The Senate has directed the economic and financial crimes commission to ensure the payment of debts owed the Federal Airport Authority of Nigeria, FAAN, to save country's decaying airports. The senate also mandated the Minister of Finance to submit a proposal on how to maintain and manage the Nigerian airports to the president.

The upper legislative chamber ordered the discontinuation of the revenue collection agreement with Maevis Limited, which they insisted has not made significant contribution to the revenue profile of FAAN.

The directive followed the outcome of an investigative report submitted by its Committee on Aviation, which was mandated to investigate the power outage at the International Wing of the Murtala Muhammed International Airport (MMIA), Lagos on Sunday, May 9, 2010, wherein it was noted that the huge debt was ultimately responsible for the outage.

"The incident at the Murtala Muhammed International Airport, Lagos was principally due to infrastructural decay", the committee said in its report adopted at the plenary by the Senate.

It noted the seven categories of clients owing FAAN to include: government (N1.4 billion); aviation handling companies (N1.1 billion); active airlines at both the domestic and international wings (N3.0 billion); dormant airlines at both the domestic and international wings (N2.7 billion); oil companies (N415 million); general concessionaires (N2.4 billion) and management concessionaires (N5.5 billion).

The committee also noted that FAAN spent N191.4 million between 2007 and 2009 from maintenance allowance budget and N137.5 million from special allocation for the same period on electricity billion, giving a total expenditure of N323.9 million on MMIA.

In addition, the FAAN management paid between N60 million and N87 million monthly on electrical bills to PHCN which cover the entire area of the airport, including staff quarters.

It said: "FAAN staff living in the staff quarters pay N20 monthly on electrical bills; Bi-Courtney Limited, operator of MM2 constantly refused; Maevis Nigeria Limited and Bi-Courtney Limited are among the 26 management concessionaires of FAAN.

"They claimed that FAAN's allegations that they owe N1,103,172,861.05 and N856,980,904.06 respectively as outstanding revenue collected and not yet remitted to FAAN were untue."

The Committee, led by Anyim Ude, also stated that more than seven years after the concession agreement was signed on MM2, the duration of the period of concession remained unclear.

The committee said in its report:
» "It was discovered that there were four agreements reached between FAAN and Bi-Courtney Air Services Limited (BASL) on the Build, Operate and Transfer (BOT) arrangement for Murtala Muhammed International Airport Terminal 2, namely: "Concession Agreement dated 24th April, 2003. In this document, FAAN entered into 12 years concession with BASL;
» Addendum Agreement dated 2nd February, 2007. In this document, the concession period was extended from 12 years to 36 years;
» "(Supplemental Agreement dated 26th June, 2004. Here, parties to the Concession Agreement undertook to re-negotiate Article 2.3 of the Concession Agreement which deals with concession period;
» "MOU Agreement dated 8th August, 2007. Nothing relates to concession in this agreement".

The committee noted that a request by Chief Femi Fani-Kayode as the then Aviation Minister, asking for former President Olusegun Obasanjo's approval for an extention of the concession period from the initial 12 years to 36 years was turned down.

The Senate then went ahead to adopt six of the 10 recommendations of the committee, asking all FAAN debtors to reconcile their accounts with the authority and pay within a mutually-agreed period.

It directed: "The Economic and Financial Crimes Commission (EFCC) should be invited to intervene to enforce compliance".

The Senate also asked FAAN to re-organise its Financial Management System to accommodate other things like introduction of penalty fees for late remittance of revenue collected on its behalf and the transfer of all banks accounts that management concessionaires are operating to FAAN for proper management and accountability.

It said:
» "That FAAN should dispense with the services of Maevis Limited since it was unable to add value to FAAN's revenue profile.
» "That the Minister of Aviation should submit a road map on the maintenance and management of Nigerian airports to Mr. President for approval to save Nigerian airports from decay and raise Nigeria's external image;
» "That the Federal Government should carry out a total overhaul of the management of FAAN in order to deal with the corruption and incompetence in the operational system of the organisation;
» "That in the interest of airport development and administration in the country, the Minister of Aviation should present the seven-year-old dispute between FAAN and Bi-Courtney on the concession agreement to the Federal Executive Council."