The Federal Government, on Wednesday, approved N6.33bn for technical support services at the Murtala Mohammed International Airport, Lagos and the procurement of a wide area multilateration air traffic management system at Port Harcourt International Airport, Omagwa, Rivers State.
The Minister of Aviation and Aerospace Development, Festus Keyamo, disclosed this to State House Correspondents after this week’s Federal Executive Council meeting presided over by President Bola Tinubu at the State House, Abuja.
Keyamo noted that the approvals were for the ministry and the Nigerian Airspace Management Agency.
The technical support service, which involves maintenance of the new international wing of the Lagos Airport, will be carried out by the China Civil Engineering Construction Corporation Ltd. for five years, costing N4.1bn.
The multilateration air traffic management system to be sited at the Port Harcourt International Airport would cost N2.23bn.
An MLAT, as it is alternatively called, uses mathematical calculations to determine the aircraft’s position and is often used when aircraft are not transmitting their exact position via Automatic Dependent SuSurveillance–BroadcastKeyamo explained the scope of the maintenance contract, saying it would cover “the chillers, the air handling units, the passenger boarding bridge, the escalators at the concourse, the remote boarding lifts that were specifically made for the physically challenged, and all those facilities they put there.”
“It is for the first five years for a contract sum of N4.1bn, inclusive of 7.5 per cent VAT, with a completion period of five years. It is for the comfort of the travelling public, for Nigerians,” he added.
The Minister gave the reason for the FG’s choice of CCECC, saying, “We have struck a deal with the same people who built the place. It’s only natural that they are the same ones who should maintain the facility for the first five years.”
For the Port Harcourt airport, Keyamo noted that the new equipment is mainly for communication and includes remote assets devices and other accessories for the wide-area multilateral air traffic management system.
He said, “The second memo concerns some navigational equipment at the Port Harcourt International Airport. The equipment is for communication; they call them the VHF FM radios, remote access devices and other accessories for the wide area multilateration air traffic management system at Port Harcourt.
“So we are purchasing these equipment for Port Harcourt International Airport at the sum of N2.23bn inclusive of 7.5 per cent VAT, with a delivery period of nine months.”
Keyamo, who stopped short of naming the contractor, said, “It has been awarded in favour of a company that is the representative of one of the best companies in the world that produce such communication equipment for the aviation sector.”
Meanwhile, the FG said it would review the issuance of waivers on duties in the country.
Minister of Information and National Orientation Mohammed Idris, who disclosed this to journalists at the briefing, said the Council is making a move to minimise revenue loss.
He explained, “There is also the issue of other economic policies discussed at Council today.
“Of note is the issue of waiver, in addition to so many other decisions taken. You’ll recall that Customs has reported that in 2023 alone, they’ve lost over N1.3tn to waivers.
“Council has decided to look at those waivers and review them so that Nigeria will not continue to lose money at a point that we all need these resources for the development of the country.”
In recent years, controversies have arisen on the waivers granted to businesses by the Nigerian government, especially given the significant rise in the cost of these exemptions.
The PUNCH reports that in 2021, the Nigerian Customs Service granted tax exemptions totalling N2.29tn, a staggering increase of nearly 195 per cent from the N779.74bn in waivers granted in the previous year.
This exemption included relief from various duties such as import VAT, import duties, and other levies, which are typically granted to protect local businesses, create jobs, and promote exports but can also lead to revenue loss and potentially be abused.
In response to these concerns, the Federal Government, through the 2022 Finance Bill, said it is looking to phase out tax exemptions for mature industries.
Another PUNCH report noted that this change could impact approximately 172 companies operating across 71 industries, which are currently awaiting approval to become beneficiaries of tax incentives under the Pioneer Status Incentive.
This incentive exempts companies from paying income tax for a certain period to stimulate economic investments. Companies such as Dangote Coal Mines Limited and Seven/Up Bottling Company Limited are among those with pending applications that might be affected.
