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Kotoka International Airpor
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Airport lands have become the target of land encroachers.
Charles Benoni Okine & Jessica Acheampong report.

The massive encroachment of airport lands by some estate developers and land dealers is seriously affecting the operational safety and future expansion of the country’s only international airport, the Kotoka International Airport (KIA).

The situation has come about as a result of the unresolved post-decoupling issues relating to assets sharing and title transfers between the Ghana Civil Aviation Authority (GCAA) and the Ghana Airport Company Limited (GACL).

Reports available to the Graphic Business indicate that there are some individuals who are deliberately thwarting the effort of the GACL to arrive at an amicable conclusion of the post decoupling issues to allow for the lands belonging to the GACL to be properly documented to avoid further encroachments.

As the country is fast becoming the aviation hub in the sub-region in spite of some other challenges, the management of the GACL is said to be doing all it can to expand the airports to accommodate more airlines which want to add to the fleet that fly in and out of Ghana.

In her presentation to the shareholders of the company at the maiden Annual General Meeting of the GACL, Mrs Doreen Owusu-Fianko did not hide her feelings when she admitted to the challenges of the land encroachments.

She mentioned the cause of the unfortunate phenomenon saying; “Post-decoupling issues relating to assets sharing and title transfers are still unresolved”.

She stated that the major challenge was the acquisition of title to airport lands which the GCAA never had.
As a result, Mrs Owusu-Fianko told the AGM that the issue was fuelling what she described as the “uncontrolled encroachment on airport lands”.

She said this was, fuelling safety of operations and potential for future expansion of the airport, adding that “over the years the airport had become the toast of many international airlines”.

There are some expansion works already underway to create more space for more aircrafts with bigger capacity. These include the expansion of the runway to accommodate bigger aircrafts; expansion of the tarmac to create more space for more aircrafts and the rehabilitation of the existing tarmac.

Sources within the GACL told the Graphic Business that there was a committee comprising representatives of the various parties including the sector ministry and the Lands Commission among others, to expedite action of the issue which seem to be getting out of hand.

About the other challenge affecting the company, Mrs Owusu-Fianko said the GACL was established with only GH˘1 million as its stated capital and noted that; “This amount though inadequate, is yet to be paid up by the shareholder”.

According to her, the situation is impacting significantly on the ability of GACL to raise financing to renew its aging infrastructure.

Mrs Owusu-Fianko said the company required significant investments to match the expected increase in airlines flying into the country, coupled with the continuous growth of passengers.

Against this background, she called for urgent action to ensure that the country remains a competitive destination and route for the major airlines intending to fly into the country.

Tax Exposure
The GCAL boss said, taxes which include the Value Added Tax (VAT) imposed on the safety of critical goods and services was escalating charges to the extent of making the vibrant airport uncompetitive within the sub-region.

She indicated that the imposition of any tax on aeronautical revenue and payment into the general consolidated fund for general use was frowned upon by the International Civil Aviation Organisation (ICAO).

“Even though Ghana is a signatory to the ICAO conventions, particularly ICAO DOC 8632: (ICAO’s policies on taxation in the field of international air transport), Ghana is yet to be fully compliant”, Mrs Fianko added.

She added that “Indeed, ICAO and the International Airline Transport Association (IATA) have to be furnished with financial statements of civil aviation organisations as a monitoring mechanism”.

In spite of the challenges, Mrs Fianko who has been hailed as an optimist among her peers said the GACL is poised to make great strides in ensuring that the KIA remained the gateway to the sub-region.

“The outlook is bright as we plan to leverage the stability of the country to attract more airlines into KIA and also improve facilities at the regional airports to help improve domestic transportation of people and goods for economic development”, she said.

Financial Performance
The company achieved a profit before tax of GH˘15,296,888, in 2010, representing an increase of 156 per cent over the previous year’s levels of GH˘5,967,384, an achievement recorded on the back of what the MD of the GACL described as “improved revenue and effective cost management practices”.

Operational income also saw a hike by 30 per cent from GH˘40 million in 2009 to GH˘52 million in 2010 in spite of the global financial crisis that affected air travels negatively.

Airside revenue also grew by 23 per cent from GH˘7.7 million in 2009 to GH˘9.5 million in 2010 on the back of the frequency of airlines flying into the country.

Other areas of the operations of the company that also saw some marked improvements were the airport passenger service charge which grew from GH˘19 million in 2009 to GH˘27 million while that of aeronautical revenue which comprised rental income, car park revenue, royalties and as well as other revenues, recorded a growth of 20 per cent to GH˘15.9 million in 2010.
Source: Daily Graphic

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