OrderPaperToday – The House of Representatives has queried the aviation minister, Hadi Sirika, over a proposed expenditure of N3.5 billion for the national carrier project and consultancy for airport concessioning in 2021.
The House Committee on Aviation headed by Mr. Nnaji Nnolim (PDP, Enugu) accordingly demanded explanations from the minister.
Mr. Akin Alabi (Oyo, APC) was the first to point out inconsistencies in the budget. He said: “A lot of Nigerians are not impressed about the national carrier project, the working capital for the national carrier in the 2020 budget, N2.2 billion allocated and this year 2021, you are asking for N1 billion.
“Can you explain what you mean by ‘working capital’ because I know it is definitely not to buy planes so can you explain what this billions year in year out is meant for as regards working capital.
“Then secondly for the concession of four international airport, Lagos, Abuja, Kano and Port Harcourt, last year, N297 million was budgeted for it and this year, you are asking for N200 million.
“What type of consultancy is this that will cost half a billion? For the national carrier, you are still requesting for N250 million for consultancy?”
In his response, the aviation minister said the ministry was out to establish a strong national carrier that is befitting of the population size, market, manpower of Nigeria and that will add value to the economy.
According to Sirika, the ministry had grown the number of passengers in Nigeria from 8 million to 18 million since 2015 and airplane management had significantly improved.
“This can be made much better if we have a well-established, well-structured private sector led national carrier.”
He explained further: “The fact that the money is there in the budget, does not mean it was released or utilised; since we began this project, the amount spent on the activities of carriers so far if I am not mistaken, is N350 million.
“By the grace of God, I want to assure this committee and indeed all Nigerians that this national carrier will come to be and it will be for the benefit of our people.”
Speaking on the consultancy for the contentious concessions of four airports in the country, the aviation minister said:
“I think there are a lot of misconceptions about this concession. In the first instance, you can actually built a structure to international standard, very operational, make it very beautiful and then of course concession it so that it is run better.
“So, you can improve on an infrastructure so that during the concession, you make more because it is the aggregate value of your asset that gives the negotiating power to negotiate more for yourself from the concessionaire.
“That is the explanation for that Mr. Chairman. So, we will continue to improve on this infrastructure, so that when they come, it gives us the leverage to have the negotiating power to give us the better deal.
On the 2020 budget performance, the minister further disclosed that the initial amount appropriated for capital was N40,278,371,737 and it was reviewed downward to N33, 360,431,379 and N19,449,548,171.34 was released which translated to 59.3 percent of the appropriated amount.
“In 2021, the sum of N78,960,310,809.00 is being proposed for capital expenditure at the headquarters in the aviation ministry and the emphasis will focus on the implementation of the aviation roadmap as approved by Mr. President. The roadmap would be implemented through Public Private Partnership (PPP). The programmes in the roadmap include establishment of national carrier,” he said.
Sirika said also in the works are Establishment of Maintenance, Repair and Overhaul (MRO) facility; .Development of Agro-Allied Cargo Infrastructure; Establishment of Aviation Leasing Company; Search and Rescue Unit; and Establishment of Aerospace University with the support of International Civil Aviation Organization (lCAO).
“The sum of N250,000,000.00 is being proposed as overhead expenditure for the 2021 fiscal year in line with the envelope system arising from Budget guidelines. Similarly, the sum of N397,197,105.00 is being proposed as Personnel Cost bringing the
“Total recurrent cost to N647,197,105.00. It should be noted, however, that the Personnel Cost is paid from FGN Treasury by the Office of the Accountant General of the Federation under the Integrated Personnel Payroll Information Systems (IPPIS),” the minister said.
The aviation minister had told the senate last month of plans to relaunch the national carrier after a failed attempt some time ago,