The federal government has directed the Federal Airports Authority of Nigeria (FAAN) to remit to the Accident Investigation Bureau (AIB) 5 percent of revenue accruing from passenger service charge (PSC).
The pronouncement has been a subject of controversy, pitting pressure groups in the aviation sector against the Minister of State for Aviation, Hadi Sirika.
The commissioner of the AIB, Akin Olateru, said the agency needed to complete some projects and build human capacity, hence its request to Mr. Sirika for 10 percent from the PSC.
The minister, however, approved 5 per cent, which the National Union of Air Transport Employees (NUATE), Association of Nigerian Aviation Professionals (ANAP) and the Nigeria Union of Pensioners (NUP), FAAN branch, have opposed, saying the minister had usurped the power of the National Assembly.
With an average of 15 million passengers that pass through Nigeria’s 22 airports yearly, the AIB is set to rake in roughly N4.2 billion from the 5 percent PSC, in addition to the yearly federal allocation of N2 billion and the monthly 3 percent of the revenue accruing from ticket sales charge which it (AIB) receives from the Nigerian Civil Aviation Authority (NCAA).
Our correspondent gathered that the FAAN collects N1000 from each domestic traveler while it charges $50 (N18,250 at the exchange rate of N365 to a dollar) each from international passengers as PSC.
It was found that in 2015, FAAN generated N87.6 billion from PSC alone.
In 2016, about 15,233,597 passengers passed through the nation’s airports, 11 million of whom were domestic travelers, while another 4.2 million were international travelers.
NUATE General Secretary Mr. Olayinka Abioye said it was not the business of the minister to unilaterally grant the AIB’s request without going through the National Assembly.
Mr. Abioye challenged AIB to justify the 3 percent it has been collecting as TSC from air travelers through the NCAA over the years.
“We, the unions, do not think it is the right thing to have been done by the minister because allocations to parastatals are not within the purview of the minister. It should be part of the responsibilities of the National Assembly,” Mr. Abioye explained.
“Also, has AIB justified the 3 percent it has been collecting? We have to know whatever they have been doing with that money. Why will the FAAN be the one to suffer the failure of AIB in devising positive non-aeronautical means of generating internal revenue?”
In a statement jointly signed by the secretary generals of the ANAP and the NUP, Messrs. Abdul Rasaq Saidu and Emeka Njoku, respectively, the unions said they had no grudges against the AIB’s request for more funds, but “we see the approval and directive of 5 percent PSC to AIB as an abuse of office by the minister of state for aviation.
“Government-owned companies and agencies were established through enabling acts, stating how funds or revenue could be provided. It is therefore dangerous to now try to unlawfully rob FAAN to pay AIB when both were established by law stipulating their sources of funding.
“Yearly budgets are prepared and defended by both FAAN and AIB based on individual’s internally generated revenue. For the minister to direct FAAN to be remitting 5 percent from monthly PSC without due process amounts to illegality.
“We are aware that the United Nations Charter on Aircraft Accident Investigation does not allow the AIB to charge for services rendered and this is the reason why 3 percent of total revenue derived from TSC in addition to their yearly budgetary federal government allocation are the sources for funding AIB,” said the unions.
Having critically looked at the AIB’s reasons for requesting for more funds, the unions said such a demand might be feasible, but not from the overburdened FAAN.
“With the numerous operational and financial needs of FAAN, knowing full well that the federal government does not fund FAAN unless capital projects approved by the federal executive council, the minister’s 5 percent approval and directive that FAAN should be paying it to AIB is to us an attempt to cripple FAAN.
“Senator Sirika knew very well that FAAN is being owed huge sums of revenue by airlines and concessionaires. This should have been his concern to ensure that FAAN’s debtors pay for the services they enjoy,” the unions stated.
Mr. Olateru, however, wondered why anyone would lament the approval, saying the agency’s inability to publish over 35 air accident investigation reports and train its staff was due to a lack of funds.
“Anybody that says it is not fair for us to get a part of the PSC is unfair. Who owns the two agencies? It is the federal government. We all share the ticket sales charge (TSC). FAAN doesn’t share its PSC with anybody and the government in its wisdom says ‘FAAN, please give AIB 5 percent.’ I don’t think that is too much. It is within the power of the minister to do that.
“But one thing that is critical to us is that we have to work on the internally generated revenue. We need to build our capacities in accident investigation. There are certain things we need to improve upon; there are processes that we need to review, there is public sensitization that we need to do.
“All these things cause money and this is what we have managed to put into the IGR side for 2017.
We expect some reasonable money from the PSC to support us to deliver on some of our mandates.
We still have to sit with FAAN to see how much this money is and what the 5 percent will translate into,” he said.
He further said no other agency in the aviation sector except the FAAN earns the PSC 100 percent, adding that the same agency still collects charges for adverts, parking and landing of aircraft, land and tolls on vehicles coming in and exiting the airports across the country.
With regard to the power of the minister to approve the additional fund, Mr. Olateru disagreed with the unions, arguing that the National Assembly has the power to vary the distribution of TSC and not PSC.
The commissioner said the AIB “only gets a meager 3 percent of the revenue from the 5 percent ticket sales charge and the cargo sales charge (TSC/CSC) collected on behalf of the parastatals by the NCAA while the other agencies get more.”
Quoting the Civil Aviation Act 2006, Mr. Olateru said the NCAA gets 58 percent from the TSC/CSC, the Nigerian Airspace Management Agency (NAMA), 23 percent; Nigerian College of Aviation Technology (NCAT), 7 percent and the Nigerian Meteorological Agency (NIMET), 9 percent of the total sum.
He said all the revenue is supposed to be shared by all the five agencies in the aviation ministry, adding that the executive arm of government has no power to alter the allocation.
“If anybody is not happy, he needs to go back to the National Assembly. That is the position since 2006 till date,” he added.
Mr. Olateru further said the PSC was an executive fiat and had nothing to do with the Nigerian Civil Aviation Act.
“As it is today, every domestic operator pays N1000 to FAAN. On the international side, it is $50. It is only FAAN among the six agencies of aviation that earns and spends that money. This is PSC and not TSC. The same minister, in his wisdom, now approves for FAAN to be paying AIB five percent of the PSC. By implication, AIB earns five percent of the PSC.
“AIB is the only agency among the six government parastatals under aviation that does not charge for her services. Even though NCAA takes 58 percent of the TSC, they still charge for all the services they render to the airlines and to the public. NCAA calls theirs cost recovery. NAMA, NCAT, NIMET, they all charge for all their services despite their earnings from the TSC,” he added.