Minister Of State, Aviation , Senator Hadi Sirika’s Presentation To Stakeholders

Being A Presentation by Minister of State, Aviation , Senator Hadi Sirika At Aviation Stakeholders Consultation Forum And The Issues Raised

Outline

Section 1: Introduction

Section 2: Challenges facing the Industry

Section 3: Strategy

Section 4: Achievements till date

Section 5: Concerns raised by the stakeholders

Section 6: Infrastructure deficit in Nigeria- Transportation

Section 7: Cargo Throughput at Nigerian ports

Section 8: Indicators of service and utilisation of pre- and post concession of ports

Section 9: Highlight of successes recorded 10 years after

1.Introduction

The purpose of this presentation is to appraise Stakeholders of the progress so far achieved in the aviation sector since the last Stakeholders forum in May, 2016 and to align on concrete plans to transform the sector over the next 2-3 years.

Challenges facing the Nigerian Aviation Industry
Employment policy for Aviation Professionals
Foreign Exchange
Rising price and scarcity of Jet A1 (Aviation Fuel)
Waiver on Aircrafts and Spares
Budgetary Constraints
Decaying/ageing infrastructure and obsolete equipment è Terminal Buildings, Control Towers, Central Air Conditioning Systems, Conveyor Belts (built in the 1970’s) etc
Poor and Intolerable condition of airport facilities and equipment ( long wait-times check-in, security screening and baggage pick up)
Ageing and over bloated personnel within the agencies
Inadequate safety, security and surveillance equipment
High cost of funds and shrinking capital market
High debt profile of Domestic airlines operators
Inadequate human capital development/capacity building of aviation experts
OUR STRATEGY
Stakeholder Engagement Approach

As part of our consultation efforts, we continue to engage key stakeholders in the sector to refine our strategy and embark on an implementation plan. Our stakeholder engagement approach includes:

Several discussions with domestic and foreign airline operators
Consultations with international agencies and regulatory bodies (e.g. ICAO, IATA, TSA, SITA, ) to ensure our strategic approach is in line with international best practices
Held dialogues with related Intergovernmental agencies (CBN, Ministries of Finance, Interior, BPP, DMO, AMCON)
Meetings with Unions and key aviation bodies;
Discussions with airport operators all over the world.

OUR STRATEGY ii.

Strategic Focus

The FMoT remains committed to making air transportation the preferred and safest means of transportation, creating a self-sustaining business model and driving socio-economic growth in Nigeria.

Our Main Focus is:

a) Develop a hub to take full advantage of our potential.
b) Develop requisite capacity and manpower especially Aviation business Managers and scientist to engage in research and development.
c) Establish a business model that will make the industry self-sustaining model through Public Private Partnership
d) Maximize the contribution to the socio-economic development of the Nigerian Economy through increased trade and in-flow of FDI, focusing and growing of agro- allied designated airports and resultant job creation.
KEY ACHIEVEMENTS TILL DATE

While resolutions to all impeding challenges facing the sector remain key to attaining our vision, we have focused our efforts in the last few months on the following:

Reviewing and improving the Bilateral Service Agreements (BASA) on a case by case basis to ensure Nigeria obtains maximum benefit while flexibility clauses will be included to facilitate and protect National Interest
Runway resurfacing at Abuja, Enugu and Lagos (taxi way)
Completion of ongoing projects in the airports nationwide.
Exploring Alternative Funding sources (i.e. Pension Funds)
Drive towards a lean organization for the agencies – Pyramid model (currently top management heavy). Proper placement of staff for efficiency and fairness commenced with FAAN.

STAKEHOLDER CONSULTATION – CONCERNS RAISED BY STAKEHOLDERS

“How can there be concessions of airport without job losses”

What we plan to have is more jobs. Our aim is to increase the size and capacity of the airports through PPP by attracting investments, to create the much needed hub in West and Central Africa.

In 2007, Jordan awarded a 25-year concession for the Queen Alia International Airport in Amman following a competitive bidding process. The project included rehabilitating existing facilities, constructing a new terminal with a capacity of 12 million passengers per year, and operating the airport. The project generated more than $1 billion in foreign direct investment and lead to the creation of 23,000 new jobs over its lifespan.

These are type of economic and job creation benefits we will attract by using PPP for our airports.

STAKEHOLDER CONSULTATION – CONCERNS RAISED BY STAKEHOLDERS

7.” Rather than sanitize the system by eliminating/restructuring those political jobbers that the Honourable Minister had approved earlier as unfit to remain in their current positions, what we are seeing and observing is that some elements are playing to the gallery and making mockery of the efforts of industry Unions, by accusing us of lacking in understanding the difference between privatization and concession. Whichever of these options, workers are bound to lose their jobs but what will they go home with yet is to be worked out and or determined or is there anyone out there planning any mischief against our esteemed

The Ministry has commenced the restructuring of the agencies, which will be done in phases. We intend to boost the morale of staff within all the agencies.

With respect to industry unions, we feel there seems to be a general misconception between concession and privatization, which we intend to address and differentiate through workshops and stakeholder consultations.

There are a number of Airport PPPs that have taken place around the World without workers losing their jobs. We intend to work closely with workers when structuring the PPP.

Usually the private sector pays much better salary and the tendency is FAAN staff with requisite experience will take up job offers offered by the PPP partners.

12.” Institutionalisation of policy/legal frameworks and training of key actors rather than the voices insisting that the airports must be concession. Nigerians would wish to know if the concessions will be a contract or a lease?”

The TA will highlight the legal and regulatory framework required for this PPP to be successful.

Nigerian would know the structure once the TA completes the first stage which is production of an Outline Business Case (OBC). Concession, lease, BOT, BOOT etc are all different forms of PPP. We intend to conduct these PPPs in a well-structured, planned and transparent manner. This transaction will be conducted in full alignment with the national PPP policy. Stakeholder engagement and buy in is a key requirement of the national PPP policy