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FAAN Loses Billions On Aero & Non-Aero Revenue Sources

02/16/10

FAAN Loses Billions On Aero & Non-Aero Revenue Sources

Permalink 02:31:55 am, by lateef lawal, 549 words   English (US) latin1
Categories: News
*Nigeria: FAAN Loses Billions

[ Commercial Department in illegal waiver scandal ]

By Lateef Lawal

Federal Airports Authority of Nigeria(FAAN) may have lost several billions of naira in Internally Generated Revenue(IGR) from both aeronautical and non-aeronautical revenue sources. This may have been due to the connivance of some officials of FAAN's Commercial Department in illegally giving waivers to some companies and tenants of the authority.

FAAN position contrasts Babatunde Omotoba's (Minister of Aviation) directive that all agencies including FAAN must ensure that all accruable revenue be collected from all debtors. Omotoba further directed that all concessionaires, including oil companies must pay agreement concession fee of 5% and that audited accounts of all concessionaires must be obtained.

Contrary to the ministerial directives, officials of FAAN Commercial Department have allegedly cultivated the corrupt culture of unilaterally waiving debts for personal aggrandizement to the detriment of the authority. This also denies the federal government revenue from taxes payable on such collections not duly paid into FAAN account. debts. ( Continues below..... )

FAAN logo On A Nigerian Map in Nigerian Flag  Colours

Photo Above: FAAN logo On A Nigerian Map in Nigerian Flag Colours

One of such illegalities was contained in a memo by a top official in FAAN Commercial Department asking the debt collector of the authority to stop collection of concession fees from oil companies that supply Jet-A1 to airlines at Lagos Airport. It is a known fact that most of the oil marketers are indebted to FAAN and in some cases when they pay, the real amount paid are not reflected in the books. This is evident in one of FAANs the letters reference no: FAAN/500/GM/COMM/495/VOL.1 and titled: RE:Concession Fees Payable On Annual Turnover from Trading Activities by Oil Companies(Jet-A1), it read: Please, be informed that oil companies supplying Jet-A1 fuel to the airlines at the airport do not pay 5% of their annual turnover as concession fees to the authority. Be advised to reverse them accordingly.

Among major debtors of FAAN which the debt collector ought to collect on behalf of the authority include but not limited to-Sahara Oil N532m, Mobil-over N200m, Total N779m and African Petroleum N800m. This is just from the Murtala Mohammed International Airport, Lagos alone. Similar illegalities are said to be going on at 19 other airports across the country. ( Continues below..... )

Airborne Plane

It has been found out that Joint User Hydrant Installation (one of the concessionaires) that had been in business in Nigeria for over 15 years did not have any land lease agreement with FAAN and officials in the commercial department did nothing while the illegality continued. Joint User Hydrant only pays rent without lease agreement.

For every liter of Jet-A1 lifted by an aircraft, the sum of N1.60 is expected to be paid as fuel surcharge to FAAN. If for example an aircraft lifts 50,000 liters for a one way flight, N80,000 is payable to FAAN, in one month (30 days), N2.4m and in one year (12 months), N28.8m. A FAAN inside source noted that with the number of aircraft plying the country's airspace and lifting several millions of liters of Jet-A1 every month, FAAN would be rendered unviable with diversion of the enormous funds from the lifting into private pockets.

Lateef Lawal (NigerianAviationNews)

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*Tags: Nigerians, FAAN, Abuja, Lagos, Yar’Adua, Africa, Masterweb

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