Ministry owes N156.4b on projects

By IAfrica
In Nigeria
May 26th, 2014
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The Federal Ministry of Aviation is owing N156,450,345,779.39  for aviation  infrastructure development.

This was contained in the ministry’s presentation to the Senate Committee on Aviation in Abuja yesterday. According to the presentation, aside from this indebtedness, the ministry is also owing $500,000,000.00  Chinese loan and the Debt Management Office (DMO) loan of N18.23million (about  $100,000,000.00).

These loans the ministry said are being utilised for  international air port and four perishable cargo terminals.

At the presentation of the report on the verification of projects and the level of indebtedness of aviation ministry it was revealed that Phase 1 project has an outstanding indebtedness of     N740,437,215.70; Phase 2, N22,146,549,417.40; and Phase 3, N59,039,351,388.12.

Other sources of indebtedness crippling the aviation ministry are the Base Projects, N31,661,882,021.70; Special Projects, N16,708,858,021.70; Security Project, N9,443,549,531.25 and the Enugu & Bayelsa International Terminal, N16,709,717,656.40, thus bringing the project indebtedness of the ministry to N156,450,345,779.39.

The possible sources of the loan and debt repayment the ministry said will include  setting up inter-ministry committee to review the projects; releases from appropriation; setting up of a Sinking Fund Account/Airport Development Levy; Bilateral Air Services Account (BASA); security charge account, as well as to request for special intervention fund.

Speaking at the presentation, the Minister of Aviation, Mr Samuel Ortom said the ministry has decided to suspend some projects. To this end he said: “We are going to prioritise. In a situation where we have this kind of huge challenges, we have to prioritise what we do for us to ensure that we don’t have waste.”

Ortom also told the Senate Committee that he has foreclosed awarding contracts for now because of the staggering indebtedness of the ministry.  To this end, he disclosed that the ministry has resolved “to find a way out because there is a roadmap and we have no other choice but to complete this roadmap that has been approved by the Federal Executive Council (FEC) and ably supported by the National Assembly.”

He said a committee has been set up to look into the issue but the Senate Committee has also “asked me to produce the approval and I will produce it. We need to search the records to get the approval because everything has to be done through due process here in this ministry.”

Speaking on this development, Committee Chairman, Senator Hope Uzodinma said “the most important thing is that the projects conceived are very important projects that are very necessary and if for budgetary constraint they are not moving forward, we will find a way. There is no problem on that resolution. We will through constructive partnership create a solution into solving the problem and Nigerians at large will benefit from it.”

On BASA, the senator stated that “the BASA account will be regularised because it is one of the sources of funding. We will regularize whatever is not properly done there and ensure that we are positive about our movement.”

The committee however advised the ministry to also direct its energy towards safety and security of the aviation sector describing it as “critical” to the growth of the sector.

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