestic terminal Arik Air uses, with one member holding up a sign gleefully noting that the airline had halted its flights.
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