Flights cancelled, passengers groan as fuel scarcity hits aviation

OduahIT was chaos and pain yesterday at virtually all the airports in the country as there were no aircraft to fly passengers following acute scarcity of aviation fuel, otherwise known as JET A1.

Many who had travelled outside their stations could not return.     Some airlines, which managed to operate, ended up having their passengers delayed for more than six hours. Many airlines cancelled their flights outright.

Meanwhile, citing possible security and economic risks to Nigeria, some stakeholders have urged caution in the current face-off between the Federal Airports Authority of Nigeria (FAAN) and its concessionaire, Maevis Limited, describing the crisis as a threat to Federal Government’s drive for direct foreign investments.

The scarcity and high price of the aviation fuel have been a source of concern to airlines and the Nigerian Civil Aviation Authority (NCAA), both challenges affect the bottom-line of indigenous airlines.

There were indications yesterday that some foreign airlines may head to Accra, Ghana to get aviation fuel to operate their aircraft if eventually they could not get the product in Nigeria. It was learnt that the commodity is even cheaper in Ghana where a litre sells for between N200 and N210, depending on where it was bought.

Many of the stranded passengers were seen carrying their luggage to return home or seek alternative means of getting to their destinations.

The chaos was more noticeable at the General Aviation Terminal (GAT) with passengers almost indulging in fisticuffs with airlines officials for informing them that their flights had been cancelled or delayed “for operational reason.”

The Assistant Secretary General of Airlines Operators of Nigeria (AON), Mohammed Tukur who condemned the situation said “this is the time airline operators should be wary of what is sold to them as aviation fuel.” According to him, this is the period kerosene could be sold to unsuspecting carriers in the name of aviation fuel.

An airline official who spoke to The Guardian on condition of anonymity said the situation was worse the previous day. He said his airline was able to make only two out of its many flights. Many flights were cancelled at airports across the country as airlines could not meet up with their scheduled flights as a result of the scarcity.

According to the airline official, the situation would likely continue unless something drastic was done to improve it.

There are indications that the crisis between FAAN and Maevis could lead to holistic appraisal of investments in the aviation industry.

Managing Director of the FAAN, George Uriesi had, at a press briefing last week to announce the termination of the contractual agreement with the firm, said the same fate could befall all other Public Private Partnership (PPP) investments in the sector. Maevis was said to have invested N9 billion in the project.

Among other concessions being feared could be hit by the same hammer are the over N35 billion investment by Bi-Courtney Aviation Services Limited, builders of the new domestic terminal christened MMA2.

The FAAN had a few years ago terminated the deal between it and Pan Express, the concessionaire with the responsibility of collecting port charges for the authority. Managing Director of Pan Express, Chief Peter Pan Okezie is reportedly frustrated with recouping his huge investment in the truncated project.

Some industry sources, who expressed concern over the matter, said the face-off with Maevis may ultimately scare investors away from the country.

According to them, it is unclear how the FAAN-Maevis crisis would affect PPPs in the future, particularly when efforts by the Infrastructure Concession and Regulatory Commission (ICRC) to intervene in the matter yielded no fruit. It was learnt that the commission had urged both parties to abide by the court order asking them to seek arbitration.

A source in the aviation industry, who pleaded anonymity, said the development was risky for Nigeria both economically and security wise. “What is happening is a knock to government’s drive for direct foreign investment, because potential investors are watching how FAAN is handling this issue. I don’t think people want to put their money in a country or industry where they would be thrown out before they can recoup their investment, let alone of making profit,” the source said.

Also, the Conference of Nigeria Political Parties (CNPP), through its Secretary General, Chief Willy Ezugwu has urged the Minister of Aviation and President Goodluck Jonathan not to allow the “impunity” shown in the case to endure.

Decrying the crisis, CNPP said: “The whole foreign trips to canvass foreign direct investment would amount to a huge joke if firms that legitimately entered into concession agreements are so treated. We are also worried about the security implication of having foreign firms collect and keep sensitive data on Nigerians with the active endorsement of an agency like FAAN. This just has to stop.

“This issue of self-help resorted to by FAAN is dangerous to Nigeria because it represents the crisis that the country today faces over MEND and Boko Haram.”

The Maevis-FAAN imbroglio has brought untold hardship to travellers who are being made to undergo a cumbersome manual screening at the airports for over a week now.

The FAAN had allegedly taken over forcefully the operations that the firm had been handling since 2007 under a concession agreement between both parties. The aviation agency has since then engaged another data service provider, Societe Internationale de Communication Aeronautic (SITA), a firm with South African ties. But there are worries about how long it would take SITA to synchronize its equipment with the existing system and how effective it would be.

A document made available to The Guardian showed that the concession agreement grants Maevis Limited power “for acquisition, installation, operation and management of an Integrated Airport Operation Management System (AOMS), Common User Self Service System (CUSS), Flight Information Display System (FIDS), airport pricing and billing system, a proactive revenue management system and an electronic payment gateway.” FAAN, while terminating the pact, alleged that “the fundamental terms of the agreement were not complied with by Maevis and the concession was poorly executed.”

Maevis however accused FAAN of disregarding series of court orders that had directed both parties “to go to arbitration as provided for by the article 15 of their agreement” and that the federal agency interrupted its operations at the airports in a manner that suggests resort to self-help.

According to stakeholders, the failure of FAAN to respect the directive of a Federal High Court in Lagos, presided over by Justice B.F.M. Nyako is also a sour point with some watchers of the situation saying the unfolding scenario would encourage Nigerians to seek self-help since court orders can be flouted anytime.

The judge first ordered the parties to go to arbitration in her ruling of December 17, 2010. Justice Nyako again “re-emphasised” her directive for both parties to go for arbitration on May 19, 2011.

Five days after the last directive, the Attorney-General and Minister of Justice, Mohammed Bello Adoke (SAN) wrote the Minister of Aviation to direct FAAN to “stay further action on the termination of the Maevis agreement pending the outcome of the intervention of the ICRC”. FAAN however contended, in a document justifying the eviction of Maevis, that “fundamentally, the continuing existence of the Maevis concession presented not just a serious threat to FAAN’s current and future cash flow, but to the viability of the authority as a going concern.”

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Flights cancelled, passengers groan as fuel scarcity hits aviation

OduahIT was chaos and pain yesterday at virtually all the airports in the country as there were no aircraft to fly passengers following acute scarcity of aviation fuel, otherwise known as JET A1.

Many who had travelled outside their stations could not return.     Some airlines, which managed to operate, ended up having their passengers delayed for more than six hours. Many airlines cancelled their flights outright.

Meanwhile, citing possible security and economic risks to Nigeria, some stakeholders have urged caution in the current face-off between the Federal Airports Authority of Nigeria (FAAN) and its concessionaire, Maevis Limited, describing the crisis as a threat to Federal Government’s drive for direct foreign investments.

The scarcity and high price of the aviation fuel have been a source of concern to airlines and the Nigerian Civil Aviation Authority (NCAA), both challenges affect the bottom-line of indigenous airlines.

There were indications yesterday that some foreign airlines may head to Accra, Ghana to get aviation fuel to operate their aircraft if eventually they could not get the product in Nigeria. It was learnt that the commodity is even cheaper in Ghana where a litre sells for between N200 and N210, depending on where it was bought.

Many of the stranded passengers were seen carrying their luggage to return home or seek alternative means of getting to their destinations.

The chaos was more noticeable at the General Aviation Terminal (GAT) with passengers almost indulging in fisticuffs with airlines officials for informing them that their flights had been cancelled or delayed “for operational reason.”

The Assistant Secretary General of Airlines Operators of Nigeria (AON), Mohammed Tukur who condemned the situation said “this is the time airline operators should be wary of what is sold to them as aviation fuel.” According to him, this is the period kerosene could be sold to unsuspecting carriers in the name of aviation fuel.

An airline official who spoke to The Guardian on condition of anonymity said the situation was worse the previous day. He said his airline was able to make only two out of its many flights. Many flights were cancelled at airports across the country as airlines could not meet up with their scheduled flights as a result of the scarcity.

According to the airline official, the situation would likely continue unless something drastic was done to improve it.

There are indications that the crisis between FAAN and Maevis could lead to holistic appraisal of investments in the aviation industry.

Managing Director of the FAAN, George Uriesi had, at a press briefing last week to announce the termination of the contractual agreement with the firm, said the same fate could befall all other Public Private Partnership (PPP) investments in the sector. Maevis was said to have invested N9 billion in the project.

Among other concessions being feared could be hit by the same hammer are the over N35 billion investment by Bi-Courtney Aviation Services Limited, builders of the new domestic terminal christened MMA2.

The FAAN had a few years ago terminated the deal between it and Pan Express, the concessionaire with the responsibility of collecting port charges for the authority. Managing Director of Pan Express, Chief Peter Pan Okezie is reportedly frustrated with recouping his huge investment in the truncated project.

Some industry sources, who expressed concern over the matter, said the face-off with Maevis may ultimately scare investors away from the country.

According to them, it is unclear how the FAAN-Maevis crisis would affect PPPs in the future, particularly when efforts by the Infrastructure Concession and Regulatory Commission (ICRC) to intervene in the matter yielded no fruit. It was learnt that the commission had urged both parties to abide by the court order asking them to seek arbitration.

A source in the aviation industry, who pleaded anonymity, said the development was risky for Nigeria both economically and security wise. “What is happening is a knock to government’s drive for direct foreign investment, because potential investors are watching how FAAN is handling this issue. I don’t think people want to put their money in a country or industry where they would be thrown out before they can recoup their investment, let alone of making profit,” the source said.

Also, the Conference of Nigeria Political Parties (CNPP), through its Secretary General, Chief Willy Ezugwu has urged the Minister of Aviation and President Goodluck Jonathan not to allow the “impunity” shown in the case to endure.

Decrying the crisis, CNPP said: “The whole foreign trips to canvass foreign direct investment would amount to a huge joke if firms that legitimately entered into concession agreements are so treated. We are also worried about the security implication of having foreign firms collect and keep sensitive data on Nigerians with the active endorsement of an agency like FAAN. This just has to stop.

“This issue of self-help resorted to by FAAN is dangerous to Nigeria because it represents the crisis that the country today faces over MEND and Boko Haram.”

The Maevis-FAAN imbroglio has brought untold hardship to travellers who are being made to undergo a cumbersome manual screening at the airports for over a week now.

The FAAN had allegedly taken over forcefully the operations that the firm had been handling since 2007 under a concession agreement between both parties. The aviation agency has since then engaged another data service provider, Societe Internationale de Communication Aeronautic (SITA), a firm with South African ties. But there are worries about how long it would take SITA to synchronize its equipment with the existing system and how effective it would be.

A document made available to The Guardian showed that the concession agreement grants Maevis Limited power “for acquisition, installation, operation and management of an Integrated Airport Operation Management System (AOMS), Common User Self Service System (CUSS), Flight Information Display System (FIDS), airport pricing and billing system, a proactive revenue management system and an electronic payment gateway.” FAAN, while terminating the pact, alleged that “the fundamental terms of the agreement were not complied with by Maevis and the concession was poorly executed.”

Maevis however accused FAAN of disregarding series of court orders that had directed both parties “to go to arbitration as provided for by the article 15 of their agreement” and that the federal agency interrupted its operations at the airports in a manner that suggests resort to self-help.

According to stakeholders, the failure of FAAN to respect the directive of a Federal High Court in Lagos, presided over by Justice B.F.M. Nyako is also a sour point with some watchers of the situation saying the unfolding scenario would encourage Nigerians to seek self-help since court orders can be flouted anytime.

The judge first ordered the parties to go to arbitration in her ruling of December 17, 2010. Justice Nyako again “re-emphasised” her directive for both parties to go for arbitration on May 19, 2011.

Five days after the last directive, the Attorney-General and Minister of Justice, Mohammed Bello Adoke (SAN) wrote the Minister of Aviation to direct FAAN to “stay further action on the termination of the Maevis agreement pending the outcome of the intervention of the ICRC”. FAAN however contended, in a document justifying the eviction of Maevis, that “fundamentally, the continuing existence of the Maevis concession presented not just a serious threat to FAAN’s current and future cash flow, but to the viability of the authority as a going concern.”

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