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Lawmakers on Warpath over $500m Chinese Airport Loan

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It was a tensed atmosphere yesterday at the Ministry of Aviation, when some members of the House of Representatives, disagreed over the appropriateness of the  $500 million Chinese loan secured last year by the federal government for the remodelling of the Port Harcourt, Abuja, Lagos and Kano airports to international standard.

They demanded the full terms of the agreement, the interest accrual and the timeline of the loan.
The supervising Minister for Aviation, Mr. Samuel Ortom, however promised to provide the details within five days, even though he noted that he was not in the ministry when the agreement was reached.

This is coming as Ortom is seeking a means of settling the N174 billion debt owed contractors since 2011. "Contractors whose certificates of completion of work are ready are on our neck and they are threatening to take government to court.

“I don’t think we can raise the money to settle these outstanding within a year. We are however strategising with the inter ministerial committee to find a way out,” he added.

While trying to calm frayed nerves, and advising its members not to derail from the purpose for which they were at the ministry, which was to conduct its oversight function, the Chairman, House Committee on Aviation, Mrs. Nkiruka Onyejeocha, said: “Colleagues, we are here on oversight. I know that we have a lot of concerns. Please my colleagues, I beg to disagree that we shouldn’t talk about remodelling our airports with that loan.

"The loan was sought to remodel the four airports, which were already decaying, however that is not to say that we don’t need equipment like the Instrument Landing System (ILS) and all the instruments that will help us land, but of course we the government have to remodel our airports because before now, the airports were in a mess, there were no seats and the toilets were in bad shape."
However, an aviator who is a member of the Committee, Hon. Adun Jim Aiku, representing Egor/Ikpoba-Okha, Edo state, who was visibly angry over the procurement of the loan said: “I think the mistake has been made long ago, we want to see the agreement for the  $500 million Chinese loan.

“People tend to have misconception about airports, with all these issues of contracts pending right from the outset, you must think of what makes an aeroplane fly like the instrumentation of the airports. I’m an aviator, you come to an airport like that in Benin, there is no ILS in the Benin airport.

“That airport should be closed down. It is not beautifying the terminal buildings that make an airport; we pray that nothing bad happens. If you are there securing such a huge amount of money, you think first of how to provide instruments at the various airports. Look at the lightening systems in Lagos, up till now we are still in category 2.

According to him, it was a mistake to have channeled the money into remodelling, while neglecting safety. He said the mistake has been made and somebody must pay for it, because we are putting these monies into the drains. I want to make sure that things are done properly.”

Onyejeocha, while expressing anger over the ministry's high debt profile said: “Aviation has been in the news, but suddenly nothing is being heard about aviation, the question is what has happened to all those projects. Some airports were said to have been completed but yet to be commissioned, what happened to those projects, why have they not been commissioned, what has gone wrong?

“And of course it is worrisome that you are presenting a debt profile of N174 billion. Where are you going to get the money to pay back? Why the huge debt? It is very worrisome, inasmuch as you have set up an inter-ministerial committee to look at those issues. I wish to state here that the committee is frowning at such debt profile because we know that monies have been appropriated for most of the things that you have been doing in aviation.”

She requested that due diligence be carried out on all completed, ongoing and yet-to-take-off projects, adding the  even the ones that have been paid should be looked at "because I don’t think it is right at all as it is scary to have a debt profile of N174 billion in the ministry, as I don’t know where you are going to get the money to pay back the debt."

She said: “What it means is that aviation will keep paying debt till the next 20 years, looking at the appropriation that we have. This is a serious concern for this committee as I do not know how the aviation ministry will be mortgaged to the indebtedness of N174 billion, because we cannot be here for the next 20 years paying debt."

When asked to shed more light on how all the $100 million Debt Management Office (DMO) loan, the $500 million Chinese loan and the huge debt of N174 billion which have accrued since 2011 till date came about, Ortom, who was not involved in the loan sourcing, since he assumed office three months ago, said some of the projects have been completed and only awaiting President Goodluck Jonathan’s approval for commissioning.

On the debt profile, he said: “I assumed office only few months ago, we have not awarded any new contract. They are the debts that were inherited and we are not embarking on any new project for now because of the high debt profile.

“On the DMO $100 million and $500 million Chinese loans, I was told that these loans were handled by the Ministry of Finance. The Minister of Finance, Dr. Ngozi Okonjo Iweala,  told me that both the loan and the counterpart funding were captured in the budget and I will get the details from her as the loans were not handled by the aviation ministry. We have set up an inter-ministerial committee that would evolve a strategy for repayments.”

According to Ortom,  "part of the agreement was to allow the Chinese companies handle the construction of the four airports. He said: “The Chinese companies are handling the remodelling and that was part of the agreement that was entered into as I was told.”

Article Credit: Thisdaylive

Updated 4 Years ago

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