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No
separate Value Added Tax (VAT) was paid by the House of Representatives
on the 380 units of cars Peugeot Automobile Nigeria Limited sold to the
legislative chamber in 2008, the Federal Inland Revenue Service, the
agency saddled with the task of collecting taxes and remitting same to
the government, has said.

The agency’s
statement was meant to clear the air following weeks of speculation and
allegation that the leadership of the House of Representatives paid the
tax on the cars.

The issues were
raised and cleared at a board meeting of FIRS, held on Tuesday at the
agency’s headquarters attended by a NEXT correspondent.

Speaking at the
meeting, Samuel Ogungbesan, the Acting Executive Chairman of the
agency, said from the records available, the House of Representatives
did not pay VAT on the cars.

Mr. Ogungbesan, the
Coordinating Director of Tax Operations Group (TOG), is holding the
brief for Ifueko Omoigui-Okauru, the executive chairman of FIRS, who is
currently on leave. He said FIRS was disturbed over the speculative
reports in the media on the issue.

“At FIRS, the VAT
element of our business is a multi-staged system. But what we advocate
is that it should either be paid between the earliest point of sales
and the end point of consumption. The truth of the matter is that VAT
was not paid by Reps on those cars.

“The reason why it
was not paid is that the price quoted and submitted by PAN was already
inclusive of VAT. PAN had said that the price it was quoting was
inclusive of VAT.”

Explaining how PAN
could demand VAT as part of the contract cost of the cars’ purchase,
Mr. Ogungbesan said it is possible under the multi-stage system of
paying VAT in the country.

“Of course, as a
trader, PAN could insist on collecting the amount for VAT so as to be
in charge. This might account for the reason they will demand for the
payment of VAT in the original cost.”

A non-governmental
organisation, the Human Rights Justice and Peace Foundation (HRJPF),
had accused the leadership of the House in separate petitions to the
EFCC, the Presidency, Attorney-General of the Federation and Minister
of Justice, as well as the Federal Inland Revenue Service of paying
double VAT on the cars and making about N530 million on the 380 units
car deal.

According to the
group, the payment of N117 million to the FIRS was unlawful as it
amounted to double taxation and a waste of tax payers’ money since VAT
was already included in the N2. 3 billion quoted by PAN paid for the
cars by the House.

But Dimeji Bankole,
the Speaker of the House of Representatives, has denied the allegation
and urged the EFCC to investigate and prosecute anybody found to have
contravened the laws.

However, Mr. Ogungbesan could not state categorically whether the
House of Representatives was exempted from paying VAT on public goods
and services as was also speculated before now.

Jerome Mourinho is
stressed. As the Chief Operating Officer of Bi-Courtney Aviation
Services Limited, the concessionaire of the Murtala Mohammed Airport,
Ikeja, Lagos, he is charged with making sure the airport is run
efficiently and profitably too. To do this, he needs to work closely
with the Federal Airports Authority (FAAN), the statutory body that
supervises the management of facilities at the airport and which
concessioned MMA2 to Bi-courtney in a Build Operate and Transfer
agreement.

Yet, this
relationship, which should be a close and fruitful one, is strained.
The reasons border on accusations and counter accusations of debt and
refusal to honour contractual agreements.

At a Senate
Committee appearance in May, Richard Asuebeogun, managing director of
FAAN, said the organisation was being owed N714 million by Bi-Courtney
for revenues collected on its behalf and which Bi-Courtney is yet to
remit.

But Bi-Courtney was
quick to counter FAAN claims, saying that it is infact FAAN which is
owing the company N11 billion. According to Bi-Courtney, the concession
agreement it has gives it control over all scheduled domestic flights
in and out of Lagos State.

Relying on a court
judgement on March 3 2009, which says Bi-Courtney should run the
General Aviation Terminal, GAT, the company said FAAN is supposed to
relinquish control of the terminal to the concessionaire and also remit
all revenue it has so far collected because, as far as it (Bi-Courtney)
is concerned, those monies are revenue which should legitimately come
to the company.

FAAN insists that
GAT is not part of the concession agreement, and so does not form part
of the revenue expectations of the concessionaire. “What they say we
owe them is for take-off and landing of aircraft at the General
Aviation Terminal (GAT). They are relying on a judgement which stated
that Bi-Courtney has right over GAT.

The concession
agreement does not include GAT, so they cannot be laying claims to
services rendered at that terminal. In any case, we have briefed our
lawyers. In the previous case, they listed only the Attorney General as
defendant. We now want to be joined in the case,” said Akin Olukunle,
general manager, public affairs of FAAN.

Bi-Courtney insists
that its counter-claims were genuine, based on obligations under the
concession agreement between it, the Federal Government of Nigeria, and
FAAN, dated April 24 2003, and as varied by the supplementary
concession agreement, dated June 26, 2004, and the addendum on February
2, 2007.

“You can have cargo
flights, or international flights but all scheduled domestic flights in
and out of Lagos state are covered by the agreement,” Mr. Mourinho
said, adding, “it is on these terms that the banks loaned us money.”

“MMA2 has capacity
for 4 million passengers a year; I am doing only 1.5 million. Will I
now tell the banks that I am now making less than 40 percent of my
projected revenue?” He asked rhetorically.

“This is an issue
that has been heard at the High Court, Appeal Court, and Supreme Court
and all judgements are in favour of Bi-Courtney”, Mr. Marinho said.

Efforts to get
response from FAAN on these particular issues were unsuccessful, as the
spokesman refused to respond to further enquiries.

Before now, the
late President Umar Yar’Adua, perhaps seeing the futility of
government’s position, directed the ministry of aviation to abide by
the terms of the agreement, since it is valid. At a meeting held in
July 2009 involving the parties, the late Yar’Adua said the review of
the concession period to 36 years, though valid, would need to be
reviewed. In the document of the special meeting on aviation, held on
July 7 2009, made exclusively available to NEXT, Yar’Adua directed that
the concessionaire be given the right of first refusal to develop GAT.

“Whatever
infractions that may have occurred are internal matters of government
who will revert to Bi-Courtney if there is reason to do so,” the report
added. The document concluded that the reviewed period will have to be
ratified by the Federal Executive Council before it can be binding on
government. The FEC is yet to ratify this part of the agreement.

Regulatory and legal issues

A competent source
who spoke on condition of anonymity, attributes the current imbroglio
to government’s penchant to always leave important things undone. He
said as at 2003, when the federal government was signing the first
concession agreement with Bi-Courtney, there was no existing framework
on how it should operate, practically giving the concessionaire the
liberty of dictating the terms. According to him, concession
arrangement were novel, and there was little in terms of competence on
the side of government agencies to draft an agreement that would be
beneficial to the country. This created a lopsided background for the
concessionaire to arm-twist the government to concede certain
privileges.

Not until November
2008, over a year after the final draft of the agreement had been
signed, did the government inaugurate the Infrastructure Concession
Regulatory Commission (ICRC), the agency that is to regulate all
concession and public private sector partnership (PPP) agreements and
infrastructure development.

But Mr. Marinho
dismissed this claim as unfair, saying the government had the Bureau of
Public Enterprises (BPE) protecting its interest. “This document was
with BPE for months They had consultants and lawyers who were working
on it on their behalf,” he said.

According to him,
Bi-Courtney was not the initial winner of the concession bid. “There
was a company called Sanderton, which was supposed to build the MMA2.
They were on it for nearly nine years and they could not develop the
project before we came in. So they already had a framework they were
working with before we came in,” Mr. Marinho said.

He said the
concession documents were with the BPE, Ministry of Aviation, Nigeria
Civil Aviation Authority (NCAA), and FAAN and so they are familiar with
the contents. “If it were these institutions that are making these
accusations, then I would be worried.”

However, our source
said the concession agreement was drafted mainly by Bi-Courtney, as
FAAN was reluctant to submit its own position. “FAAN showed no
preparedness to draft the document; thus Bi-Courtney took over. So the
perceived lopsidedness of the agreement cannot be blamed on
Bi-Courtney,” he said.

Ibn Na Allah,
member, House of Representatives Committee on the Judiciary,
collaborates this. According to him, the airport concession agreement
was skewed in favour of the concessionaire, and for this, he is
furious. Na Allah said FAAN lacked the human capacity to be able to put
up a decent agreement that would be in the interest of the country,
thus giving the concessionaire undue advantage of drafting the
agreements to suit them.

“Any staff of FAAN
legal department who took part in the drafting of that agreement should
by now be rotting in jail because they sold out Nigeria,” he said.

Spokesman for the
ICRC, Gbenga Odugbesan, said the commission is making an effort to
correct an already bad situation, adding that the commission met with
the parties in January and followed up two weeks ago in order to reach
an amicable settlement.

“ICRC is working
hard to resolve the issues and experts have been engaged to offer
inputs into the agreements. The interest of the commission is not to
jeorpadise each party, because the government needs massive sum to fix
infrastructure and it cannot do it alone”, he appealed.

Ope Banwo, a
lawyer, said the development is a reflection of government not being
accountable to the people. According to him, many of the interested
parties in the agreement were not carried along, hence the
disagreement. “While it is the responsibility of government to ensure
all interest groups are taken care of, they don’t do that. In fact,
there should be public hearings for people to debate any proposed
government concession before the government gives it out, but we only
see when they are signing the contract.”

No Continuity

The high turnover
of ministers and officials in the aviation industry may also be a
factor in the lingering crisis. From 2003, when the first concession
agreement was signed, to now, there has been seven ministers of
aviation, with five appointed since 2005. The story is the same with
FAAN. Since 2005, there have been four managing director in FAAN, with
the current helmsman, Richard Aisuebeogun, appointed in 2007.

“I am apportioning part of this problem to the breakdown in business continuity,” said Mr. Marinho.

“Every minister
comes with his own ideas and programmes. With the appointment of a new
minister or managing director, we have had to start the process of
explaining and negotiating all over again,” he said.

On this, Mr. Banwo
believes that there should be continuity in government policies .“Our
politicians do not practice government continuity principle. Every new
governor or president wants to start over by cancelling the previous
contracts or arrangements made by their predecessor simply to put their
own people in place, and that is hurting us.

“Developed nations
do not do that, regardless of which government is in power. They simply
wait for renewal time or new projects to start taking care of their own
agenda,” he explained.

According to the
lawyer, agreements are sacrosanct. “Our governments should consider
public interest before signing agreements. It is absurd to cite public
interest later to dodge your responsibilities under an agreement. That
is why they call it contract or agreement. It means you agreed to be
bound. You may review if there are clauses for review in the contract,
but you can’t just wake up and say I don’t like this agreement you
signed voluntarily on grounds of public interest,” he said.

He said government
should be careful about the type of facilities that it concessions, as
some amenities are too important to the wellbeing of the masses for
government to hands off entirely.

“I personally think
a lot of the concessioning is really bad for the country. I am an
unapologetic capitalist, but there are some things that should not be
concessioned like major roads,” he said.

Implications for investors

This scenario, no
doubt, has implication for the government’s drive to attract foreign
investments. Mr. Banwo said with the way government is handling the
issue, no serious investor would be willing to put money down for any
long term capital project. “Governments are supposed to live by their
words and agreements. It is called national credibility. If we lose
that, no serious company will risk investing major money here. ” Mr.
Banwo said.

According to Mr.
Marinho, it even has implications for local investors. “What about the
banks, they provided the funding. There are five airports across the
country that government has earmarked for concessioning. What is
happening to them?”

He said the banks
are refusing to advance credit to other parties interested in the
airports because of the way the Lagos airport is being handled. “When
they ask for loans, the banks tell them, go and meet Bi-Courtney and
let them tell you what they are going through. These banks need to get
their money back,” he said.

Grey areas

He admitted,
though, that there may be some grey areas in the agreement that may be
causing disagreement. “It’s a build, operate, and transfer. I am only
operating it now. At the end, it will go back to FAAN.”

He said the banks
that provided the capital for the project need to remain in business.
According to Mr. Banwo, the government is not often mindful of the
implication for investors. “We all know that most times that government
claim public interest, they are really trying to share the loot for
their own people. Anytime I hear ‘public interest’ in Nigeria, I know
somebody is about to screw us in Nigeria,” he said.

On his part, Mr.
Marinho blames the disagreement on the learning process that comes with
a novel idea. “Because we are pioneers in this relationship, there have
been challenges. There have been issues here and there, but nothing
that cannot be settled. We need FAAN to stay in business and FAAN needs
us for the revenue we generate. It was a federal government decision to
privatise, and the necessary parties signed.”

The hope is that
all parties will be magnanimous and shift ground. Mr. Marinho said all
the documentations are with the minster of aviation, Fidelia Njeze, who
is looking into the issue with the view of brokering an amicable
settlement. It is obvious that all the parties will have to shift some
ground in the interest of all concerned. This may be a tough one on
government, as Section 11 of the ICRC regulations states that “no
agreement shall be arbitrarily stopped or cancelled.”

What this means is that government still needs the cooperation of the concessionaire before any change can be effected.

I
have just finished Foreign Policy, an international magazine that
prides itself in in-depth reporting of international affairs around the
world. It is a magazine I respect very much and make it a point of duty
to read whenever it is published. The latest edition, which I’ve just
read, is devoted to the state of the world and the ranking of countries.

My concern here is
not about the ranking of countries, but the extra thing that the
magazine did about the compilation of what it calls “The worst of the
worst.” In this segment, the editors listed about 23 world leaders whom
they considered the worst leaders in their various parts of the world
and countries. Out of the 23 worst leaders listed, 13 are from Africa.

I am in no dispute
with the list because all the Africans on it are, by my own assessment,
eminently qualified for the disreputable compilation. In no particular
order, I will mention all the 13 disreputable leaders and run a brief
commentary on them, hoping that this would provoke a robust discussion
of the fate of the continent and show us why we are the way we are and
why we are where we stand today.

There is Paul Biya
of Cameroun, who the editors describe as “a suave bandit.” He has ruled
his country for 28 years and does not look as if he is ready to cede
power to anyone. He is, at least, not like his predecessor, Ahmadu
Ahidjo, who left power to him, even if not too willingly.

There is also Paul
Kagame, who came, like most others did, as a “liberator”, and has today
turned himself into the tin god of Kigali. He has spent just 10 years
in power and is determined to go further. With recent events in his
country, the killing of a rival military general in South Africa and
one or two other journalists, by the time he is done, he may have
beaten the record of the butcher of Kampala. Though I agree that Kagame
may have been able to bring some stability and development to his
country, the monopoly of knowledge and how to stabilise the country
should not begin and end with him.

In this infamous
company is Yoweri Museveni, a man who, when he was leading the rebel
army against the government of the late Milton Obote, was quoted as
saying, “No African head of state should be in power for more than 10
years.” Today, the shoe is on the other leg.

He is no longer in
the bush fighting to get to power, so it is easy for him to have
forgotten what he said. Museveni has, today, become the alpha and omega
of Uganda. On a recent visit to the country, I sat a few rows away from
his seat and he looked as harmless as a next door uncle.

He looked frail,
not as fearsome as the Museveni one hears of in the media. I pointed
this out to a Ugandan journalist who was at the event with me, and he
said I should not be deceived. I am not. Museveni has spent 24 years in
power and has forced down the throat of all, his everlasting rule!

Not left out of
this odious company is Blaise Compaore. This man who murdered his close
friend has stayed in power for 23 years. He has silenced all opponents
and has even received the endorsement of his colleagues in the West
African sub region, by chairing the ECOWAS.

The greatest
buffoon of them all is perhaps the joker in The Gambia, who goes by
some long honorific name and claims to have the power to cure HIV/AIDS.
Sixteen years after seizing power as a low ranking military officer, he
has sentenced more people to death over alleged plots to overthrow him
than any other African leader in his league.

Let’s take a break here and continue with the others next week.

The airport workers’ unions are
angry with the concessioning of the Lagos Airport, saying government
has replaced a public monopoly with a private monopoly.

Gideon Ogbuji, general secretary,
National Union of Air Transport Employees (NUATE), argued that FAAN is
losing enormous revenue to concessionaires operating in the airports,
“We have on different occasions carried out peaceful protests against
concessioning of not just that terminal (GAT), but of other revenue
yielding arms of the airport, and this is because most of the
concessionaires are not keeping to agreements,” he said, adding that he
terms of the agreements are not being adhered to by the concessionaires

“FAAN has lost huge sums, some of
which cannot be accounted for because of the inability of these
concessionaires to remit as at when due, and that is why we are
determined not to allow the error of handing over GAT to Bi-Courtney,”
he said.

Jerome Marinho, chief operating
officer of Bi-Courtney, said the unions were not party to the
concession agreement. “Bi-Courtney has no relationship with the unions.
We deal with the unions on the legal front. The issue with the unions
has to do with GAT transactions. They came in and aired their views.
The agreement was signed by the Attorney-general, minister of aviation,
the managing director of FAAN, and under the supervision of the Bureau
of Public Enterprise. So we have no direct relationship with the
unions.”

According to Mr. Ogbuji, the House
of Representatives Committee on Aviation asked the unions to resolve
their differences with the MMA2 operators instead of disrupting
activities at the airports, stressing that up till now, both parties
have not being able to agree.

“We (unions and Bi-Courtney) were
asked by the House Committee to discuss and come up with a resolution,
but so far no positive agreement has been reached. But the case is
still pending in court and we hope that we will reach agreement,
otherwise the situation remains the same; which is, GAT (general
aviation terminal) was not, and is not, in the concession agreement
between FAAN and Bi-Courtney,” he said.

Aturu Samuel, second national
president for the union, said the concessioning of the airports will
“definitely lead to serious job cuts among FAAN staff. They have taken
MMA2, and if they succeed in concessioning MMA Lagos, Kano, Port
Harcourt, Abuja, and Calabar from us, then FAAN will no longer exist,
and it is already collapsing if we allow them to do so,” he warned.

Mr. Aturu, however, disclosed that
workers are not against investors who wish to invest in the sector, but
maintained that the government should make “judicious use” of funds
meant for the industry. “We are not averse in foreign investors coming
to invest in Nigeria, but the government should abide by the rules
regulating the aviation industry globally,” he said, adding “Where is
the N19.5 billion naira aviation intervention fund?”