$8.8m not spent on Nigeria Air–Sirika

 

…says N90m was only committed to it

…No foreign company was paid $600,000 to design logo

 

Posted by Sade Williams

 

Minister of state, Aviation, Sen. Hadi Sirika, on Thursday, laid to rest some of the controversies that have trailed the suspension of the national carrier project, saying for instance, that the sum of $8.8million was never spent on the project as peddled in the media.

 

He said this at the 5th Aviation stakeholders’ forum in Abuja, saying only a little over N90 million was committed to it so far.

 

He added also that the there was no time $600,000 was paid to any foreign company to design the Nigeria Air Logo, adding that due process was followed throughout.

 

“Due process was followed in retaining the services of the company and  Certificate of “No Objection” Ref. No. BPP / RPT/ 18/ VOL 1/095 in the sum of N40,219,769.20 was obtained.  Payment to the Consultant is yet to be made. Certain media publications that $8.8 million was expended at the Farnborough Airshow is unfounded, malicious, misleading, mischievous and baseless.

 

“The Transaction Advisers for National Carrier coordinated the campaign and provided the additional services that included the development of the brand strategy and the media activities relating to the unveiling of the Airline. 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 N50,893,000.00. Payment for these services is yet to be made. No foreign company was paid $600,000 for the design of the logo as speculated”, he said.

 

Sirika explained that the estimated funding requirement for the establishment of the project is $300 million up to 2020 while initial start–up capital of $55million made up of $25 million for deposit for new aircraft and $30 million for working capital from June to December 2018 was estimated.

 

“Estimated working capital for 2019 is $100 million, estimated working capital for 2020  of $145 million was 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, among others have indicated interest in the project”, he disclosed.

 

Sirika, who disclosed that the aircraft manufacturers after series of meeting with them were ready to give 30 aircraft, 15 for start-up while 15 would be delivered afterwards, noted that, ‘we could have gone ahead with the project but needed viability funding, the manufacturers needed guarantee of investment and these was an issue on the board of the US-Exim bank which was ready to give the money, we needed to settle all these’.

 

“The Outline Business Case Report was reviewed and Certificate of Compliance issued by the Infrastructure Concession and Regulatory Commission with the following conditions: Commitment to leverage private sector capital and expertise towards the establishment of the national carrier through the provision of an upfront grant / Viability Gap Funding, Zero contribution of Government  to Airline Management Decisions, No step-in rights and  zero management control by Government”.

 

He revealed further that the Nigeria Air Limited was incorporated by the Corporate Affairs Commission and a domain name was reserved for the Airline (www.flynigeriaair.ng)

 

“Discussions were held with major aircraft manufacturers who were committed to sourcing very good lease aircraft for the take-off of the Airline pending the new aircraft. There were discussions with partner airlines as well as financial institutions and the Request for Qualification, Information Memorandum and Request for Proposal were being fine-tuned for publication”, he added.

 

While justifying the need for the national carrier, he 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 .

 

He said that only 28 out of Nigeria’s Bilateral Air Services Agreements (BASAs) with 83 countries are active, adding that with the national carrier, Nigeria will be able to reciprocate the routes.

 

He said the establishment of the carrier will give impetus to the emergence of Nigeria as hub for the West and Central Africa and promote reliable air transport services, apart from competing with foreign airlines for a share of international routes through competitive pricing thereby reducing capital flight, among others.

 

x

Check Also

Zimbabwe To Sell Off National Airline Over $300m Debt

  Posted by Sade Williams   The administrators of national airline Air Zimbabwe, have invited ...