Hefty Lease Rates For Airfields Burden CAAB

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  • The authority owes land boards millions

While the Civil Aviation Authority of Botswana (CAAB) continues to be financially burdened by maintaining its strategic airfields across the country, the situation has been worsened by the reviewed lease rates by land boards, now costing the authority millions per year.

Before the rates were reviewed in 2022, CAAB used to pay land boards P2300 for the 23 airfields annually, but the organisation’s chief executive officer, Dr Bao Mosinyi has revealed that they are now paying over P20 million for the same services.

Speaking during a media engagement in Maun this week, Mosinyi said owing to the changes they now owe land boards lots of money which the authority cannot afford to pay as the airstrips themselves are not generating meaningful revenue.

“This is something that is not sustainable because the airstrips just don’t make any type of money for us. Collectively, they don’t make P1000 per month though they are very expensive to maintain,” Mosinyi said calling for the government’s intervention.

“Something will need to happen, there are rumors that the ministry is reviewing the rates for better and if that doesn’t happen government will have to find a way to help us survive this.”

Meanwhile, Mosinyi has revealed that their approved five-year strategy covering 2024-2029 is focused amongst others on revenue growth targeting to make at least 500 million a year by 2029. “We need to make money because government subvention has been going down over the years since the expectation is that we have to sustain ourselves for the most part.”

He added that the strategy also seeks to improve their operational efficiency as without government subvention the organisation is not viable.

“By 2029, for every pula that we make we want to have used 83 thebe in costs because right now without government subvention we use P1.60 to make a Pula,” he stated.

However, the CEO is pleased that in their efforts to be self-sustainable, they have not only improved in revenue generation but are also significantly controlling costs, revealing that in the past year, their unaudited financials show revenue generation of P265 million. According to him, in 2020 they generated P176 million, 2021 (P61 million), and P181 million in 2023.

Mosinyi has also indicated that to support their strategy, the organisation needs to be restructured. “There has always been that need to restructure CAAB and the board has agreed to that. The proposal is currently at government level for that exercise to be facilitated,” he noted.

Mosinyi has however assured that the restructuring process seeks to optimise what they have, allaying fears of massive staff retrenchment.

 “The staff number may decrease or increase but the overall number will not change a lot, the efficiency of how we do things is the benefit that will come from the restructuring when implemented,” he assured. 

That as it may, the CEO has also indicated the need to appoint a substantive board for CAAB lamenting that there is a challenge to do corporate governance well without it. According to him the board currently has one member who is the chairman while the rest’s tenures expired in March.

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