The Nation Newspaper

Tag: tariff

  • ‘We did not compel govt to impose tariff on imported books’

    The Managing Director, Academy Press Plc, Mr Gbenga Ladipo, has said the firm has not compelled the Federal Government to impose tariff on imported books as being erroneously peddled around  by some publishing industry.

    Speaking at the Customer’s Forum, held at  the company’s premises, Ilupeju Lagos, Ladipo said, both the printers and the publishers are discussing with the government on way forwards.

    “I want to use this opportunity to assure our publishers that Academy Press as a printer did not compel the government to impose tariff on imported books as being erroneously believed by some sections of the publishing industry. What the publishers have asked for is the elimination of tariffs on imported materials so we can be at par with the zero duty status of imported books to allow for level playing and competitive field for the local printers as enjoyed by their foreign counterparts. The two sectors have come together and we are discussing with the government on this premises,” he said.

    He said the major problem facing the industry is getting the raw materials, adding that the firm is seriously concerned about challenges and difficulties that are facing the industry.

    His  words: “For us at Academy Press, we are concerned about the challenges and difficulties that are being experienced by partners and print buyers alike in the industry which are creating economic, financial and social instability for us and tend to threaten the survival of the business of members of this country.

    “The most problematic of our inputs are raw materials. All the material ingredients that we require to operate has for ever been faced with one challenge or the other.

    ‘’Key material such as paper completely depends  on importation. So is ink, plates, chemicals, spare and so on. In the era of huge naira devaluation, this has become big challenge on our cost of production and invariably the cost of our customers”.

    Ladipo said the problem of equipment and maintenance is also similar to this since it is equally import dependent, adding that skilled labour , especially technical, managerial are also challenging to the industry.

  • Group protests high electricity tariff

    Business owners under the aegis of Cooperative Business Society of Abuja (CBSA) have protested the astronomical hike in electricity tariff in the Federal Capital Territory, FCT.

    The grouped, which described the actions of Abuja Electricity Distribution Company, (AEDC) as inimical to economic and business growth in Nigeria, said the hike was a flagrant disregard of the Multi-Year Tariffs Order as contained in the  National Electricity Regulatory Commission ( NERC) guideline, and a set back to business growth, especially with world economy facing turbulent time and coming a few days to the general election

    Recently, the AEDC jacked up the Abuja electricity tariffs for businesses from N22.08 to N35.03 per kilowatts for commercial power consumers in the FCT, an increment of about 58 per cent.

    The group in their objection letter and petition signed by 25 heads and managers of business entities that formed the cooperative group, stated: “We the undersigned business society group in Abuja hereby objects to the sudden increase by 58.55 per cent in electricity kilowatt from N22.08 to N35.03for commercial power consumers in the FCT.  According to the multi-year tariff order for the NERC, the maximum electricity increase for 2015 is five per cent.

    “We are shaken by this blatant disregard to the commission’s guideline and total lack of interest in the business operating in the capital city. Many businesses have collapsed under the ever increasing weight of cost of operation and harsh economic environment.’’

  • SAHCOL urges zero tariff on equipment importation

    SAHCOL urges zero tariff on equipment importation

    The Managing Director of Skyway Aviation Handling  Company Limited,  Alhaji  Olu Owolabi has urged the Federal Government to grant zero tariff on importation  of ground handling equipment.

    He said the zero tariff has become imperative because of the high cost of acquiring heavy duty equipment used for group handling.

    Owolabi said since government granted zero tariff on aircraft spare parts about two years ago,  ground handling companies have not benefitted.

    He said same should apply to the heavy duty machines used by handling companies in order to ensure rapid growth in the aviation sector.

    He said: “Government meant well for the industry when it said it was embarking on the upgrade of airports. It should be supportive when handling companies are buying airlines’ needs.”

    The SAHCOL boss decried double taxation by the airport authority and expressed the hope that the committee set up by the aviation minister will address the  trend.

    He lamented that what thev firm got from airlines are not commensurate with services rendered by the handling companies.

    While saying SAHCOL would have been listed at the stock exchange, Mr. Owolabi regretted that the outbreak of Ebola Virus Disease stalled its movement into two West African countries adding that negotiations were on top gear with some countries in the sub-region before the Ebola outbreak.

    With the best equipment in ground handling in the country, Mr Owolabi said the company was not where it ought to be adding that the more the company expands, the more it needs to acquire equipment.

  • Will book tariff work?

    Will book tariff work?

    The Federal Government has introduced 50 per cent tariff on printed materials to, in its words, “encourage local production”. But in the face of the dwindling naira value and lack of capacity for local production, stakeholders argue, imported books will be priced beyond buyers’ reach. This, they say, may spell doom for education, reports KOFOWOROLA BELO-OSAGIE.

    The Federal Government’s introduction of 50 per cent tariff on printed materials jolted the industry.

    Since the Ministry of Finance’s announcement, publishers, booksellers and others have been jittery.

    The tarrif is broken down into 20 per cent duty and 30 per cent levy on books.

    But, to stakeholders the move will be counter-productive, driving the prices of books beyond buyer’s reach and stifling the local industry.

    Last month, the Coordinating Minister for the Economy, Mrs Ngozi Okonjo-Iweala, said discussions were on with the Nigeria Publishers Association (NPA) and the Manufacturers Association of Nigeria (MAN) to resolve the issue.  “Pending the resolution of the issues, several options to address genuine concerns are being explored,” she noted, on the social media.

    While seeking ways to resolve the problems, stakeholders identified many factors that would make the policy impracticable. They also suggested what the Federal Government must do to make the local publishing industry vibrant.

     

    Likely scenario after introduction of tariff

    If the 50 per cent tariff is introduced, Ogbeni Lanre Adesuyi, Managing Director of Havilah Procurement  and Library Services Ltd (a leading company in books and publishing), said prices of books would rise by about 50 per cent, which would further reduce the number of books bought for libraries and read by Nigerians, especially at the tertiary level, and encourage piracy and smuggling.  He said the devaluation of the naira further compounds the problem as the cost of purchasing the books from source would automatically rise as well.

    “It is going to affect the entire populace because the prices of books will go up by 50 per cent.  Secondly, don’t forget that naira has already fallen against the dollar.  That is another added cost.  It will affect prices of books by up to 30-40 per cent.  It means people won’t afford books.  There will be piracy, which means authors will not reap the benefit of intellectual property; and government would lose revenue because pirates do not pay tax,” he said.

    Chairman of Safari Books Ltd Chief Joop Bekhout foresees misfortune for the Nigerian education sector if the policy should scale through.

    He said: “It means that libraries will be without books because nobody can afford them.  It is even against UNESCO Convention which Nigeria is a signatory.  Under the agreement, you cannot task educational materials.  The ECOWAS agreement was just passed two days ago.  Theirs is zero.  But Nigeria said no – that it is 50 per cent.  It takes effect from the 1st of January.  So, instead of making progress, we will go down.  Everybody must appeal to the government to cancel it.  Whose idea it is, we don’t know.  It is a very bad situation.  It means the people who implement it, they don’t care about our country; they don’t care about education.”

    Otunba Olayinka Lawal-Solarin, Chairman of Literamed Publications, publishers of Lantern Books, noted that books may be scares because local industry lack the the capacity to meet the demands of the Nigerian populace for books.

    “Yes, we should produce locally, but have we got the capacity?  How many books can printers in Nigeria print?  The number of books we need in Nigeria today is huge – for basic and secondary education, not to talk of tertiary,” he said.

     

    Why book imports are huge

    Apart from lacking the local capacity to produce books needed in Nigeria, Otunba Lawal-Solarin says some categories of books are not published locally.  He said most local publishers concentrate on publishing books for the basic and secondary education, while tertiary books are imported.  He largely attributed the importation of most tertiary books to the fact that there are few authors of tertiary books in Nigeria.  Since the authors are mostly foreign, he said Nigerian publishers need to purchase rights before they can publish such books, which may not be readily released.

    “Do printers in Nigeria print tertiary books?  Most of the tertiary books in Nigeria come from India, Europe and America.  They are mostly authored by foreign writers.  Unless publishers buy the rights, they cannot print the books else it would amount to piracy.  The authors must also be willing to sell the rights to Nigerian publishers,” he said.

    For Adesuyi, those in the manufacturing industry supporting the tariff policy are doing so with the hope of winning huge government contracts for publication of basic and secondary books without considering that they lack the capacity for tertiary books.

    “What they are targeting are the big government contracts because our printers don’t have the capacity to produce locally in large quantity.  Nigerian printers don’t produce tertiary books.  They (tertiary books) are not usually produced in large quantity (even by foreign publishers).  Publishers even print them only on demand,” he said.

    Bekhout added that publishing tertiary books in Nigeria is currently a disincentive because of the low patronage.  This may not be unconnected to the cost.  Some tertiary books sell N3,000- N5,000 or more, which many tertiary students cannot afford.

    “If you have an academic book that you only sell 500 copies in a year, you can’t produce it locally; it doesn’t make any sense,” Bekhout said.

     

    Cheaper to produce abroad

    With the country’s paper mills moribund and the paralyzing effect of epileptic power supply, the local publishing industry cannot compete with foreign book imports in terms of cost. Publishers say it is cheaper to print good quality books abroad than locally.

    “Printing is cheaper abroad,” said Lawal-Solarin, “which is not good for us local publishers.”  Without paper and power, it would always be so. “We don’t have paper.  All the paper mills are moribund.  We should go back to the basics and provide paper.”

    Adesuyi said many publishers in Nigeria print abroad where power is available, labour is cheaper and quality is assured.

    “It is cheaper to produce abroad because there is no power in Nigeria.  When there is no power, what does one fall back on, diesel.  How much does it cost?  The publisher has to provide his own power.  Again, he has to provide skilled labour.  Labour is expensive here compared to Dubai, China and India where it is cheap,” he said.

    As far as Behkout is concerned, the only local resource used in book production in Nigeria is labour.  With other components being imported, he said it is unrealistic to end importation of books.

    He said: “You know that in this country, we do not make any paper.  Every sheet of paper is imported.  Local production of books is only manpower.  Even electricity is provided by generators.  There is no local component of bookmaking in this country.  Raw material and every other component of local production are imported.”

     

    Book trade is international

    Stifling book imports poses the danger of limiting the knowledge of Nigerians, warns Bekhout, who noted that the book trade is in the purview of international because knowledge is universal.

    “We do local production.  But there are limits to local production.  And knowledge is not local; knowledge is universal; it is international.  Why do we call it university, because should be universal.  If you are in London, my son is a professor in london, there are over 46,000 students and staff from different nationalities in the country.  Education is a global idea; education is international,” he said.

     

    Way forward

    While publishers say the 50 per cent tariff on book import is harsh, they however said they were not against local production.  They recommended that the Federal Government should enhance capacity of local players before introducing other measures.

    Lawal-Solarin called for the resuscitation of paper mills in the country.  He also advocated a phase tariff plan on areas of strengths of the local industry.

    “We should do this gradually.  The Federal Government should revive the paper mills.  Printers in Nigeria must get paper.  Again, instead of a blanket levy on all book imports, the government could decide that the levy be on books in the basic education sector, where publishers are thriving but leave out tertiary books,” he said.

     

  • NACCIMA faults ECOWAS common external tariff

    NACCIMA faults ECOWAS common external tariff

    The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has raised the alarm over the proposed Economic Community of West African States (ECOWAS) Common External Tariff (CET).

    President, NACCIMA, Alhaji Badaru Mohammed, Mohammed spoke to The Nation on the sideline of the Review of the state of the Nation in Lagos.

    The NACCIMA chief, who was represented by the First Deputy National President, Chief Bassey Edem, said there is a gap between the savings and lending rate.

    He said the chamber is concerned  that the nation’s borders will be thrown open to goods from within the West African sub-region from next month when it will be operational.

    He said it would pose a huge challenge for the nation’s growing industries that are battling with the devaluation of the Naira, among other challenges.

    He cautioned on the need to ensure compliance to all protocols signed by ECOWAS to eliminate dumping of goods in the country to protect the growing industries to realise the nation’s proposed Industrial Revolution Plan.

    He said: “The cost of funds currently hovers between 22-35 per cent depending on the profile of the firms, which is too high for any productive venture and has significant implication on the global competitiveness of Nigerian firms and their products.”

    On the power sector, he advised the government to work with the Generating and Distribution Companies (GENCOS and DISCOS) to achieve the desired energy requirement of the country in view of the critical role the sector plays in the development of the national economy.

    In his words: “It is imperative that all stakeholders in the power sector should collaborate to improve on the current output, which hovers between 3,200 Megawatts Mw and 3,500 Mw. We also want to counsel government to demonstrate the political will needed to drive the alternative sources of power so as to significantly improve on the power supply in the country.”

  • Glo cuts tariff on international calls by 50%

    On a move aimed at drastically reducing the cost of international calls, national telecoms carrier, Globacom, has cut tariffs for calls to popular international destinations by 50 per cent.

    Globacom said its new International Direct Dialing (IDD) promotion which allows its subscribers to enjoy a 50 percent discount is applicable to calls made to all lines in the United States, Canada, India and China as well as calls to fixed lines in the United Kingdom.

    The company’s Head of Glo Gateway, Mr. Steve Stretch who made this known in a press statement  in Lagos, explained that 50 percent discount is available on the  IDD pack which attracts a rental charge of N500 for N500 bundled airtime for 30 days’ validity period.  Instead of the 20 kobo base rate, the subscriber is charged only 10 kobo per second. Customers are to dial *170*25# to enjoy this amazing offer.

    He urged Globacom subscribers to take advantage of the IDD Promotion to connect and talk at a cost-effective rate with their friends and relations in the countries covered by the promo during this festive season.

    The IDD promo complements the Glo Unlimited Roaming promo which allows Glo subscribers who travel outside the country to receive calls on their lines free for 15 days.

    Roaming subscribers will also enjoy up to 60 minutes of outgoing calls at a competitive rate of N100 per minute. The offer includes 15 free SMS and ability to browse the internet at 15 kobo per kilobyte.

    Stretch said the offer comes with a subscription fee of N2,500 for a validity period of 15 days.

    He explained that the roaming plan is currently available in 27 countries including the United States, United Kingdom, Italy, Netherland, South Africa, Norway, Sweden, India, Spain, Switzerland, Canada, Brazil and Cameroon, adding that “there are plans to extend it to more destinations.”

    It will be recalled that the telecoms company, last week, launched Glo Overload and Glo Allawee promos to empower its customers to enjoy pleasurable experiences on the network.  While Glo Overload enables its subscribers across Nigeria to instantly get 200 percent bonus airtime every time they recharge with N200 or more after dialing *200# to opt in, 200 per cent  bonus data on purchase of data plans of N2,000 or more and an opportunity to be 100 times richer every time they recharge with N200 or more, Glo Allawee gives new subscribers a whopping N18,000 naira worth of free airtime.

     

  • Publishers kick against proposed 30% tariff on imported books

    The Nigerian Publishers Association (NPA) has urged the government not to impose duty on imported books.

    The group made this appeal,  at its yearly conference and general meeting in Ibadan, the Oyo State capital.

    President of the association, Chief Ngwobia Okereke, urged the government not to go on with the introduction of the new tariff regime of 30 per cent levy.

    He said books are supposed to be without any import duties and warned that if government goes ahead, the move would hamper the development of the education sector.

    Similarly, Chairman, Safari Book Limited, Chief Joop Berkhout, who chaired the occasion, lamented that publishers were producing under stifling condition already without the duty which would worsen the situation.

    “The world is changing fast and we have to catch up with innovations. I understand that various meeting had been held with the Federal Ministry of Finance, Federal Ministry of Education and the National Universities Commission (NUC) to revert duty to zero in a country where there are no paper mills; where everything to produce books are imported; even electricity, only the labour force is local. We still use printing machines that are obsolete in other countries apart from restricted capacity.

    Every country must have the right to manufacture whatever they want for economic and quality reasons,” he said.

    Speaking on the theme: “Nigeria book industry: National development and government policies,” the NPA President, Okereke, said the association chose it to review the growth of the publishing industry and the society at large based on various government policies.

    Lamenting frequent changes in education policies from successive administrations, he called on the government to ensure continuity to improve education standards.

    Supporting Okereke’s call for continuity, Chairman, University Press Plc, Dr Lekan Are,  said there must be a synergy between the industry and the Federal Ministry of Education.

    “Government policies are not stabilised.  The Nigerian Publishers Association has come of age hence the government and the stakeholders must work together to move the nation forward,” he said.

    In his address, NUC’s Executive Secretary, Prof. Julius Okojie,  said the book industry had contributed immensely to the development of the society.

    Represented by Prof Akanerem Essien, Okojie suggested that the research committee of the NPA should set in motion the analysis of the potential of e-book industry in the country.

    “It is better to start now to think about it while building on your platform. For a long time to come the print book will be of great relevance in our economy,” he said.

  • NERC: Tariff hiking commission?

    •Consumers are in for dark times ahead as another tariff hike takes effect this month

    Electricity consumers in Nigeria must have concluded that the Nigerian Electricity Regulatory Commission (NERC) is set up for the sole purpose of increasing electricity tariff and inflicting pain on the consumer. And on the face of it, NERC does not seem to do anything else nor is it remembered for carrying out any regulatory functions since its inception about seven years ago.

    NERC’s announcement last week of another tariff hike this month must have left the long-suffering Nigerian electricity consumer in deep angst. This is probably the third this year in a power environment that is rancid with graft, mindless opportunism, inadequate supply and shoddy service. The consumer is paying too much as it is and cannot see any justification for paying more.

    But NERC cites a $1 increase in the price of gas to power plants as the major driver of this review. Other factors warranting this current tariff review include inflation, foreign exchange rate and power generation capacity. Speaking during the meeting with industry stakeholders on the bi-annual minor review of the Multi-Year Tariff Order – 2 (MYTO), NERC vice chairman, Mr. Mohammed Bello rued the incongruence of a necessary upward review of tariff though power situation had yet to improve.

    Bello noted: “From what I have seen in the initial report, not much has changed. The tariff review is a sensitive issue to the consumer who considers paying higher and not seeing improvement in electricity supply. But there is a general consensus that this is the way to go. By paying what is due this is how the power will begin to improve.”

    Obviously the consumer is not part of this consensus and the new hike is bound to make him inconsolable, as he seems to have borne the brunt of what may be described as endless shenanigans in Nigeria’s power sector.

    One year after the Federal Government divested substantially and privatized its interest in the power sector, situations have regressed in all the value chains of generation, transmission and distribution. While both the generation and distribution arms have been divested to private investors, transmission remains with the government under a lease management arrangement. Though this fundamental restructuring of the system was meant to engender market competitiveness and efficiency, the reverse has been the case.

    Power generation target was set at 6000 mega watts (mw) at the beginning of the year. By August it was scaled down to 5000mw and now, as the year ends in a few days, even that will not be met. Only 3,750mw is being generated currently and NERC will base its retail tariff for the next six months effective December 1, 2014 on this quantum of generation. But the peak demand for power in the country now is estimated at 12,800mw.

    Ironically, Transmission Company of Nigeria, (TCN) the firm solely responsible for this leg of the chain still does not have capacity to transmit even this meager 3,750mw. It is said that about 80mw of currently generated power still gets ‘stranded’ for lack of transmission capacity.

    Distribution is another sordid tale of lack of commitment by the new owners to make fresh investment; refusal to upgrade to pre-paid meters and endless agitation for tariff increase.

    The result is that so far, the privatization of Nigeria’s power sector has been a debacle with the consumer caught in a most insouciant matrix of the Federal Government and its cronies.

    It is most unconscionable that government seems to be playing games with what is probably the most important infrastructure for growth and development. Since the era of former President Olusegun Obasanjo, it seems that the more funds sunk into the quest for electricity, the more it seems to require. Recently, N213 billion cheap fund was approved for these privatized firms by the government. Why would government throw taxpayers’ money to investors who have not shown any cause that they need such aid?

    We aver that government should retrace its steps and approach its power reform programme with a modicum of transparency and accountability.   Lest, we are in for a long night — and there is a limit to the extortion the people can bear.

  • NERC ties new electricity tariff to meter availability

    NERC ties new electricity tariff to meter availability

    The Chairman, Nigeria Electricity Regulatory Commission (NERC), Dr. Sam Amadi, has said the implementation of the new electricity tariff expected to begin on December 1, may depend on the provision of meters to consumers.

    He said interim metering policy introduced by NERC named Credit Advance Payment for Metering Implementation (CAPMI) did not yield the expected result because the electricity distribution companies (DISCos) kicked against it.

    Amadi, who spoke to reporters in Abuja, said the distribution companies (DISCOs) complained about the policy, saying that their personnel cost increased following the payment of 50 per cent severance package to labour.

    “CAPMI has not really yielded the optimum result because DISCOs said their personnel cost went up because of the issue of labour where they had to pay 50 per cent, so they don’t have money,” he said.

    He recalled that under the old Multi-Year Tariff Order (MYTO), the DISCOs were expected to provide meters in 18 months, which did not work out before the commission introduced the CAPMI for customers to pay for meters and get repayment through energy credit.

    He said though the policy did not work, the new review would be clear on metering. Amadi said upon the release of the N213 billion power sector intervention fund, the commission would table the business plan of the DISCos and the commitment they made as a benchmark.

    The NERC boss said the fund was not for future intervention, stressing that it covers the period when the new owners took over the entities on November 1, last year to November 1, this year. He noted that the new operators must indicate the actual losses and the improvement they have made in their operations.

    He said: “We will expect that DISCos will come out full swing and roll out meters not on CAPMI basis but on their normal metering plan. And with this new fund coming in, we will give mandate that the action starts quickly.

    “There are many options and we are still discussing. We might make the new tariff contingent for a few months on clearly delivered metering settlement. This is because the biggest let down in this market today is lack of meters and scarcity of energy.

    “There is scarcity of energy because of lack of gas, lack of robust metering coupled with revenue shortfall. This has made it difficult to force the DISCos to meet their business plan, which includes metering.

    “And don’t forget that the business plans that these new owners used to secure these assets have clear commitment on metering. So our job is to bring up those commitments and sign off with them and use it as a benchmark.”

  • Firms reject new airport tariff

    The Federal Airport Authority of Nigeria ( FAAN) has concluded plans to implement a new charge regime on ground, office rents, apron pass, terminal car stickers, car permits as well as operational vehicle stickers. This development has drawn the ire of airlines, ground handling firms and other concessionaires at the Lagos, Abuja and Port Harcourt airports. They argue that the development will not only push them out business, it could force them to cut corners. Aviation Correspondent, KELVIN OSA OKUNBOR , reports.

    The bid by the Federal Airports Authority of Nigeria (FAAN) to  generate revenue  has pitted it against airlines, ground handling firms, catering outlets, cargo companies and other concessionaires at the Lagos, Abuja and Port Harcourt airports.

    The operators have vowed to block the airport authority from collecting new rents on ground and offices, car permits and operational vehicle stickers, describing the move as wrong.

    The resistance of the operators is coming on the heels of the rise in the  charges. Some  operators say  the new charge might have adverse effects on their business.

    Industry watchers warn that the exhorbitant tariff could force operators to cut corners, thereby having serious infraction on air safety and security.

    Ground handling firms, domestic and foreign airlines, catering outlets and other ancillary service providers at the Murtala Muhammed,Port Harcourt and Nnamdi Azikiwe International Airports have raised the alarm over   arbitrary charges rolled out by the Federal Airports Authority of Nigeria (FAAN).

    According to investigations, the increase in the charges range from 30 per cent in some categories to over 1,566 per cent increment  in others.

    However, stakeholders, acting under the auspices of Airport Operators Committee (AOC), comprising the Skyway Aviation Handling Company Limited, (SAHCOL), the Nigerian Aviation Handling, Company, (NAHCo), Plc local and foreign airlines and concessionaires to FAAN are mapping out strategy to resist the authority  from enforcing the  charges.

    Major international cargo airlines, including DHL, Cargolux, Emirates Cargo, Ethiopian Airlines, Lufthansa Cargo Airlines, IAS Cargo  and  Kenya Airways  and others are affected by the new regime.

    The President, Association of Foreign Airlines Representatives in Nigeria (AFARN), Mr Kingsley Nwokoma, described the new charges as unacceptable.

    He said foreign airlines had written to FAAN to express disapproval to the new rates. FAAN, he said, was yet to respond to its letters.

    This development has led airlines and other operators to park some of their operational vehicles outside the apron to avoid payment of the new charges.

    But the General Manager, Corporate Communications FAAN, Mr Yakubu Dati, described the new charges as part of efforts to boost revenue.

    Dati said: “The new charges are in line with the general increase of our tariff last year. The new rate was not affected till this year, to give the operators ample notice. FAAN   applied static rate in the last 11 years as its cost recovery strategy.

    ‘’The International Civil Aviation Organisation (ICAO) recognises that whatever service is rendered should include cost recovery. The maintenance of runway, terminals and other safety infrastructure has necessitated  this measure which is for the sake of safety.”

    A document by FAAN showed that under the new charges, airlines, ground handling companies, airline catering outfits in Lagos are expected to pay N2,000 per square metre as opposed to the old rate of N1,500 per square metre, which represents over 33.333 per cent.

    Ground handling firms, airlines and other service providers in Lagos are also expected to pay N60,000 as opposed to  the old rate of N30,000 representing over 100 per cent increase.

    Operators in Lagos are to pay N150,000 for apron pass as opposed to the old rate of N50,000, representing 400 per cent increase.

    In Port Harcourt, ground handling companies, airlines and other operators are expected to pay N2,000 as ground rent per square metre as opposed to the old rate of N500 per square metre representing 300 per cent increase.

    For apron pass in Port Harcourt, the affected firms are expected to pay N1.2 million as the new rate as opposed to N250, 000 representing over 380 per cent increase.

    The affected firms are requested to pay a new charge of N20,000 and N500,000 for car permit and operational vehicles sticker.

    In Abuja, the new rate for apron pass is N250,000 as opposed to N250,000, which represents over 1,566  per cent increase.

    According to an official of the affected firms, who declined to mentioned his name in print, such arbitrary increase in charges by FAAN could act as a disincentive to investors in the sector.

    He said the new charge is having adverse effects on the revenue of the firms at the three airports, adding that if not properly managed it could affect safety.

    He said to avoid the new rates, operators may be forced to cut corners, a development that is inimical to the growth and development of the industry.

    He said FAAN should carry stakeholders along in their bid to introduce new charges, such that operators could adjust.

    He said: “What I think FAAN should have done is to carry stakeholders along, while increasing their various charges. I am convinced that these charges just increased for operators in three airports are arbitrary. It is already affecting many firms. There was no effective communication with stakeholders. With what they have done, airlines and others would find it difficult to invest in the airports, because arbitrary increase on operational charges could be introduced anytime.

    Such inconsistency in policies confirms the arbitrariness in the system. I wish FAAN would focus on non aeronautical sources of revenue, as it is done in other parts of the world.”

    Investigations also shows  that the new charges are exclusive of the five per cent turnover the agency collects from most of its clients annually while it also receives about seven per cent on each kilogramme of cargo cleared for importation by ground handling services.

    Meanwhile, a source hinted that  some of the old charges were introduced a few years  wondering why the agency would want to increase the fees within  barely 24 months after.

    The source said: “We, as AOC members, have met several times with FAAN on these new charges and told them that we won’t be able to pay them because they are so arbitrary that we can’t afford them. In other developed airports, some of these charges are not paid by operators, but FAAN is forcing them on us.

    “However, FAAN officials have been going round disrupting our operations and causing unnecessary delay to our clients, especially at the tarmac. We have even written a petition to the Ministry of Aviation on this, but till now, we have not received any response from them. It is unheard of anywhere that you increase charges yearly, especially in a sector that we are striving to survive.’’

    The managing director of one of the ground handling firms, who pleaded not be named, urged the government to create more spaces for operators in cargo business.

    The creation of additional space, he said, had become key because of the volume of cargo and equipment they use at the airside.

    “We don’t need to be begging for space, especially when we said we are giving an option to allow private sector participation, how do you help them if they continue to beg for space; if they are continually denied of space, how do they expand?

    “Warehousing cargo is the duty of handling companies and airlines that are in it,’’ he said.

    He, however, said the FAAN might want to build warehouses but it must offer it to a handling company that would manage it.

    He said FAAN has no business in cargo handling. He said: “Absolutely, they are our landlord; they are the owners of the airports. FAAN is the landlord; we are the ones to move in, since we say it is private partnership. You want private investors to come in; when they invest, how do they get their money back; if we have a competitor, who is our landlord?”

    The chief executive of another cargo company, who also pleaded not to be named, identified erratic power supply as part of the challenges ground handling firms are struggling with at the airports.

    He said: “Infrastructure at most of the airports are not in top shape. Power supply is the biggest challenge. It has increased the cost of operations. We are hopeful that with privatisation of the power sector, things will improve. We are also recommending to the government that there should be an independent power project for the airports. This will enhance power supply to the airports.

    ‘’This is not  our  problem alone, but a significant problem for the private sector. It has affected us a bit. We run several generators and provide some infrastructure around the airports such as Closed Circuit Television (CCTVs) and a lot of other things.

    ‘’At the end of the day, because the primary issue in this industry revolves around safety and security, we cannot but do these things because if we don’t, we might not be in business.

    ‘’If you look at our results in 2011 and 2012, at the profit and loss, you will see that we have been spending lots of money to maintain those things. It’s part of the cost of doing business, but we sincerely hope and pray that with the privatisation of power and other reforms being undertaken by the Federal Government, we will see the impacts of those things on our cost profile and we can become more profitable and give our shareholders more dividends.”