Less than one year after obtaining a 66 million euros foreign loan which attracted criticism from several sectors in September 2013, the Bayelsa State government is shopping for another vast loan facility,this time from commercial banks within Nigeria.
SaharaReporters has learned that the loan is meant tofinance a cargo airport project near Amassoma in Southern Ijaw Local Government Area of the state.
Already, the Debt Management Office ranks Bayelsa as one of the most indebted states, and the new loanproposal will escalate the state’s debt burden if it sails through.
Governor Dickson last week forwarded a letter of request to the House of Assembly, which has an all-Peoples Democratic Party membership, seeking itsapproval for the state government to obtain the loan.
It has not been possible to ascertain the total cost of the airport project, but sources said the N40 billion loanfacility would attract a total interest of N32billion to be serviced within eight years, bringing the total repayment burden to N72billion.
Observers question the rationale for taking loans from commercial banks at the prevailing interest rate of 23 to 25 percent to finance a long term infrastructure project such as a cargo airport.
Dickson has reportedly assured the Assembly that the airport will be ready for use by the last quarter of next year.
He told them that the Federal Government's contribution to the airport project will be the construction of the terminal building, while its earlier contract awarded through the Niger Delta Development Commission (NDDC) to sand fill the site would continue.
"Out of the total estimated cost of the project, the state government has already expended the sum of N9.3billion for payment of compensation for land, consultancy services, construction of run-way and clearing of land, among others", Dickson’s letter noted.
Sequel to the governor's request, the House of Assembly on Tuesday invited relevant officials of the government to provide details of the N40b loan facility.
Those invited were the Commissioner for Finance, Duate Iyabi, Attorney-General and Commissioner for Justice, Kemasuode Wodu; the Accountant General,Tarimo Aseimo; and the Managing Director of BayelsaAirlines, Henry Ungbuku.
Appearing before the Committee of the Whole, presided over by the Speaker, Konbowei Benson, the four officials assured the lawmakers of the socio-economic benefits of the airport to the state and allayed fears that the loan may be diverted into private pockets.
There were indications that the 24-member ‘rubber stamp’ Assembly would quickly approve the governor's request because a majority of them had during the debate spoken in favour of the state government standing as a guarantor for the state airline.