The Senate Monday commenced investigation into the utilization of N500 billion allegedly released by the Federal Government as bailout for the Aviation and Power sectors.
The Central Bank of Nigeria (CBN) however said that only N120 billion was released to the ailing airlines designated through the banks.
Chairman, Senate Committee on Aviation, Senator Hope Uzodinma, who chaired the investigative hearing, said the mandate of the Joint committee on Aviation and Anti-Corruption is to probe disbursement and utilization of $40million AFRIX loan and N86.6billion alleged to have been released by the Federal Government in 2011 for the rehabilitation and development of infrastructure in the Aviation industry.
Minister of Transportation, Chibuike Amaechi, who was first to address the hearing said that his ministry “does not know anything about $40million neither do we know about any N86.6 billion.”
Amaechi also said that his ministry does not know how the funds were generated and disbursed.
Minister of State for Aviation, Hadi Sirika, on his own, noted that it was obvious that the funds were wrongly used and probably diverted by the beneficiaries.
The minister added that “this is something that went terribly wrong in the past.”
“What is unbelievable as discovered by the committee is that these monies were transferred out of the country; the monies were transferred into private accounts, transferred into foreign banks and used to buy private houses,” the minister said.
A director in the CBN, Mr. Mudashiru Olaitan said that the apex bank’s intervention in the Aviation and Power sectors was to the tune of N500 billion.
The CBN director said that N300 billion was actually released and dedicated to power and the airlines as bail out.
The balance of N200 billion, he said, was for Small and Medium Enterprises (SMEs).
He said that the Bank of Industry was the managing agent while the tenure of the loan was between 10 to 15 years.
Olaitan said that the beneficiaries have been servicing the loan with only N81 billion is still outstanding.
Senator Uzodinma said that the Joint Committee was interested to know which instrument created the intervention fund, who approved the fund and who established the guidelines for disbursement.
He also said that the committee wanted to know whether at any time the CBN engaged the services of consultants; who shortlisted the 10 airlines that benefitted from the fund and whether there are funds to be recovered; if yes, whether it is from dead airlines or those still flying.
Olaitan said that the fund was created by the debenture issue of the Bank of Industry and approved by the Presidency.
He said that some banks provided security for the loan while the guidelines were established by the CBN including the tenure of 10 to 15 years.
He was silent on who shortlisted the benefiting airlines.
On whether assessment of the impact of the fund on airlines had been made, he noted that if the fund did not come when it did there would have been no airline flying in the country today.
He said that one or two of the airlines that benefitted from the funds were no longer flying.
On who applied for Air Nigeria which told the committee that it did not apply for any loan because it did not need it, he said that BoI processed the applications.
The BoI also confirmed that Air Nigeria duly applied for the loan.
A member of the committee, Senator Bala Ibn Na’Allah, said that they are interested in the list of the airlines that accessed the fund and are still in operation.
Na’Allah said that the committee was told that one of the beneficiaries of the fund transfer red $18million to a bank in Ghana while another N150 million was transferred to the account of one Olajumoke.
It was also revealed at the hearing that a particular airline received $6million to purchase Emergency Location Transmitter (ELT) that is sold $4,000.
The committee said that even after collecting $6million for the ELT, the airline still failed to buy the equipment.
Another member of the committee, Senator Shaaba Lafiagi, said that it appeared that some banks used the CBN to collect what the airlines were already owing them.
For instance, Air Nigeria was said to have owed United Bank for Africa (UBA) N35.5 billion which the bank allegedly collected when it acted for Air Nigeria to qualify for the bailout.
Senator Uzodinma noted that issues involved are grave and should be treated as such.
He noted that it is very disturbing development to learn of allegations that the monies meant to rescue the airlines were not properly utilized for the stated objectives.
He said, “The allegations are not just absurd but shocking. We are here to ascertain the veracity or otherwise of such allegations of misappropriation or diversion of the said funds. As is normally the case in any investigation we hold, nobody is guilty unless it is proven beyond all reasonable doubts that he or she is guilty.”
Senator Uzodinma noted that curiously, from the list of beneficiaries of the funds, some of the airlines have folded up.
He noted that available information indicated that Arik Airlines, Dana Airline,Aero Helicopters, Kabo Air, Caverton Helicopters, Overland Airways, Chanchangi Airline and Odenegene Air Shuttle benefitted from the funds.
He said that from the list, it is clear that some of the airlines have become moribund.
He said that some of the questions agitating their minds included how much did each airline get, did the management of the airlines deploy the fund for the purpose it was released, if the funds were judiciously applied why did some of the airlines that benefitted fold up, what was the criteria for choosing the airlines that benefitted, to what extent was the Ministry of Aviation of the Nigeria Civil Aviation Authority involved in the short-listing of the airlines that benefitted.
He also said that it should be asked who profiled the airlines that benefitted for qualification.
