Oduah: FG Not Part of the Planned National Carrier

The Minister of Aviation, Stella Oduah, has said the objective of the federal government is to totally revamp airport facilities, make air transport viable and profitable both to investors, the government as well as farmers-through the perishable cargo project. She also said President Goodluck Jonathan’s administration had  ushered in a new culture of engagement in the partnership between government agencies and the private sector. She spoke with Kunle Aderinokun and Chinedu Eze in Beijing, during Jonathan’s recent state visit to China. Excerpts:

What are the benefits of this state visit to China to the Ministry of Aviation as the $500 million loan which the federal government secured from China Exim Bank that will be used to build the four international terminals will eventually be repaid?

The gains are numerous. Major among the gains will be the fact that the administration would have actualised a platform that channels passengers, investors to Nigeria because the new terminals will help us develop the needed capacity as more people would now like to travel from our country. It also means that the administration’s pivotal usage of aviation as catalyst for the economic growth of the nation would be realised in a much accelerated manner. Most important is the connectivity; the business that will grow from the capacity, using Chinese technology. The President Goodluck administration is to make Nigeria a regional hub, as the first step; regional hub for commerce, for training and for maintenance. All these we will accomplish in a very short time. So it is a very joyous time for us. It is a very, very exciting time for me in particular to be a Nigerian.

When the new National Policy on Aviation came out, there was a lot of protests, but now the protest has waned.  The question people keep on asking is: How is the director general of the Nigeria Civil Aviation Authority (NCAA) going to marry the new policy and the civil aviation regulations?

NCAA is a regulator of all policies. NCAA is a government agency given the responsibility to manage air transport and it is independent when it comes to regulating the aviation sector. The new director general is not a new person in aviation and therefore has huge knowledge on both the regulatory and management aspects of aviation. So I don’t have any fear on how he is going to implement the new aviation policy and regulations guiding operations in the industry.

You also know that we have economic regulatory directorate as we also have safety regulatory directorate and both will have to work together for us to have ultimate save environment and that is what is required in aviation. But having said that, people who are generally apprehensive about how the new policy and the regulation will work to achieve a synergy in improving the aviation sector are merely being ignorant because when you have a policy that has been in existence for 13 years and more and you don’t review it then it absolutely makes no sense because the industry is dynamic. Things keep on evolving; things keep on changing, especially in the technology driven aviation sector and the laws and policies would be in tandem with these changes in order to meet the challenges that would confront the industry at any time. Otherwise the country will be operating in a vacuum and the challenges will continue to grow. The essence of reviewing the policy was because it was no longer sufficient to accommodate the new trends in the industry, so it became mandatory that we should change the policy.

Now, in changing the policy what did we do? We expanded the scope of the policy. We ensured that the policy was still in tandem with global best practices; that the policy will stand the test of time; it is sustainable and will enable us combat those challenges that may confront us at any time. Those that are agitating, no apologies, but I think they do so out of sheer ignorance. They need to read the policy to understand that it is for the safety of the industry.

At his maiden meeting with stakeholders, the new Director General of NCAA, Fola Akinkuotu, introduced the Directorate of General Aviation, which we believe is going to check excesses in the private sector and with that it seems you have backed down on the declaration of manifest by private jet operators. Do you just want to allow the sleeping dog  to lie?

No sleeping dog will be allowed to lie. That is not true. The manifest declaration is mandatory. We are not holding the passenger responsible; it is the operator because the operator is a professional and knows the policy; that you do not fly without declaring the manifest and you are doing so because it is a safety requirement. So the yardstick is to ensure that the operator is penalised for non-compliance. And if they do it repeatedly the operator will not be allowed to fly anymore. Again, no sleeping dog should be allowed to lie.

You promised that you are going to install runway lighting at the airports that do not have airfield lightings. Have you started the process?

We are procuring now. We are going to do the entire international and local airports. We are doing them in phases. This year alone we are going to award about seven and as I said earlier, we are going to have back-ups on back up. We are going have the conventional, we have the solar and inverter. So at any given time we will have electricity at the airport and what we want to also do is to work with IPPs at the Lagos airport. In the next 24 months, God willing, we are going to have IPP replacing the current electricity supply that we have now because the present one is really not efficient, in my view. It is a very, very expensive way to operate, so if we can have gas and have IPP that costs nothing, why not go for IPP that is far much more efficient. So all these we are putting in place.

Everybody loved what you did in Kano; that is the remodelling of the international terminal, including the Central Bank Governor, Sanusi Lamido Sanusi, who unveiled it and praised the job done, but since that time criticisms from certain quarters have followed the project. What is your reaction to this turn of events?

I am going to try to act maturely in responding to that and I should say that politics should be taken away from national development; and the fact that this administration has been very, very fair in ensuring that development should be spread equally to every part of the country. Now, when we came in, the first remodelling projects we carried out were actually Kano and Kaduna hajj terminals, before we even started the commercial terminals. That is to show that for us, development is this administration’s priority; it is something that government should do for Nigerians and that is what government is doing. We do have a master plan and we are working in tandem with our master plan.

But it becomes frustrating when people put politics into development, and annoyingly so when it is done out of ignorance. For any operator to fly on any route, it must be commercially viable to that operator. That is one; two if the load factor does not encourage that route, nothing on earth will make them fly the route. That is the situation with Kano. We cannot force any airline to fly to Kano. We can encourage them but they must have passenger traffic that can encourage such operation. Therefore, we hope and will continue to encourage airlines, especially international airlines to fly to Kano. We have appealed to Emirates; we have appealed to Turkish Airlines and we hope that if the number (passengers) works for them, they will fly to the city. But we cannot force them to operate there.

The perishable cargo terminal that will encourage export of farm produce is a novel idea enunciated by this administration. What kind of support are you getting from both local and international bodies on that project?

The perishable cargo project is Federal Government project. If you recall, the President launched Fresh Produce Transformation Programme and the platform that will actualise that is perishable cargo terminal and government is constructing 13 of them and will later extend it to 16. The encouragement we are getting from international organisations is immense. The reason for this is because the available potential of that programme is huge. If you look at Kenyan, Ethiopian and South Africa economy such export contribute to their foreign exchange accruals. If you take Kenya alone and do multiplier effect of the country, which is about the size of, let’s say, Enugu state and let’s say you have Kenya’s economy spread over 13 states of Nigeria, government would have holistically bottomed up the growth of our economy. This means that domestic economy of the country at the rural level would have had independent access to international market. It means that our aunties, our cousins, our relations living in rural communities will have access to international market. We would have developed some rural economies that would be independent of allocations from the Federal Government and independent from oil resources.

It would be one of the greatest platforms for government to stop rural, urban migration. It will grow employment opportunity; it will have all the value chain properly ad completely developed. It will encourage the growth of new middle class. That will be great; we are looking forward to finally accomplishing that. Infrastructure in terms of the cargo terminals will be ready by the end of this year. That is unprecedented.

What is the budget for those 13 cargo terminals?

It is smaller than you think, really. We have these cargo terminals in different sizes; we have mega, we have medium and smaller ones. The average cost of a cargo terminal runs to N420million  to 860 million. For me that is really prudent.

Do you intend to get the governors involved because the farmers need enlightenment; they need to know about this lofty plan for them?
 

Government has set up inter-ministerial committee led by aviation because we are key players in the programme, in the sense that we are providing the infrastructure; the platform and so we are working with the Ministry of Agriculture, the Ministry of Water Resources, because water has to be available, we are also working with the Ministry of Finance. The Ministry of Agriculture will provide the seedling for the cooperatives. We are also working with the states. The states will have to make it work. We are working with the local government chairmen because they will also have to make it work; we are also working with the cooperative societies. We have our plan and part of the road plan will be for us to go to rural areas, local governments to sit down and discuss and tell them how they can benefit from this programme and how they can key into that. We also need mediators because you have to connect the farmers to international market. The carriers, the middle men, everybody will have to work together for the programme to benefit all of us. But I think everybody is excited to have it started.

Many Nigerians are happy about the airport facilities that have been remodelled. How many are you working on now and if you perceive that a contractor is not doing well or is slowing the job, what do you do?

We try to encourage the contractors not to embarrass themselves and because for us it is totally unacceptable. We had terminated contracts and given the jobs to other contractors when the jobs are not done well because there is really no room for non-performance. First, we want the job to be completed in time. Two, there is zero tolerance for inefficient job. We tell the contractors, this is not the normal government jobs you take and do at your pace.

We have timeframe and you must work in tandem with our timeframe. We are going to launch Owerri and Yola airports and Port Harcourt Phase 1 is ready so we hope to do that by the end of next month. Lagos expansion is also ready. We expanded Lagos and added about 20,000 square meters on both wings of the terminal, including the fingers. That we are also going to open by the end of next month. And thereafter we are going to do Calabar and Jos by the end of October. The second ones will be Markurdi, Sokoto; Sokoto is ready. We are going to do Sokoto end of next month. We are going to also do Ilorin. So we are going to be doing them serially. All these are ready and others are coming up.

I noticed you are expanding the fingers at the international terminal of the Lagos airport. What is the purpose?

To create sufficient capacity because we do not have the capacity; we want to create transit lounges. If we are going to be a hub those that are transiting should have a place to stay until they depart and it must be a highly sanitised environment. Also, airlines don’t have lounges so we are creating lounges for them. We also want to create space for the processing of passengers. You know when you are travelling the place is usually congested, especially summer time. We are regular travellers, we travel all the time but we do not have sufficient space and we are growing in double digit and we don’t have enough space. So in doing that we are trying to create retails so that passengers as they are travelling will be able to do their shopping and we get revenue from that. Above all, we want to create adequate space for passengers.

FAAN has been mired in controversy over concession agreements between it and AIC Limited, Maevis Limited and Bi Courtney Limited. What is your perception about these agreements and how do you intend to resolve these issues?

They were wrongly done; wrongly structured and actually structured to defraud and not to perform. That, for us, is not acceptable. I give you the AIC, for instance. The lease given to AIC Limited was not given as concession; it was given as an approval to construct hospitality facility. The transaction was done about 20 or so years ago. Now, nobody can collect, in any country that I know, a lease which you failed to develop for 20 years. Two, it was wrongly done. It is located in front of the apron. Security wise it is not done. I do not know on earth where you have hotel in front of the apron. What does that mean? It is not done; it is not security compliant. And so what FAAN is saying is that AIC cannot be allowed to develop that land because it is not safe. It is not safe for those that will be in the hotel; it is not safe for the aircraft; it is not safe for the nation, especially in view of the security challenges we are facing.

And so we will reallocate AIC a land where they can construct, if the company really want to construct; if the intention is not to collect the land and use it to get loans from banks because that is what many people do. They collect land with the intention that they are going to develop but what they do is that they use it to collect loans from banks. We don’t have that kind of leverage now. Land for us means infrastructure; land for us means revenue. If it is not utilised for that effect, then we shall have to reallocate it. Usually there are time frames: six months. If you do not commence the project in six months, you lose it to someone else who has the capacity to do so and this is clearly written. And so, for the fact that AIC did what they did, FAAN may not consider allocating another land to them. More so, the court gave the judgement to FAAN. The impunity of their action was embarrassing. And this is what FAAN and the aviation industry suffers all the time. It is executive impunity.

Where do you intend to site the new international terminal at the Lagos airport?
 

It will be built next to the existing international terminal.

Many Nigerians are sceptical about your programme to float a national carrier. Many believe that it will not succeed, looking at the past experience and others do not see how government can begin to acquire aircraft for airlines. Can you clear these doubts and explain how you intend to do it?

The business model we have is completely different from Nigeria Airways. It is a private sector driven initiative. What government is doing is to create enabling environment and ensure that all the potential investors have the assurance that this will work and also set the policy that will drive the project. We want to make the policy that will be sustainable; the policy that will guide the investors and the stakeholders. And how do we want to do this? Simply put: government is saying that for this to work, these are the rules. We are looking for equity investors, we are looking for core investor, and we are looking for technical investors. The core and the technical investors will work together to assume the initial equity holding. The remaining stock could now go to the stock market for Nigerians to subscribe so that any Nigeria that wants to buy will buy.

But what is important to us is that it must have everything that will make it a global airline. It will be an airline that will be managed efficiently, including its assets. For that to happen, we must set the rules ab initio. We have to carefully do this because the airline will be flying our flag; it will represent all of us. And because of the importance of a national carrier to the viability of air transport in any country, the potential and the growing market in air travel in Nigeria, we want Nigerians to subscribe and become part owners of the airline. This is why we are taking it to the market.

Also government wants Nigerians to benefit from the bilateral, commercial advantages that accrue to a national carrier. That is as far as government involvement goes. So government is not part of the national carrier project; government is not subscribing to national carrier and government has zero equity in the national carrier. So it has no semblance to the defunct Nigeria Airways.

When is it going to take off?

Very soon, but definitely this year will not go by without it taking off.
 

Now that this idea has come, does it reflect in the new Bilateral Air Service Agreements (BASA) Nigeria signs with countries its airlines operate into the country, as some of these viable routes have to be ceded to the national carrier? Are you going to disengage some of these routes already given to airlines? If not, how do you intend to empower the national carrier?

It is very simple; through the law of bilateral. It is done by reciprocity so if we have national carrier automatically we shall partake in the routes. What we do administratively is to write to these countries and tell them that this is our national carrier and in view of the law of reciprocity it will be flying your route. So the routes the airline will be flying will be decided by its management. It will decide on the routes that are viable at the international level and write for the necessary approval.
 

What is your prediction of Nigeria’s air travel passenger movement by 2026?
 

I predict 40 million.

 

Source:Thisday 

http://www.thisdaylive.com/articles/oduah-fg-not-part-of-the-planned-national-carrier