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T H I S D AY • FRIDAY, MAY 13, 2016
BUSINESSWORLD
INTERVIEW
Aligbe: Without Legislative Backing, Airport Concessions Lack a Legal Basis Industry consultant and CEO of Belujane Konsult, Chris Aligbe is of the view that the concession of airports must have legal backing. He also spoke on the government’s new policy for the establishment of a national carrier. Chinedu Eze presents the excerpts: The recent statement made by the Minister of State for Aviation that if airline wants to partner with Nigeria to establish a national carrier that the airline would be given conditions and two of the condition are that the carrier would have to transfer technology to the Nigerian personnel and build Maintenance Repair and Overhaul (MRO) facility. How is that possible? I listened to him and first and foremost I think every partner will have condition for partnership and will offer also his terms for partnership, it is a two-way thing. No partner will come without his terms for partnership and no partner will come into a place and not have terms for partnership. If you remember what happened with Virgin Nigeria, they came and we did not offer any conditions for that partnership and all that the former President, Chief Olusegun Obasanjo did was to accept that Richard Branson was going to invest and he gave him everything he asked for and that eventually became a fiasco. If you go to Saudi Arabia, United Arab Emirates (UAE) they have conditions for those who are coming to invest and those who are coming to invest also have the perks of their investment and also attractive conditions to enable them invest. So it is a two-way thing, that is the way I see it, but I think that the first thing is for us to say, yes we want a national carrier and this is the kind of national carrier we want. It is the kind of national carrier that we want, and we should clearly state the terms of that establishment, I think we need to do that. And when you make the terms clear and available with all the backing laws and regulations, then those who are coming to invest will look at it, and then when that look at it, they will say well we will come up to this point or we are not willing to invest beyond 30 per cent or 20 per cent. These are the terms, so it becomes a competitive thing. So the conditions are a two-way thing, the investors will come with their terms, Nigeria will have their terms but our terms must be attractive to investors for them to be able to come. But from what the President said recently that the priority of his government now is not the national carrier, don’t you think the Minister was running too fast? Let me tell you, this is the way I see it. When the President said it is not a priority for now, those who don’t want or those who don’t understand the whole idea of national carrier have tried to tell the President he has to make huge investment in establishing a national carrier and that there is no money. They told him that the little money that is available is what is required for other areas like agriculture, security, health and
If you go to Saudi Arabia, United Arab Emirates (UAE) they have conditions for those who are coming to invest and those who are coming to invest also have the perks of their investment and also attractive conditions to enable them invest
Aligbe
education. That is what people have said to the president. And from that perspective the president was absolutely right when he said it is not a priority from the point of allocating resources from the lean purse that we have. I also do not support the idea that the President or Nigerian government should invest huge sums in the formation of a national carrier, the government should not. The government should facilitate the establishment of a national carrier through what it has done to some other sectors, like making available an intervention fund available to the industry. It may not only be for the national carrier butt made available to the industry, that the industry will access through their banks and pay for it. It is not something that we go in there as government investment; government should not invest those funds. I have always said that the airline needs money to take off but it should be from the funds that will be at single digit interest rates and long-term repayment period. There are funds, if you know how much money we have in the pension funds, it is running into trillions, these are available funds that can be put into
investments that yield profit and it should come as a loan in single digit interest with long terms repayment. That is all that we need; it should not be taken from federation account. I don’t support that. So I think that is the President’s position but if it can come without government funding, it is a priority. Let me tell you why it is a priority for this country. Without a national carrier we are facing a lot of challenges. We are losing a lot in terms of money and in terms of creating jobs. Everyday you hear a Minister say Nigeria is importing $1 billion dollar worth of rice annually, that Nigeria has to cut that back. In each sector they are looking at how much Nigeria is losing by not revamping that sector. In the aviation sector we have to come to a point to identify what Nigeria is losing. The country is losing over $3 billion dollars annually in the airline sub sector. Are you not going to cut it down? If you are in charge of a sector where you are losing $1billion or $2 billion, what about the sector where you are losing over $3 billion, are you not going to cut it down? So that is the crux of the matter; it is not only all these arguments of whether we can
do or we cannot do. Look at what we are suffering at the hands of foreign airlines, the airlines are complaining, they can’t transfer their funds, they can’t do this and they can’t do that and Nigerians are beginning to suffer. They want to travel to the US, they are prepared to book you from here to London and then they want you to pay differently from London to US where they know they will collect forex from you. Our naira is no longer easily acceptable by the airlines for long distance travel particularly travels that goes beyond first destination point. Once you have two, three destination points they find a way of making you pay the other destination points in hard currency. We suffered this many years ago until we managed to resolve it but this time it has started again. The only way to address this is to have our own carriers that can at least wake up and challenge the excesses that we are beginning to experience. The airlines have their own arguments. If you look at it, yes you cannot make all the money and you can’t transfer it but they should recognise that we are facing economic CONTINUED ON PAGE 24
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