T he former minister of Aviation, Hadi Sirika, towards the end of his administration as minister, unveiled one of the Ethiopian Airlines registered aircraft, Boeing B737-800, displayed as Nigeria Air’s first aircraft at the Nnamdi Azikiwe International Airport, Abuja, which he said was a sample of what Nigeria Air will look like.
This generated a lot of controversies and discussions and has even threatened the establishment of a national carrier in Nigeria.
There were also widespread allegations of secrecy and noncompliance with rules guiding the execution of public-private partnerships of the Nigeria Air.
According to reports, the Boeing 737-800 plane used for that exercise reportedly belonged to Ethiopian Airlines with registration number ET-APL and not Nigeria Air as erroneously projected to Nigerians and the outside world. Curiously, the same plane returned with passengers to Addis Ababa the following day as scheduled Ethiopian Airlines service with the call sign ET 938.
Besides that entire processes that underlined the floating of Nigeria Air with a rented aircraft from Ethiopian Airlines were shrouded in secrecy, airline operators, known as Airline Operators of Nigeria (AON), have criticised the clandestine plan to float a national carrier in clear breach of extant aviation rules and regulations.
The former chairman of the committee, Sen. Biodun Olujimi, while speaking at the public hearing, said it was unfortunate that the former minister of Aviation failed to involve the committee and other stakeholders in the Air Nigeria project.
Olujimi said “To state the obvious, he failed to carry members of the Committee along in virtually all ramifications despite the degree of respect members accorded him any time he was invited for meetings.”
Also, a member of AON and president/CEO of Top Brass Aviation Limited, Captain Roland Iyayi, said in one of the national television programmes that the process of establishing the national carrier was not transparent.
He said, “Essentially what we have gone to court to say is that the entire process, the bidding, the selection and whatever it is we have today was not transparent. Again, we went on to say that most of the things that have been alluded to, we actually have proof to indicate that these are things that run counter to the provisions of the Infrastructure Concession Regulatory Commission (ICRC), law for the country.
“We have asked the court to simply interpret our position and see if indeed we are correct. If we are correct, it means the entire process is wrong. Now, the minister approached the public and said that five per cent of this entity will be held by the Nigerian Sovereign Wealth Fund. They came out within minutes and said they are not part of it. Then again, the minister said 46 per cent will be held by Nigerian institutional investors. So far, we have MRS, SAHCO and the supposed Nigerian institutional investors.”
But in a memo to the national assembly by the director general of the ICRC, Michael Ohiani, the regulatory agency stated that all due processes were followed and relevant approvals got by the ministry of Aviation.
In the memo, the ICRC, which is leading the negotiations for the deal, stated that Ethiopian Airline has 49 per cent; MRS Oil and Gas Limited, 15 per cent; SAHCO, 15 per cent; federal government, five per cent while 16 per cent had yet to be allotted.
The ICRC memo also indicated that the proposal was turned down five times by the Federal Executive Council under the Buhari administration before it was eventually approved the sixth time.
The ICRC gave details of the deal, stating that “The national carrier project was initiated by the ministry of Transportation in 2016 as part of the Aviation Sector Roadmap, which was approved by the then president, Muhammadu Buhari. The project was structured to be implemented as a public-private partnership initiative, for which the Infrastructure Concession Regulatory Commission’s regulatory guidance was sought.
“The ICRC provided the required guidance for the implementation of the project in line with the requirements of the ICRC Establishment Act 2005 and the National Policy on PPPS. Following the guidance provided, the following milestones were achieved:
‘Constitution of project steering committee and a project delivery team to guide the implementation of the project. Appointment of a Transaction Adviser – this was done in compliance with the Bureau of Public Procurement Act. Lufthansa Technik was first procured but later changed to Airline Management Group/Traniero after obtaining FEC approval. Development and submission of an Outline Business Case by the Airline Management Group in 2018.
“The structure involved the federal government of Nigeria holding five per cent equity, while the remaining 95 per cent is held by private partners (the foreign partner who is required to have undertaken at least, 10 years scheduled international operations) will hold a maximum of 49 per cent, while the Nigerian partners hold a minimum of 46 per cent.”
Speaking on the reason why FEC rejected the proposal five times, the ICRC noted, “It is important to note that the OBC was presented to FEC six times before it was approved. This was due to the insistence by FEC that the federal government will not contribute any funds to the take-off of the airline as was initially structured. FEC requested that the project should be fully privately financed since it is viable and bankable,” Ohiani noted.
The ICRC said after 10 weeks of advertisement, only the Ethiopian Airlines consortium submitted a bid and that the project proceeded to the negotiation stage, based on Section 5 (a) of the ICRC establishment Act 2005, which states that if after advertisement in accordance with Section 4 of this Act, only one contractor or project proponent applied or submits a bid or proposal, or only one contractor or project proponent meets the prequalification requirements, the ministry, agency, corporation, body may undertake direct negotiation without competitive bidding for any contract to be entered into, pursuant to Section 1 of the Act.
On the next step, the ICRC memo added, it is remaining the “Full Business Case to be prepared and submitted to the ICRC for review and issuance of certificate; presentation to the Federal Executive Council for approval; vetting of draft PPP agreement by Ministry of Justice; and contract execution” the report concluded
