Saturday, January 12, 2013

■ BURUNDI: Lack of political, legal will sabotaging the privatization of Air Burundi, Civil aviation authority.

Air Burundi logoBureaucratic infighting and legal nit picking are amongst the causes of the Burundian government's ongoing battles to reorganize and in some cases, privatize, its ailing civil aviation industry.

The first hurdle lies with the country's civil aviation authority and its transition to a new independent body, which was promulgated into law in May 2012 by the President of Burundi, Pierre Nkurunziza. The move was meant to replace the country's current authority Régie des Services Aéronautiques (RSA) with a new Burundian Civil Aviation Authority (BCAA), but so far, nothing has been done. This comes despite the insistence of both the Burundian Parliament and the staff of RSA who have pushed for the formation of the BCAA.

Trade unionists have said government is afraid of the financial and administrative autonomy that would result.
"Except that since nothing has changed for reasons related to the autonomy of administrative and financial management that would result," said Stany Ndayisaba, president of the civil aviation union STAC (Syndicat des Travailleurs de l’Aviation Civile). 
Source [IWACU-Burundi]

Government, however, claims the main reason in lack of progress is the need to change the country's Finance Act which requires that all state revenues go through the Central Bank to a single treasury account, conflicting with the independent nature of the BCAA.

This delay pushed the union to launch a strike last October following which, the country's Vice-President Marina Barampama and the minister responsible for Civil Aviation promised to resolve the issue quickly, though as of January, no word has been heard.

Air Burundi MA60
Air Burundi MA60 (xintianyou)
The country's second legal obstacle is that of the ongoing privatization of Air Burundi (8Y) which has been bogged down by issues pertaining to the carrier's 90% shareholding in SOBUGEA (Société Burundaise de Gestion Aéroportuaire), the country's airport management company, who claim that privatization would be the death knell for parastatal.

Staff at SOBUGEA refuse to be associated with the process of privatization at Air Burundi arguing that they are two separate legal entities.

According to Thérence Mushano, first secretary of the SOBUGEA workers union, the Privatization bill introduced by the government contains many irregularities. Firstly, Mushano says, the company "Air-Burundi/Sobugea" does not exist: 
"The first is a public company created in 1975, governed by Decree No. 100/160 of September 5, 1997 while the second was born in 1981 and governed by the laws of 12 March 2008." He added later that that although privatization was discussed a while ago, these two companies should be taken separately: "Each has its heritage and its status. Contrary to what is stated in the explanatory memorandum, any reform concerning Air Burundi does not include SOBUGEA."
 Source [IWACU-Burundi]

In the past, proposed suitors for Air Burundi have included the Aga Khan Fund (who own the Celestair Group of Air Uganda, Air Mali and Air Burkina Faso fame) and various Chinese investors, but nothing has borne fruit as of late.

Regardless of the outcome of the dispute, any potential investors in a privatized entity such as Air Burundi or the BCAA will be wary of the lack of a robust, clear legal framework that specifically defines each company's activities and roles. With the national carrier currently grounded for unknown reasons, despite having engaged a new CEO - former Mayor of Bujumbura, Evrard Giswaswa - and two Chinese made MA-60s, its future, along with that of the BCAA, looks bleak without decisive political leadership to give it direction.

Thanks to Bigogwe Masaka.