Private investors to raise $250m to start up National Carrier–Sirika

 

…FG to own only 5% shares

 

Posted by Sade Williams

 

A total of $250 million would be raised to start up a new National carrier by private investors, Aviation Minister, Hadi Sirika has said.

In a document detailing the status of Aviation Road Map, made available to Journalists, the Minister said the project development phase has been completed with the development of the Outline Business Case (OBC) and subsequent issuance compliance certificate by the Infrastructure Concession Regulatory Commission (ICRC).

“The next step which will involve the commencement of procurement phase is placement of Request for Qualification (RFQ) in local and international media. $250 million approximately is to be raised to start up the airline by private investors”, he said.

According to him, ‘the establishment of a national carrier will enable Nigeria gain optimal benefits from Bilateral Air Services Agreements, take full advantage if the Single African Air Transport Market (SAATM), introduce competition, leading to competitive fares and better services as well generate employments.

“The National carrier project will be private sector driven with government not holding more than 5 percent shares. The private sector consortium may comprise reputable international airlines such as Quantas, Leasing companies, Aircraft manufacturers, OEMs, financial and institutional investors.

“The government is providing the required support by enabling environment in terms of sustainable policies, allocation of BASA routes, provision of financial guarantees and ensuring fiscal incentives to sustain the success of the airline”, he added.

As for the establishment of Maintenance, Repair and Overhaul (MRO) Centre, Sirika explained in the document that the Ministry is at advanced stage in the procurement phase, adding that ‘a preferred partner has been selected, the next step I commencement and negotiation with the preferred partner and finalisation of Full Business Scale (FBS).

“The proposed independent MRO facility in Nigeria will serve the maintenance demands of airlines in West and Central Africa and also provide maintenance for national carrier and African leasing company. The MRO will be structured as a Build Operate and Transfer (BOT) model with government acting as both the grantor of the concession and facilitator of the project, while the private partner consortium will be responsible for designing, building, financing, operating and maintaining the proposed facility for an agreed concession period.

“The Consortium is expected to comprise of an Independent MRO company, Real Estate development company, Construction company, Financial and institutional investor. The proposed facility will have the capacity to serve both narrow- and wide-bodied aircraft maintenance requirements and will be located in Abuja, Nigeria”, he added.

Nigeria Air’s branding was announced at the Farnborough Air Show in the U.K. in 2018.

Nigeria Air is not the first attempt by the Nigerian government to run a national carrier.

Nigeria Airways, in which the government owned a majority stake, folded in 2003. Air Nigeria, a later iteration of Nigeria’s flag carrier set up with the government and Virgin Group, ceased its operations in 2012.

 

 

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