Economy
State governments turn new airport projects into waste pipes … lose trillions
By AYOOLA OLAOLUWA
Most airport projects initiated by state governments across the country are currently rotting away after gulping several trillions of naira in development and construction costs, Business Hallmark findings can reveal.
According to findings, while most of the projects have been abandoned owing to shortage of funds, those already completed and in service are floundering due to low human and cargo traffic.
Data obtained by BH from the ministry of aviation shows that the projects are scattered across the six geographical zones and 23 states.
For instance, Ekiti, Osun, Ogun, Oyo and Lagos States in the South West have one airport each; Ebonyi, Anambra and Abia in South East one each; Bayelsa, Delta, Akwa Ibom and Cross River in South South one each; Jigawa, Zamfara, Kebbi and Katsina in North West one each; Nasarawa and Benue in North Central one each, while Bauchi, Taraba, Gombe, Yobe and Adamawa in the North Central have one airport each.
However, most of the projects which are at different levels of execution, sources told our correspondent, are mostly financed through huge loans which the states are struggling to service.
A recent visit to some of the airports revealed that they are in bad shapes and now harbouring criminals, reptiles and other dangerous animals.
In Lagos, the state government is building the Lekki-Epe International Airport designed to fly over 5 million passengers annually.
Started during the administration of former governor Babatunde Fashola in 2009, the airport project, designed to cater for Airbus A380, making it a Code F compliant airport, is sited on 3500 hectare of land 10 kilometers from the Lekki Free Trade Zone (LFTZ) and was originally proposed to open in 2012.
In 2011, the state government appointed Stanbic IBTC Bank as financial adviser for the airport initially projected to cost N102 billion.
However, several years after and with billions already spent, the project is still not ready for use due to several challenges, including opposition by landowners, as well as delays in investors committing to the airport financing.
In order to gain the support of land owners for the project, BH learnt that the state government had returned some of the acquired lands to 98 local villages.
Yet, the airport project is currently lying fallow, devoid of activities. Multiple sources put the cost of work already done at the site as at December 2020 at over N150 billion.
Another state that embarked on a mega airport project that resources of the state could not cope with is Osun. Despite the fact that the state is one of the poorest states in the country, based on federal allocations and internally generated revenues, former Olagunsoye Oyinlola embarked on the construction of the Osun International Airport located in Okinni, Egbedore Local Government of the state in 2006.
The project later stalled as Oyinlola could no not achieve much before leaving office. However, the project received the attention of Rauf Aregbesola who reawarded the contract at N4.5billion, renaming it MKO Abiola International Airport.
BH reliably gathered that the governor had sunk over N5.6billion into the project, when the economic recession that hit the country during the administration of former President Goodluck Jonathan, bankrupted many states, particularly Osun.
Unable to continue with the project owing to lack of funds, the state government entered into a N69billion concessional agreement with a private firm.
The administration of Aregbesola, it was gathered, had deployed over N20billion into the construction of the airport. However, despite the huge investments by the state governments and the preferred investor, work on the site has stalled, with the site turned to grazing ground for Fulani herdsmen and their cattle.
Since Aregbesola left office, the project has been abandoned as the current Governor, Gboyega Oyetola, has continuously focused on the projects he initiated.
The case of Ogun is far worse, as the state is currently battling with not one, but two unviable airports: the International Airport located at Imosan Village, Wasimi, Ewekoro Local Council and the Gateway Agro-Cargo Airport at Ilishan, Ikenne Local Council area of the state.
The international airport at Wasimi, though was conceived in 2005 by both the Federal and Ogun State Government, the execution is to be financed exclusively by the Federal Government.
According to available information, those behind the idea meant it for several purposes, including the importation of machinery and industrial raw products, export of agricultural products, a pilot training school, among many others.
While the project was awarded about 20 years ago by the administration of former President Olusegun Obasanjo, successive administrations have released funds running into several billions of naira for its execution.
However, despite the release of several billions of naira expended on the project, the only visible infrastructure on ground during a visit to the site is the perimeter fencing, measuring 5 by 5 kilometres. However most of the fence had been demolished to pave way for the ongoing Wasimi-Imosan Road project.
While the projects have been abandoned and become a hideout for dangerous criminals tormenting residents of the area, it was observed that land-grabbers, popularly known as ‘Omoniles’ have encroached on the land.
A cement block-maker located on a portion of the land told BH that he bought 6 plots of land on the site about five years ago for N1.2million.
Asked why he purchased a land that is under government acquisition, he denied having any knowledge of the land belonging to the Federal Government, noting that some of his customers are government agencies and parastatals based in Ogun.
“I doubt if the government has acquired this land. I bought it more than five years ago and have not recorded a visit from government officials.
“No shaking, nothing do me! Even, some government agencies in this area do patronise me by buying blocks and interlocking tiles for their projects”, the block maker who simply identified himself as Tajudeen boasted.
While the Wasinmi airport project remained stagnant and seemed to have been forgotten by the government, another airport project, the Iperu Cargo Airport sited between Ilishan and Iperu Remo in Ogun East Senatorial District, was flagged off by the administration of former governor Gbenga Daniel as a hub for a new industrial town, providing services and business opportunities to people of the state.
First signs of what to come emerged in 2005 when former President Olusegun Obasanjo, who hailed from the state, refused to grant the necessary approval for the takeoff of the project.
Reprieve however came for the doomed Gateway Agro-Cargo Airport in 2008, when late President Umar Musa Yar’Adua granted cargo and passenger license status to the airport.
The euphoria was again short-lived after Daniel’s exit, when his successor Senator Ibikunle Amosun declared the project a non-priority.
Subsequently, after feasibility and development studies of the airport project were done, including payment of compensation to original land owners, the state government set July 2008 for the beginning of the airport after a well attended contract signing ceremony with Dar-Al Hadassah of Dubai, United Arab Emirates, for the construction works.
However, after billions have been sunk into consultancy for the master plan, feasibility study, environmental impact assessment and technical design, topography survey, as well as soil testing, the ensuing faceoff between Governor Daniel and members of the state legislature stalled the project.
The embattled governor was not able to achieve any progress until he left office in 2011. His predecessors, Senator Ibikunle Amosun and Dapo Abiodun did not see the project as a priority.
Today, the airport is a forgotten project, dragging down with it into the abyss over N40 billion of much needed funds. The site is now a dumpsite with scavengers and rubbish collectors competing for space.
The situation is not much different in another South Western state of Ekiti where an ambitious airport project is taking ages to realise.
The N20 billion Ekiti Airport located between Ado-Ijan-Igbemo and Afao Ekiti dated back to 2010 during the tenure of former Governor Ayodele Fayose who acquired the 4, 000 hectares land from rice farmers. The project was initially estimated to gulp N3billion, but reviewed upward to N9billion, N11billion and later N17billion.
However, owing to paucity of funds, the state Governor, Kayode Fayemi, brought in the private sector in a Public Private Partnership (PPP) arrangement, further pushing the contract to N20billion. Unfortunately the PPP arrangement didn’t materialize, forcing the governor to actively involve the state in the financing of the project once again.
In March, Governor Fayemi handed over the construction of the airport 3.2 kilometres runway to the main contractor, CCECC Nigeria Limited, to commence work. BH reliably gathered that over N30billion have been expended so far on the project which many financial experts described as a white elephant project.
In the North East, the Yobe State government had spent over N18 billion on the construction of the Damaturu International Cargo Airport between 2017 and 2021. According to a government source, the contract was initially awarded at N11 billion, but was increased to over N18 billion as a result of variations.
The airport will soon be ready for use after the installation of some runway lighting equipment been expected from abroad.
Likewise, the Adamawa State government has commenced the construction of an airport in Mubi area of the state.
Already, the site has been cleared, while the technical team is working with the state government’s consultants on technical evaluation of the project which will cover six square kilometres. The width of the site is 3.2 kilometres, while the runway measurement is 2.4 kilometres.
Other airport projects still under construction include the Ahmadu Bello Airport in Kebbi, Nassarawa, Ebonyi, Abia, Zamfara, Gombe, and Benue States. The average amount spent on the airports, our correspondent leant, is in the region of N25billion to N40 billion.
While virtually all airport projects in the South West are largely idle and currently inactive, others in the South East, North West and South South have been completed and running.
For example, airports constructed by Bayelsa, Anambra, Always Ibom, Delta and Jigawa State governments are currently in operation.
The Yenogoa airport, it was learnt, cost the state over N100billion, while the first phase of the airport in Anambra State which was inaugurated in March had gulped over N50bn. At full completion, the airport is expected to cost the state $2billion (about N900billion).
However, most of the airports are devoid of the needed human and cargo traffic to ensure their continued stay in business. An official of the aviation ministry confided in BH that the airports have not been generating the much expected revenue as they remained unutilised except for chartered flights and private jets that land in them occasionally, despite costing their owner over N1.4trillion.
“A typical example of sheer waste of scarce resources is the Dutse International Airport in Jigawa State. The airport’s close proximity (less than 100 kilometers to Mallam Aminu Kano International Airport) makes it totally unnecessary.
“Many international airlines have cancelled their operations there due to persistent fall in passenger traffic. With only a handful of international and local airlines still operating there, the Jigawa airport is more like a glorified airstrip than an international airport.
“The airports closeness to Yobe, Bauchi and Kano States has not attracted the much expected patronage for the new which is only serviced by Overland Airways. With skeletal flight services between Abuja and Dutse, the state capital, the hope of facilitating agro-allied export from the airport remains a pipe dream.
“And why should Ekiti build a N22 billion airport when the proximity of the unviable Akure and Ibadan airports to the state is sufficient grounds for her managers not to waste the state’s scarce resources on an airport”, the source queried.
Also, the Akwa Ibom Airport in Uyo which began operations a few years ago and was built at over N20 billion has relatively been unviable as only a few airlines including Arik Air and DANA Air operate flights into it.
In the same vein, the Bauchi Airport, built by former Governor ISA Yuguda at over N7.9 billion is also inactive. Apart for a few chartered flights and lifting of pilgrims to Saudi Arabia during hajj, the airport is practically inactive.
Meanwhile, experts in the aviation sector have decried the spending of huge funds by state governments for the construction of airports, arguing that most of the projects may not add any value to the states’ economy.
The Chief Executive Officer, Centurion Security and Safety Consults, Group Captain John Ojikutu (retd.), said, “I have repeatedly said that most of the states building airports now have no economic justification for such projects, based on available statistics in their states, especially the statistics for passengers and cargoes.
“The air passengers and cargo traffic between Yobe, Bauchi, and Gombe are not together up to 500,000 and 10,000 respectively. These do not make economic sense, if you consider the support that is needed in the health and educational sectors for the generality of the people of these states where the workers are hardly paid monthly salaries.
“Same with Ebonyi and Anambra that are within minutes away from Enugu and Asaba, even their boundary towns are close to Owerri.”
According to the aviation expert, the total air cargo in Nigeria is still below 200,000 tonnes annually as against 100 million tonnes in maritime, while the total air passengers annually has not exceeded 16 million in the last five years. “How much of that are they targeting?” Ojikutu questioned.
In his own reactivation, the Assistant Secretary, Aviation Round Table, a think-tank in the aviation sector, Mr. Olumide Ohunayo, said “State governments will always do projects. They can label it anything just to get money out of the system to run the projects.
“Ekiti has Akure airport, which is about 30 minutes from it. Ebonyi has Enugu airport, which is less about 30 minutes if the road is free. Anambra built an airport when there is Owerri and Asaba airports close to it.
“For the core northern states, Yobe is understandable because of the distance to Maiduguri, considering the high level of insecurity.
“But for the South, we need to begin to look at how to develop the economy of their states. Politics should not debar states from talking even if they belong to different political parties.
“I think states should build airports only when they will not have to service debts after the completion of the projects”, Ohunayo advised.
Also respondind, a former managing director of defunct Nigeria Airways Limited (NAL), Captain Mohammed Joji, said building airports should not be the priority of states in the face of dwindling revenues.
While advising the Ekiti State government to drop the idea of building an airport and join hands with neighbouring Ondo State to make the Akure airport viable, the former NAL boss also advised the Osun State government to cooperate with Oyo State to make the Ibadan airport more attractive.
Information obtained by BH indicated that except for the Murtala Muhammed International Airport (MMIA), Lagos and Nnamdi Azikiwe International Airport (NAIA), Abuja, other airports in the country can not generate sufficient revenue to cover their cost of operations.
For instance, all the airports cost FAAN at least N44.39b loss to maintain an overhead of 10, 000 workforce and to keep them in operations in the last three years.
According to the breakdown of revenue and expenditure of FAAN headquarters in 2017-2019, the agency generated a total of N16.09billion and collected N15.02billion in three years. However, it spent a total of N59.41billion, leaving a deficit of N44.39billion in three years.
Aviation experts blamed the deficit on government efforts to keep unviable airports running.
