FAAN MD claims that N735 billion is required to fix runways, pension obligations, and other issues.
The permanent secretary praises the head of the agency.
Olubunmi Kuku, the Managing Director of the Federal Airport Authority of Nigeria (FAAN), stated that the organization urgently needs to increase airport fees to cover vital needs such as runway repair, pension obligations, and other vital infrastructure requirements, which would cost more than N735 billion.
FAAN
Kuku acknowledged the industry’s overall increase in tariffs and emphasized the significance of matching any adjustments with the quality of services rendered during a tour of the airport facilities in Lagos on Wednesday by Dr. Ibrahim Kana, Permanent Secretary of the Ministry of Aviation and Aerospace Development. She did point out that facility limitations may cause some increases to be postponed because any increase must be balanced with the services provided.
We acknowledge that some of these tariffs are influenced by the services we provide, therefore we must make sure that we can raise our prices to match the services we provide. “We do want to increase our tariffs because, obviously, everyone has increased,” the statement reads. The tariffs are scheduled to rise, but given the facilities that are currently available, we could have to postpone some things,” she stated.
Kuku stated, “We have a major pension liability in our books,” in reference to the pressing problem of the pension backlog. The amount was N155 billion as of 2021, and it would be significantly greater by the end of the ongoing valuation.
In addition to outlining the difficulties the agency faces, Kuku stated that the necessity for significant investment stems from the fact that aging airport infrastructure, including as runways and terminals, jeopardizes operating safety and efficiency. She pointed out that several airport runways, which were constructed in the late 1970s, have outlived their useful lives and that at least N580 billion is required to renovate them nationwide.
The runways at our airports need extensive restoration, and there are numerous chaotic jobs and abandoned projects. All airport runways need to be fixed, which will cost at least N580 billion. Since the majority of the airports were constructed in 1978 and have a 20–25 year lifespan, many of FAAN’s facilities, including as runways and terminals, are aged and require major repairs and renovations. This requires significant expenditure for modernization and has an impact on operational efficiency and safety.