He comes to the job with a rich experience. George Uriesi, Managing Director of the Federal Airports Authority of Nigeria (FAAN) understands the aviation terrain well. For years, he managed the Cape Town International Airport in South Africa. He was also on the executive team of the South African Civil Aviation Authority (SACAA). Since his return home in 2010, he has been working at FAAN, first as Director of Airport Operations and now, the Managing Director. His 20-month tenure as managing director has been dogged by controversy. Why? Because of his refusal to play ball with those fleecing the country, he says. Uriesi spoke with Assistant Editor Joke Kujenya.
How do you react to allegations of financial recklessness in the ongoing remodelling activities of FAAN?
All I can say is that all of these allegations are recycled information. And the one you are asking me now is even one of the mild ones. There are some that alleged I was a drug pusher in South Africa and even claimed that I ran away to the United States of America (USA) when I was declared wanted. In fact, this particular one you came with is one of the very old ones. There are some that claimed that while in USA, I was an international gangster, leading a group. I just think that I am very much disliked by very powerful people. But I am not bothered about this. The fact is some of those behind this stuff seem to be very powerful people. There have been a lot of so-called concessions done in FAAN over the years before we came in. First of all, they know that they cannot tackle me when we talk professionally because they too know that I am quite solid as an airport manager internationally. They also know that I’m a multiple award-winning airport manager.
When I looked at the papers and saw all that were going on in the name of concessions and agreements, in fact, there was a particular one that I carefully read through all that were written on papers; I nearly fell off my seat. All I could gasp was ‘what is this for God’s sake?’ So, I told them all, this is not a concession. And in every instance, I went to the people concerned and said to them, ‘please, let us look at this together. Is this concession agreement against which you are doing this business?’ And I told them again ‘but you know that this can’t stand or work now.’ In fact, I said openly to some that ‘you know this is fraudulent.’ One of them actually told me ‘You know George, you just came back. You’ve been out of the country for many years. You don’t really know what is going on…’ Then he told me ‘Just focus on your own job because some of these things pass you…’ Then I told him, you know I am the managing director and I have a judicious responsibility to correct things that are not going on right. I also told some of them; let’s renegotiate some of these things in such a way that it would add value to FAAN. I’m not saying all of them should go away. And what they often end up saying is ‘My brother, I beg leave that side.’
The least they expected was that I would be able to say ‘no’, we are going to cancel these things because it’s daylight robbery. So, in a very short time, I built a crop of very solid enemies.
In specific terms, what do the controversies about the concessionaires entail?
I am glad you brought this up. My take on it after being FAAN MD for about 20 months, is that it seems Nigeria wants progress but does not like progress in the real sense of the word. We fail to appreciate the fact that in order to make progress, we must take lots of decisions that must be very unpopular with the powers-that-be. And I have found out that these so-called powerful people do not take these things lying low. They react in ways that are so vicious. So, it surprises me that these are people who travel all over the world and commend airports of the many countries they had been to, as looking quite great, abusing our own airports. They are the same people who now see that, at last, things are being done to remodel and upgrade our own airports, yet, all they could do is to attempt to thwart the efforts. They are the same people who were shouting where do they get the money that is being spent to upgrade airports from and all that? They keep saying we’re siphoning money and all that. But I have had a very different approach to this. Let me start with the domestic terminal, the General Aviation Terminal (GAT) that we rebuilt from the scratch. It costs N648 million. This is an amount of money that is less than what many Nigerians spend in building their personal houses. And the GAT is processing the same number of passengers that the Bi-Courtney Terminal that is supposed to have been built for N38 billion, is processing. This is because it was designed very efficiently, because we made very good use of the space we had.
You just said the GAT was remodelled for N648 million, and only Arik seems to be operating there. Why is this so and how would it generate the expected returns for the sector?
Yes, only Arik is operating there for now. And that is because the other airlines are at the Bi-Courtney terminals. Our intention was never to take the carriers of the airlines there. But Arik has never been able to operate there because it does not have the capacity to manage Arik. That is why Arik finds the GAT a suitable terminal to ferry its passengers from Lagos to anywhere they are going. However, other airlines have ticketing counters so you can buy your tickets at the GAT and go board your flight at the Bi-Courtney terminal. Nonetheless, it is rather difficult to say for now if other airlines might be able to move over to GAT. But if any comes to us and say they want to move over, I doubt if we have the right to deny them. Yet, it would all depend on if we have the capacity. At that stage, we may have to weigh the pros and cons and be sure that we do what is comfortable for everybody concerned.
FAAN says it is pursuing a radical automation programme intended to improve its revenue collection and block leakages, in practical terms, how is this objective being pursued?
It is very simple. And the way I would answer this question is, this is 2013, airports cannot be run without automation. And this is another area of anger that has provoked the petition writers and the powers-that-be. The introduction of automation is vastly changing the face of airport operations all over the world. Let me give you a couple of examples. If you have a shop in the airport and you have a concession agreement with us that says you will pay us a rent for the space you occupy. And it also states you will pay us a certain percentage of your gross earnings. Now, let us assume your gross earning is five per cent concession fee, which means, if you earn a hundred bucks, FAAN would take five per cent. But because we have no way of knowing how much you have actually been earning on your business apart from what you always tell us this is how much sales you made; so you just give us five per cent of your overall earnings. But with automation, each shop owner’s sales will be monitored through our system. So anything you sell, we know. And at the end of the day we would realise that those who have been underpaying us have actually been declaring lower than their actual turnovers. So, our five per cent of your one hundred naira would be weighing more than what you have been declaring. And so, you can’t just declare anything to us any longer.
Secondly, when you look at all the tickets at the gates of our airports, in which we print booklets and when you make your payments, they tear a ticket for you and you pass on to your destination. With all due respect to my staff, people always tell me, “Ha MD, the people have their own tickets and stuff like that”. I was even told that it is after they have used three of their own booklets that they would manage to tear one of FAAN’s. Well, automation will put an end to all that.
Automation means when you come there, you will pay, take the tickets and then, the gates will open before you can pass. It will register exactly how much you pay, how many cars passed, and we would know precisely what our revenue is for each month. The first month of automation in Abuja airport, has been very revealing. I am not accusing my staff of having short-changed the organisation. But I am saying that whatever leakages there were, have been blocked. We are now protecting the gates here. And that is why when you try to go through, you seem to see a lot of traffic because we are rebuilding it in such a way that it would change our revenue profile.
On electricity, FAAN pays for the power we consume at the airports. And everybody who sells at the airports uses same source of electricity supply paid for by FAAN for free. But in other airports across the world, the authorities recover the electricity charge. Sadly for us, there was no way to do this prior to recent times. So now, we are putting in pre-paid meters for every shop owner situated within our airports. So, power will only be supplied to your shop through the pre-paid meters. Now, FAAN has a bill of about N250 million monthly due to airport operations across the country. And we don’t recover anything. But now, I can bet you, we will start recovering between N150 million and N170 million of the overall N260 million. Each shop operator will now have to pay FAAN for the power that we pay to PHCN. And when you don’t pay for your electricity in your own shop, it means, power will not be supplied to you or your power runs out. So, all these measures will make a huge positive difference to the revenue generation of FAAN, which we would be able to re-invest into the airports in the country.
While these are just a few of the benefits of automation, it also became a big controversy. It got me so bothered that I had to retort why these people don’t want FAAN to automate. I have given you some basic examples of the huge difference it would make to the operations of FAAN, yet they don’t want it to happen. They just want to be left to be doing what they had been doing to our airports for the past 30years or so. These are just the basics of the automation which if allowed to work, there would be a huge change to the revenue income of FAAN and the aviation sector in the country.
Does it mean that if FAAN takes over the toll gates, it will run it better or what? And what happensto the operators?
Let me start by saying that, I have nothing but the highest respect for the young Nigerian entrepreneurs who had a five-year concession for these toll gates at our airports. They have the best concession in FAAN, I must admit. And why did I say that? They paid us every month unfailingly. This is because in their concession, FAAN was able to include a clause that say they have a rolling monthly bank guarantee. This means, if they did not pay, the bank would take the money and pay us. So for that reason, they woke up to the responsibility of managing that concession. We may have issues with the amount of money that FAAN signed up to get out of the toll gates proceeds every month. I don’t mind that provided they were paying the money, one; and two, I could see that they were working very hard to maximise the incomes from the toll gates. But now that we are automating, their concession ends in November this year. So, it is not that we are stopping them, but we will not renew it for the simple reason that automation has taking off. We cannot be cheated, so why should we be paying somebody else a concession when the revenue can accrue to us directly because it is automated. So, it is just that the model has changed. We don’t need them anymore. However, they did a great job for the period. They were one of the very rare concessions that were well-documented. For that reason, I wish there was another area I could partner with those serious-minded group of young Nigerian entrepreneurs.
They were not like many who were just out to fleece others and on a larger scale, the country. But they worked so hard at the toll gates to keep the concession going. But if we have other projects in FAAN and we need people that we know will do a good job and pay their dues at the time allotted, I will not hesitate to contact them.
How is FAAN pursuing the airport certification programme?
On airport certification, ours was the first in Africa to be certificated in Cape Town International Airport long ago. That was as far back as 2005. So, I am quite at home with the process of certification. And my attitude to it is that, I looked at our airports and I felt the certification that the country already had, our airports meet regulatory requirements. It’s got the right runways, taxiways, navigational and visual aids, and all the things that are needed to run. Certification just means that, you have an organisation that is able to keep the airports running at optimal. So, it will then be certified that this particular airport is a compliant airstrip. Now, we have all these things and we have the propensity to invest back into a recalcitrant attitude. And so, the organisation must change to become a proactive agency that is determined to keep the airport running properly before I would want it certified. That’s my attitude. So, I said we should first get the infrastructure right and that is why we are working on the organisation in an all-round manner. We trust that by the second half of the year, this July, we are going into the certification of the Lagos Airport. Our target is that by the end of the year, that is in December, we would achieve the first proper certification of the Murtala Mohammed Airport (MMA), Ikeja, Lagos, and then, we would move on to Abuja. By 2014, we would get the Port Harcourt Airport and the rest of them fully ready for certification.
Well, it is on record that FAAN generates so much revenue, however, what is the level of support the agency gets from the Federal Government and in what ways would all these translate to the economic benefit of all Nigerians?
Seriously, the airports are a huge revenue trigger. When airports are well managed, they contribute hugely to the economic base of the country and the surrounding communities in terms of employment, businesses, entrepreneurship and the indirect impact because a booming airport has a lot that gives an indirect effect. Now, we are going into the aerotropolis, which is a deliberate development of the cities around the airports. And this would then generate huge employments from the massive economic activities that would impact on the residents of the surrounding areas. If we don’t do this, then, everything is a waste. So, we are trying to make sure that we allow our airports to interpose in that aspect.
Can you expatiate on the aeronautical revenues?
Nigerian airports have been dependent on the aeronautical revenues from time. Whereas, the world over, dependency on aeronautical proceeds is almost suicidal for an airport. This is revenue that comes from landing and parking of aeroplanes as well as passengers service charge. Non-aeronautical incomes are the shops, businesses around the airports, and the commerce they generate. An airport must be able to rely on both independent sources. When Dana crashed last year, fortunately, there was this significant reduction in aeronautical activity because the airline was out. Shortly after, Air Nigeria went down, also for a while, Aero Contractors was suspended, and it was almost only Arik that was flying at a time. Our revenue grossly nosedived. And at the same time, we had closed all our commercials because we were doing renovations and all the airports seemed grounded. So, we suffered severely for the late part of last year. If we had the booming non-aeronautical revenue already going on, the impact of that plunge would have been significantly reduced. So, we need both. So, there is much more non-aeronautical activities such as restaurants, shops and all sorts of things and therefore more revenue to the airports. So in Akure, Ibadan, Ilorin, you will see a quadrupling. There will be a vast increase in the revenue generation unlike the previous offering. Already, in MMA, it is not quadrupling, it is about quintuple of the prior commercial offering.
A few weeks back, an aircraft was sighted in an unusual place around Igando, it was later discovered to be a disused plane. What is FAAN’s plan towards removing such craft from our airports and what would be the cost implication in terms of removal and sales?
FAAN didn’t generate anything, and we didn’t spend. It’s neutral for us. What we did is, in order to get rid of the aeroplanes, we get people that can come and dismantle and take them away. Then, they can make what they want out of it. This issue of disused planes have been unnecessarily over-exaggerated. There is really little of aeroplane parts that can be recycled. Lot of aeroplane parts are the seats and the inside generally. The major part that can be used is a part of the skin, and that is even very minimal. In every aeroplane, there is so much work to do in order to just extract a little skin. And that is why we said to people that can do it to come and take them away. For two years that we advertised, barely did anyone show up voluntarily until we finally got somebody who expressed his preparedness to take it up. So, he came around and carried away the scrap. Now, the one towed and seen at Igando, it was somebody that came and said he would like to use the aeroplane as educational specimen for children in a particular location. He’s one of these captains. So, they cut the wings in order to be able to tow it on the road, which is very normal. It happens in every country in the world. But in Nigeria, a crowd gathered, claiming that an aeroplane crashed.
Now, for the billions of naira being owed FAAN by foreign and domestic airlines, what is the agency’s recovery strategy?
We are being owed a lot of money, I must be factual. For now, we are going through a legal process where we have assigned legal debt recovery agents for the first time, to go about recovering the debts owed FAAN. That for us is the only avenue through which our debts can be retrieved. It’s difficult to tell you the exact amount because for the first time, we are going to ask the Federal Government to allow us to cancel and write off some debts that are considered unreasonable in our balance sheet. Such debts are, like those of Okada Air, Haco Air and most of the airlines that are no longer functional. But we are still carrying them on the balance sheet. We want to delineate between what is visible and recoverable because by now, we should know the ones that can never be repaid. So then, let them go. I assure that we are working on that in line with due process. But the good thing about that of the foreign airlines is that they are the ones that keep us going because they pay their bills. They all owe but our international airline owners pay us regularly. The problem for us is when they owe and do not pay and the thing keeps accumulating over the years. But we need the domestic airlines to service their debts more.
