… says 'safety is my priority'
The Managing Director of the Federal Airports Authority of Nigeria (FAAN), Mr. Olubunmi Kuku, has fingered priority to tourism and cargo exports as vital measures in view of making unviable airports profitable.
Kuku, who was fielding questions as a guest on TVC Television station recently, said she was not of the opinion of shutting down an airport because it is unviable but rather investment should be plugged in to improve the return on such venture.
She noted that apart from the economics of the airports, which is viability, there is also the social impact that the airport brings into driving the economy.
She said: “So you’ve already made the investment in infrastructure, so what you need to do is really to plug that investment so that you can improve your rate of returns. I do not recommend shutting down those airports at all.
“And if you’ve had conversations with me over the last few months, what I will say to you is that there are two things. One is the economics of the airports, which is viability, but secondly, is also the social impact that the airport brings into driving the economy, or at least helping us to turn around the economy.”
According to her, there four critical areas that FAAN is focusing on in terms of interventions in order to improve the state of the airport.
She said FAAN has worked very closely with some of the state government in terms of what they can do, especially on cargo, stating that states like Kano and Ogun are looking to drive cargo effectively.
However, the FAAN Managing Director pointed out that it is not just about building the infrastructure or investing more in the infrastructure on ground but really making sure that there is a feeder system that starts all the way from the bottom of the value chain to drive cargo.
“The various segments of cargo, I think agro and farmer are two critical areas that we have been looking at. Agro specifically around making sure that there’s food security, so distribution of food items in the market, specifically within Nigeria, and of course, certain items that can be exported,” she explained.
She also mentioned the aspect of tourism, noting the detty December in Lagos that came with lots of business activities largely around driving the Gross Domestic Growth (GDP). “Look, I think if we want to drive economic activity at this airport, it is really to make sure that we’re able to drive the GDP growth,” she posited.
The third on the rung, according to Kuku, is really around improving the infrastructure linkage to the airport facilities, making sure that the road network that leads into the airport and the transit facilities that are available.
“I’ll give some examples; the FCT, for example, has a rail line that terminates at the airport. It makes it easier for people to come there, whether they’re travelling passengers or are there to conduct economic activity at the airport.
“We recently had a meeting with the Lagos state government this week; they do have a road that is coming in from Ali Moshe to also open up the area. So the linkage is very important in terms of making sure that we can actually drive this activity,” Kuku explained.
The fourth intervention, she said, builds around transit hubs; establishing certain locations as transit hubs, with Lagos and Abuja, as the main areas FAAN is looking at.
On the plan to concession major airports in the country, she corroborated the Minister of Aviation and Aerospace Development, Barr. Festus Keyamo, that there would not be any job loss, saying that the project is currently on a developmental stage.
Kuku also used the opportunity to clear the air on the N580 billion proposed for the construction of runway which has been criticised on social media as outrageous for just a runway.
She disclosed that the amount is actually meant for 17 runways including roads and perimeter fencing, while also noting the fluctuation in forex.
Her words: “I believe I’ve also just received a number of messages following our outing yesterday at the National Assembly. So I’d like to clarify two things. We have a number of runways in Nigeria today. So we have mentioned to you that there are 22 airports that are owned by the federal government. We also support some airports that are owned by the state.
“I did make specific reference to airports that had runways that had exceeded their lifespan. The average lifespan of a runway is about 20 to 25 years. A lot of our runways in Nigeria have actually exceeded that time, meaning that we’ve had them for 30 plus 35 years. And what it means is that we need to actually reconstruct those runways, the N580 billion that I initially mentioned is actually for over 17 runways.
“And it’s not just the runways. It includes some perimeter roads. It includes fencing. So I’ve seen some commentary where people are saying, what do they need all of this money for? I encourage you, please just look at Google if you’re in the construction business or in the aviation business to try and understand what it means to build runways, taxiway links, apron expansion work that we need to do, and of course, to make sure that we put a safe environment together for everything that happens on the air side.
“Now, the reference that the Honorable Minister made while we’re at the National Assembly yesterday was specific to the second runway project that is happening in Abuja. That project was initially awarded to some consultants and contractors by the previous administrations. I believe that from conversations with the Ministry, the scope of those projects has changed. There have also been price variations, of course, which is affected by the scope and, of course, forex fluctuations.”
Reacting to the call by some stakeholders in the industry for the establishment of aviation finance Bank, which would be a single digit lending rate for the sector, Kuku turned support for the call saying that that what is actually needed is a specialised banking that can be leveraged to meet peculiar needs of the industry.
“I’m actually not of the opinion that we should set up another institution for financing. I think that we have a lot of institutions that exist today who are finance houses. So for example, you have some of the commercial banks, even though we know that financing from commercial banks tend to be at double digit rates.
“What I do think we need is really more specialised banking, or specialised financing that we can leverage. We also need to consider things that would help us improve the financing environment, such as some sort of financial instruments, credit guarantees, for example, or backstops for the industry. So my focus would rather be on specialised financing and potential credit guarantees to support that,” she posited.
She once again read the riot act against touting and extortion at the nation’s airports, reiterating that the airports are tout free zones.
“And I also want to use this medium to let every Nigerian know that if you are stopped at the airport and someone is asking you to support them in any illicit activities, you will find yourself culpable, along with those officials. So I’m saying very boldly again, and I’m supporting my Honorable Minister to say that our airports are tout free zones, and we ask that you stop.
“We are putting in all necessary measures from our end to make sure that that stops as well, of course, with the continued support of the National Security Advisor and the Security Council which we meet. So it’s also our responsibility as Nigerians. You’ve heard me say it. You’ve heard the Minister said, if any agency, including mine, comes to you within the airport premises and wants to engage in such activities, it is your responsibility to tell them no. If they ask you for funding, tell them no,” the Managing Director retorted.
Kuku who is barely one year as the Managing Director of FAAN made bold to say she was ready to step on toes and even lose her job than jeopardise the Nigerian airport system.
“But what is important for me is to make sure that I do what is right. I do the needful, largely in terms of making sure that they’re critical infrastructure projects in front of me, making sure that Nigerians are safe.
“I continue to say that safety is my priority in the industry, making sure that our runways, our pavements, our airfield lighting, are up to par, to make sure that we can do that so the thoughts around you know, stepping on toes or being.”