State governors are spending billions on new airport projects across the country despite their poor revenue profiles and glaring economic undesirability of such projects, investigations by 21st CENTURY CHRONICLE have shown.
These huge investments are coming in most cases to massage the turgid ego of the state chief executives rather than any business considerations.
Checks by this newspaper revealed that at least 11 state governments are either already building a new airport or have indicated interest to build one.
Some of the states are Yobe, Zamfara, Nasarawa, Ogun, Osun, Ebonyi, Cross River, Benue, Lagos, Ekiti and Adamawa.
In the last two decades, some state governors had built airports which became dormant and economically unsustainable as most of them were not far away from already established airports.
Last year, the Federal Airports Authority of Nigeria (FAAN) had to takeover most of these state-owned airports – who have been largely transformed into glorified airstrips for governors to fly in their chartered aircraft, and in some instances use them once every year to airlift pilgrims to Saudi Arabia for hajj.
For instance, the N4 billion Dutse International Airport in Jigawa, built by Governor Sule Lamido and commissioned by former President Goodluck Jonathan in 2014, is mainly used for the airlift of the state pilgrims as well as when top government functionaries or VIPs are on a visit to the state and are flying into the airport on chartered flights or landing there to proceed to neighbouring states.
This is the same story for other state-owned airports in Kebbi, Gombe, Osubi in Delta.
Seventeen of the airports owned and managed by the federal government were unviable and operating at a loss for three years, a report said in 2020.
Apart from the Murtala Muhammed International Airport, Lagos; Nnamdi Azikiwe International Airport, Abuja; and Port Harcourt International Airport, Rivers State, none of the other airports across the country generated enough revenue to cover the cost of its operations alone.
Many of the state governors are however defying this glaring reality by embarking on this jamboree, calling them cargo airports for movement of agricultural produce. Some of these airports are:
Ebonyi International Airport
State officials said the Ebonyi International Airport is modelled after the Murtala Muhammed International Airport, Lagos and the Nnamdi Azikiwe International Airport, Abuja and is being built on a 4.5 kilometre land with a 3.5km runway.
The terminal is said to be the biggest terminal building in the country.
While the total cost of the project is unknown, the state government said it had budgeted N14 billion for the project in its 2021 budget.
Zamfara International Cargo Airport
In April 2010, the Zamfara State Government announced plans to invest 15 percent of the total $80 million for the proposed Gusau Cargo Airport, under a Public/Private Partnership (PPP) arrangement that would see the remaining funds invested by foreign and local firms, led by Malaysia’s MPK Group.
The airport was designed with a 3,900m runway.
In July of the same year, the state government awarded a N10 billion contract for the construction of the international cargo airport.
Not much was heard about the project till August 2019 when Governor Bello Matawalle announced resumption of work on the project and confirmed that the airport project was being executed under a $1 billion public private partnership with the Afrexim Bank.
By December 2020, the office of the Secretary to the State Government announced that operations at the state’s new cargo airport would commence by June 2021.
In May 2021, one month to the proposed take off date, the governor announced the end of 2021 as new take-off date.
Osun International Airport
Information on the state government’s website indicates that the State of Osun is currently implementing a project to build an international airport at Ido Osun, Ede North/ Egbedore Local Government Areas.
The project site holds an interesting historic value; it was the site of one of the earliest airstrips in Nigeria.
The airport, named MKO Abiola International Airport, is expected to serve human and cargo transportation.
The airport, which construction commenced in 2012, was planned to be built on 839 hectares of land.
In 2012, the state government awarded contract for the project to Aeronautics Engineering at the cost of N4.5 billion. An upward review in 2015 estimated the project to cost N11 billion.
Four years later, when it became obvious that the state government could not fund the project, after excavation work had begun, it opted for concessioning in 2016.
The project was consequently concessioned to All Works of Life (AWOL), in partnership with a Turkish firm and Exim Bank of Turkey.
Construction was to begin immediately and be delivered in 24 months and parties agreed on N69 billion, being 50 percent of the state’s budget for that year. The increase in project cost was said to be as a result of expansion and other modern facilities that were included by the contractor and approved by the state government.
As the proposed completion date in 2018, which was also supposed to be the 20th anniversary of the death of MKO Abiola who the airport was named after, approached, then governor, Rauf Aregbesola announced that no work had been done because the project failed and the contract was terminated.
It was learnt that the state had spent about N4 billion on the project as at the time of announcement.
In 2020, the state government announced that following expression of interest by some investors in the project, it would be offering it to a suitable investor to complete, operate and transfer to the State.
The state governor, Adegboyega Oyetola, had while briefing journalists in Lagos on the state’s economic summit, regretted that the federal government had not been forthcoming in committing funds to the projects as it was conceived as a joint venture and added that the state had decided not to commit more funds to the project, hence the decision to hand it over to private investors.
Benue Cargo Airport
In 2016, when the Benue State government flagged off the construction of a cargo airport at Daudu, in Guma Local Council, on the outskirts of the state capital, Governor Samuel Ortom, said that the project would provide a platform for quick evacuation of farm produce from the state to markets abroad.
The project with a two-year completion target, was estimated at N38 billion, out of which the state was to provide land and equity contribution of N5.2 billion in a Build, Operate, and Transfer (BOT) agreement, which was to last 25 years from the date of completion.
The private investor, Aerotropolis Development Company Ltd, was to provide the balance of N32.8 billion.
As at February 2017, chief operating officer of Cargopolis Development Consortium (CDC), Dr Daniel Tarka said the project was on schedule and would be completed in 2019.
The project, however, didn’t take-off and in 2019, the governor presented a N12 billion budget in the 2020 Appropriation Bill to the State House of Assembly for the project and said that the state would solely fund the project from Internally Generated Revenue (IGR) within two years to facilitate growth and development at the grassroots.
As at the last check, the project was yet to take-off.
Lekki-Epe International Airport
The Lekki-Epe International Airport in Lagos State was conceptualised to take off pressure from the Murtala Mohammed International Airport. A 3,500 hectare site for the airport designed to handle five million passengers annually with scope for future expansion was secured, 10 kilometers from the Lekki Free Trade Zone (LFTZ).
The first phase of the project was expected to cost $450 million and to accommodate the Airbus A380, the world’s largest passenger airplane, making it a Code F airport.
As at February 2014, Governor Babatunde Fashola, said land acquisition and preparatory work for the project had been completed and the government was seeking investment for it.
However, in May 2015, it became evident that the project had run into hitches as locals protested, saying the government had not compensated them for the land. Similarly, investors had yet to show interest in the project and the state government through the Commissioner for Commerce and Industry, Sola Oworu, had said work will recommence on the project once financing is in place.
Ekiti State Airport
The Ekiti State Government first indicated interest in building an airport in 2010. The federal government, however, denied approval and sponsorship of the project request by the state government.
In 2013, President Goodluck Jonathan announced plans to build an airport in Ekiti but until he left office, nothing was heard of the promise.
Following the promise, the then Governor Ayodele Fayose, acquired and cleared 4,000 hectares of land from rice farmers between Ado-Ijan-Igbemo and Afao Ekiti for the project which was initially projected to cost N3 billion.
It was later reviewed upward to N9 billion then N11 billion and later N17 billion.
When Governor Kayode Fayemi celebrated the first anniversary of his second tenure, he announced that the government was ready to resume work on the project which cost had been upgraded to N20 billion, through Public Private Partnership (PPP).
It was gathered that the PPP arrangement didn’t come through and so the state government has resorted to funding of the project from its coffers.
In March, Governor Fayemi announced that the state had handed over the construction of the 3.2 kilometres runway to the main contractor, CCECC Nigeria Limited, to commence work.
Adamawa State Airport, Mubi
In 2019, former Adamawa State governor, Mohammed Bindow, announced that the state had commenced the construction of an airport in Mubi area of the state.
He said a site had been identified and cleared, while the technical team was working with the state government’s consultants on technical evaluation of the project which will cover six square kilometres. The width of the site was said to be 3.2 kilometres, while the runway measurement was 2.4 kilometres.
Nothing has been heard of the project since Bindow lost his re-election bid in 2019.
Damaturu Cargo Airport
In September 2017, the Yobe State Executive Council approved N11.32 billion for the construction of an international cargo airport in Damaturu, the state capital.
The State Commissioner for Works, Alhaji Lawan Shettima, in November of the following year, disclosed that the project was set to be completed in the next five months (April 2019).
He said the airport’s runway was extended from 3100m to 4100m and the overall project was 67 per cent complete.
The target completion date was not met and in March, 2020, Governor Mai Mala Buni said the project would be completed by the end of April 2020 as the government planned to commission it in May 2020.
As at June 2021, the state Commissioner for Transportation and Energy, Alhaji Abdullahi Kukuwa said the state had spent over N18 billion on the construction of the airport which was initially estimated at N11.32 billion.
He also said the airport was ready for operations, pending the delivery of runway lighting equipment.
Lafia Cargo Airport
The Lafia Cargo Airport commenced in October 2015 when the Nasarawa State Government signed an MoU with Tongyi Group. According to the agreement, 75 percent of the financing was to be provided by Tongyi Group while the state would provide the remainder.
The airport was conceptualised to serve as an alternative to the Nnamdi Azikiwe International Airport Abuja, for both cargo and commercial services.
A few months later, then Governor Tanko Almakura said the project will require over N10 billion and confirmed that the government will contribute 25 per cent of the funds. He also said a new road would be constructed connecting the airport to the Federal Capital Territory (FCT), thus reducing travel time to one hour and allowing the airport to complement operations at Abuja Nnamdi Azikiwe International Airport.
Over five years on, the project is yet to be completed.
In March this year, the deputy governor of the state, Dr Emmanuel Akabe, while conducting the Minister of Information and Culture, Lai Mohammed on a tour of the airport, said the project would be completed before the end of this year. He said The runway was initially designed to be 2.2km but there were plans to extend it to 2.5km so that all kinds of cargo planes can land there.
Gateway Agro-Cargo Airport, Ogun
Located along Iperu-Ilishan, the Gateway Agro-Cargo Airport project at Ilishan, Ogun State, was initiated during the administration of Governor Gbenga Daniel.
Daniel was governor between 2003 and 2011.
Request for approval for the project was first sent to the presidency between 2005 and 2006 but was declined. However, in 2008, the late President Umar Musa Yar’Adua granted cargo and passenger license status to the proposed airport.
Checks revealed that the state government set July 2008 as take-off date for construction of the airport, followed by the feasibility and development studies of the project and payment of compensation to original landowners on the acquired project site.
A contract was signed with Dar-Al Hadassah of Dubai, United Arab Emirates for the construction works in a deal that involved consultancy for the master plan, a feasibility study, environmental assessment and technical design. The government also signed the contract for the topography survey, to be executed by UNILAG Consult, while Intelcon Partnership Limited got the contract for the soil testing of the proposed airport.
Thirteen years later, the project is yet to take off while the site, spanning hectares of land, has been taken over by land grabbers, scavengers who have turned it to a dump site, and farmers.
It was gathered that there is no provision for the project in the state’s 2021 budget.
International Cargo and Passenger Airport, Obudu
In 2020, the Cross River State government disclosed plans to commence construction of an airport in Obudu area of the state, Obudu International Passenger/ Cargo Airport.
Even though the state government said it had paid compensation to the tune of N900 million for the airport land, the actual cost of the airport which runway is about 5.6km in length with a width of 1km, is unknown.
In April 2021, Governor Ben Ayade, while inspecting the project, said it was 35 per cent completed within two months of moving to site and assured that all earthworks would be completed in the next four months.
The governor said the Obudu international Cargo and Passenger Airport and the state-owned airline, Cally Airline, were primed to change the economic status of the state as they would rev up its tourism potential.
The state government has already procured two Boeing 737 aircraft with carrying capacity of 142 and 144 passengers respectively for state-owned Cally Airline.
Only 4 of 22 airports are viable
Presently, FAAN manages 22 airports nationwide out of which only Lagos, Abuja, Port Harcourt and Kano International Airports are said to be commercially viable while the others are largely unable to fund their operations.
Upgrade and maintenance of facilities at the FAAN-managed airports, it was learnt, is proving difficult as FAAN is usually compelled to take up maintenance of airports that shouldn’t have been built by some state governments, who soon after, are unable to manage them.
Recently, air transport employees expressed dissatisfaction with the handing over of state-owned airports to FAAN without additional budgetary allocation by the federal government.
President, National Union of Air Transport Employees (NUATE), Ben Nnabue, said FAAN workers were displeased that no additional money was given to FAAN by the federal government for the management of the airports even as all the airports handed over to FAAN do not generate revenue that can sustain their maintenance and payment of salary of personnel deployed there.
What IATA says about airports viability
According to the International Air Transport Association (IATA) for an airport to be viable and self-sustaining, it must have at least five million passengers a year.
In Nigeria, currently, only Lagos and Abuja airports can boast of such air traffic in a year. Cumulative air passenger traffic for Nigeria in 2018 was 16,371,674.
Governors build airports without feasibility studies – Experts
The CEO of 7 Star Global Hangar, Engr Isaac Balami, told this newspaper that while it wasn’t exactly out of place for states to build airports, it was important to carry out feasibility studies to be sure they are viable, so that it doesn’t just end up as a thing of ego and pride.
“I can tell you categorically that some states have the capacity but we are underperforming in many areas so they do not know the kind of economic activities that can bring traffic to their states.
“In Zamfara for instance, where there is no airport, if not for lack of vision from past leaders, the amount of gold there as well as other economic activities could drive traffic to sustain an airport. If the government decides to mine and refine gold, people will come to Zamfara as they go to Dubai to buy gold,” he said.
The former president of National Association of Aircraft Pilots and Engineers (NAAPE) further stated that “I’ve attended many conferences in Akwa Ibom recently and I see the amount of people that go there. The fact that it is one of the peaceful states in that region and having an airport is an advantage.
“The level of activities in the state matter. Benue for instance has agricultural activities to sustain a cargo airport if they are serious about it.”
Balami said there are states who do not have the capacity to build and manage airports and they know so such states should focus on other economic activities that will make people want to come to the state while those with dormant airports should create programmes and activities that will drive traffic to their states.
Speaking in similar vein, CEO of Dataphyte, Joshua Olufemi pointed out that from an economic viewpoint, having airports in each state is beneficial for various reasons including direct access for investors, cargo.
He, however said the appetite of states to own or finance airports are not driven by the economic realities or conditions of their states.
“First, the finance is not readily available. Second, the manufacturing, agricultural, human and mineral resources that may attract local and foreign investments to the states are yet to be developed to bring about the return on investments. In my view, the funding (either from loans or grants) for airports is very large and this provides big procurement portfolio for state actors to siphon or misappropriate money without much scrutiny from the demand side of accountability.
“If you take the amount any of the debt-ridden states are projecting to finance an airport, and analyse the real cost of the money in terms of social infrastrcutures such as hospitals, schools, water, housing they can provide, you can tell the priorities are misplaced,” he stated.
Olufemi further stated that it’s fair enough to ask the government of these states to provide the numbers they are working with in terms of return on investment into airport or even as basic as the loan repayment structure they are basic the decisions on.
