Lagos – Almost four months after the Farnborough Airshow in London where the Federal Government unveiled the name and logo of a new national carrier, Nigeria Air, the government has debunked the claim that it spent $8.8million on the project in United Kingdom (UK).
The government also denied that it spent another $600,000 in designing the logo of the suspended airline in Bahrain.
Senator Hadi Sirika, the Minister of State for Aviation, stated this yesterday at the fifth Aviation Stakeholders’ Forum held in Abuja.
Sirika, however, declared that the impending airline would still be launched by the Federal Government, stressing that manpower development could only be achieved in the sector through a national carrier.
It would be recalled that Sirika had embarked on the Farnborough Airshow in London on July 18, 2018 with the Chief Executive Officers (CEOs) and other government officials.
But some stakeholders in the sector had alleged that the government spent several millions of dollars on the project, including $8.8million for TA.
Sirika explained that the project was suspended because the Transaction Advisers (TAs) that was to spell out the ownership model in the privatisation and shareholding process, did not complete the process.
For instance, Sirika, pointed out that Lufthansa, which was the first approved transaction adviser was rejected due to its outrageous demands, which included opening an escrow account, refusal to pay tax and demand for 75 per cent up-front payment.
He emphasised further that another major factor that stalled the process was the inability of the Federal Government to provide sovereign guarantee for the procurement of 30 airplanes estimated at $300m in a staggered payment till 2020.
He said: “Estimated funding requirement for the establishment of the project is 300million dollars up to 2020. Initial start–up capital of $55million made up of $25million dollars for deposit for new aircraft and $30million for working capital from June to December 2018.
“Estimated working capital for 2019 is $100million estimated working capital for 2020 of 145 million dollars to be provided by the Strategic Equity Partners who are expected to manage the project.
“Already, IsDB, AfDB, AFREXIM, US-EXIM, Standard Chartered Bank, Boeing, Airbus, COMAC/CCECC, BOAD, China-Exim, Qatar Airways, Ethiopian Airlines, Deutche Infrastructure Finance, French and US Governments have indicated interest in the project.”
He explained that the name of the national carrier “Nigeria Air� was obtained by engaging the general public through social media campaign where over 400,000 persons engaged within one week of campaign on Facebook.
He noted that no foreign company was paid $600,000 for the design of the logo as speculated, adding that due process was followed in the branding, which included obtaining “No Objection� Certificate with Ref. No. BPP/RPT/18/VOL.1/075 from the Bureau of Public Procurement for the sum of N50,893,000 and payment for these services is yet to be made.
He, however, assured that the consortium comprising Airline Management Group Ltd, Avia Solutions Ltd and Tianaero FZE had completed the Outline Business Case (OBC) Report and ICRC reviewed the report and issued OBC Certificate of Compliance, adding that the report has been presented to the Federal Executive Council for consideration to move to the Procurement Phase and then Full Business Case (FBC).
Speaking on the transparency of the Process, Sirika said: “The processes fully complied with the Public Procurement Act, 2007 and the ICRC Act, 2005; the aviation sector roadmap was presented to Stakeholders for inputs and buy-in at several fora; a project implementation management structure comprising inter- ministerial Project Steering Committee and Project Delivery Team were constituted to oversee project implementation as earlier highlighted.
“The appointment of Transaction Advisers followed due process culminating in Federal Executive Council Approval after 13 months.”
On the justification and desirability of national carrier, the minister said no domestic airline has evolved to fill the vacuum left by Nigeria Airways since it ceased to operate more than 15 years ago due largely to wrong business models, low capitalization and poor governance structure.
In addition he noted that only 28 out of Nigeriaâ€
s Bi-lateral Air Service Agreements (BASAs) with 83 countries are active on national carrier.
“The national carrier is needed to give impetus to the emergence of Nigeria as hub for the West and Central Africa, promote reliable air transport services, support the growth of the aviation industry and domestic airlines through infrastructure expansion, traffic/routes expansion and manpower development associated with the National Carrier, create employment and compete with foreign airlines for a share of international routes through competitive pricing thereby reducing capital flight,” Sirika added.
The post National Carrier: FG Debunks Expending $8.8m On Farnborough Airshow appeared first on Independent Newspapers Nigeria.
National Carrier: FG Debunks Expending .8m On Farnborough Airshow
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