AFL Clarifies Savusavu Airport Terminal Construction
The project manager incharge of overseeing the construction of a new airport terminal in Savusavu was terminated after an investigation found a stall in progress, it was revealed yesterday.
In submissions to Parliament’s standing committee on public accounts, a representative from Airports Fiji Limited (now Fiji Airports Limited) said strict new measures had been put in place following the discontinuation of the project.
“Initially, the contract was to design and build a new terminal that was awarded to Pacific Affordable Homes in 2010,” said senior management accountant Rohit Prasad. “There was some dispute and permit issues, so based on that the management corrected this through legal action which resulted in the contract being terminated in July 2017.”
He said the issue had since then been resolved.
The submissions were regarding questions about a 2015 audit report on state-owned entities and statutory authorities.
Work on the terminal was set to begin in 2012 after plans were first unveiled in 2011. Former company chairman Adrian Sofield was quoted by the Ministry of Information as saying $0.8m had been allocated for the project. Mr Prasad said Fiji Airports paid the contractor $199,000 in advance payments, of which $75,000 was paid back by the contractor as a performance bond.
“None of the people who had made the decision are at AFL,” said AFL’s financial analyst Vineet Naidu. “We have strict procedures in place (now) where payments to contractors are only made upon progress, which is independently verified by our consultants and our internal team.”
Mr Naidu also presented to the committee AFL’s financial results in 2015.
According to statistics, the Government-owned entity recorded operating revenue of $91.53 million, which Mr Naidu said was its highest so far. Operating expenditure stood at $45.88m. Its net operating profit before tax was at $46.04m, while a total of $15m was paid out to Government in dividends. Passenger numbers also recorded an increase by about five per cent, according to statistics, to about 1.85 million.
AFL’s major earning streams come in the form of aeronautical, air navigation and commercial revenue from tenants.
Another “long and outstanding” issue that came up was new lights for the Nausori Airport runway. Mr Prasad said: “For Nausori, the airport lights were purchased for replacement of runway lights in 2011. Subsequent to this purchase, the Government had a meeting with Airports Fiji to explore the explore the extending of the runway for larger aircrafts.
“At that stage, (we felt) it was prudent for business to hold the decision to upgrade the lights to avoid wastage when the runway itself was upgraded to different scope.
“As I speak, these lights were replaced with some of the default lights that were in Nausori and also the leftover items were taken into our fixed inventory in 2016 and this has been fully utilised in Labasa runway.”