FG earmarks N20bn for Abuja Airport 2nd Runway

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The Federal Government through the Ministry of Avia­tion has once again proposed to expend N20 billion on the con­struction of a second runway for Nnamdi Azikiwe International Airport (NAIA), Abuja, thereby increasing it by N6 billion within a year.

The government in its 2022 Appropriation Bill to the National Assembly also planned to spend about N550 million on the botched and controversial national carrier project, Nige­ria Air.

The full budget proposal of the Ministry of Aviation for 2022, which was made avail­able to Daily Independent, in­dicated that the government for the second time between 2020 and 2021, planned the construction of a second run­way for the airport.

Investigation conducted by Daily Independent indicated that the government in its 2021 budget to the National Assembly, had proposed N14 billion for the construction of the second runway for Abuja airport.

In the bill presently before the National Assembly, the ministry said that the project was “ongoing,” but there is nothing on ground to show physically that work had commenced on the project at Abuja airport.

The Federal Executive Council (FEC), had in June 2020, approved N1.7 billion for consultancy services for the construction of the same runway.

In 2018, Sen. Hadi Sirika, the Minister of Aviation, had said that it would cost the country about N67 billion for the construction of a second runway for Abuja airport.

Though analysts in the sec­tor agreed that the airport de­served a second runway, but insisted the proposed amount of N67 billion was too enor­mous for the project.

Besides, the government planned to expend the sum of N550 million on the “suspend­ed” national carrier project.

The breakdown of the sum showed that the Ministry of Aviation is seeking approval of N400 million as “working capital for the establishment of a national carrier, while it is also seeking another N150 million as “consultancy” fee for the same purpose.

According to the appropri­ation bill, the ministry said the project was “ongoing.”

The Ministry of Aviation had in the 2021 budget propos­al to the National Assembly, planned N1 billion for the es­tablishment of the national carrier.

Also, in the 2020 approved budget for the country, the ministry had proposed the sum of N4.6 billion as “work­ing capital” for the national carrier project, but nothing was heard about the project in the outgone year.

Besides, in the 2021 Appro­priation Bill to the Nation­al Assembly by President Muhammadu Buhari, the ministry also proposed to pay the sum of N250,000,000 as “consultancy fee” for the same project, which has di­vided most stakeholders in the sector.

The government in the 2020 budget proposal to the Assembly, also proposed to pay the sum of N304 million as “consultancy fee” for the same airline project and said it was ongoing.

With this, the govern­ment had proposed to spend N7,304,000,000 (N7.3 billion) on the aborted national carrier project in the last three years: N6 billion as “ongoing” sum for the project and another N704 million as “consultan­cy” fees for project within the same period.

Sirika had unveiled rib­bons at Farnborough Air Show in United Kingdom on July 18, 2018 and set a December 2018 for the com­mencement of the national carrier, but the government had been silent on the project ever since, except its inclusion on the annual budgets.

Also, players in the sector have remained divided over the project since the demise of the former carrier, Nigeria Airways.

While a section of ana­lysts believe it was good for the image and tourism of the country, others declared that it would create uneven work­ing environment for existing operators, arguing that most developed aviation countries lacked national carrier.

Before the “temporary suspension” of the airline in October 2018, the government had scheduled the carrier to commence flight operations on December 24, 2018 with a target of 81 routes on com­mencement of operations (local, regional and interna­tional), 15 leased aircraft as at the due date with additional plans to own 30 planes within three to four years.

According to Sirika, the government was expected to expend $55 million on the project in 2018; 2019, $100 mil­lion, while $145 million was expected to be expended on the project in 2020. In three years, the government had planned $300 million for the airline project.

The minister also said the government would not own more than five percent of the airline, which he put at $55 million, assuring that the government would not in­terfere with the recruitment and appointment of technical persons and management of the new airline as agreed with the Infrastructure Concession Regulatory Commission (ICRC) guidelines, which led to the issuance of certificate to the ministry weeks earlier.

“This funding can be in the form of equity or debt. The fi­nancial model estimates cash flow requirements as follows: 2018 ($55 million – $8 million is included here); 2019 ($100 mil­lion), and 2020 ($145 million).

In order to ensure take-off of the airline in 2018, the gov­ernment will provide $55 mil­lion upfront grant or viability gap funding to finance startup capital and pay commitment fees for aircraft to be leased for initial operations and deposit for new aircraft, whose deliv­ery will begin in 2021.

“The company’s shares will be sold through an initial public offering after, which the government will own five percent equity. Government’s equity share held in trust for Nigerians will be devolved to Nigerians via an Initial Public Offer (IPO).The government will retain only five percent equity, the list of shareholders then will be available to Secu­rities and Exchange Commis­sion (SEC), and the Nigerian Stock Exchange.” Daily Independent