Why FEC rejected Nigeria Air proposal five times – ICPC

Why FEC rejected Nigeria Air proposal five times – ICPC 

 

Proposal for the take-off of a new national carrier, Nigeria Air, was rejected five times by the Federal Executive Council, the Infrastructure Concession Regulatory Commission (ICRC) has said.

The commission, which is leading negotiations for the deal, said this in a new memo, according to a report by the Nation.

Newstrends reports ex-Aviation minister Hadi Sirika has been heavily criticised by his efforts to launch the Nigeria Air in the twilight of the administration of former President, Muhammadu Buhari.

Sirika had packaged an Ethiopian Airlines plane to land in Abuja as Nigeria Air’s inaugural flight amidst a court case.

The ICRC in the memo to the National Assembly explained that five times FEC turned down the Outline Business Case of the proposed airline before it was approved the sixth time.

It stated, “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’s viable and bankable.”

The commission said Ethiopian Airline has 49 per cent; MRS Oil and Gas, 15 per cent; SAHCO, 15 per cent; Federal Government, five per cent while 16 per cent was yet to be allotted.

The project was initiated by Ministry of Transportation in 2016 as part of Aviation Sector Roadmap, and approved by the former President.

It was to be implemented as a public-private partnership, for which ICRC’s regulatory guidance was sought.

The ICRC provided the required guidance for implementation in line with requirements of the ICRC Establishment Act 2005 and National Policy on the PPPS.

The ICRC said its Certificate of Compliance to the OBC confirmed the viability and creditworthiness of the project.

The commission also 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.

On the reason why the documents were yet to be signed, the memo stated, “Several preparatory meetings were held as a prelude to negotiations between the Ministry of Aviation and other government stakeholders before engaging with the Ethiopian Airlines Consortium.

“The commission thereafter requested the implementation of the following before negotiations: the consortium to be a Special Purpose Vehicle; consortium to sign a shareholders’ agreement/updated consortium agreement; the 16 per cent unallotted shares to be fully allotted in compliance with CAMA 2022 and transparency principles; and project to adhere fully to the requirements of the request for proposal document.”

The memo indicated that the next step was for all shareholders to sign the shareholders’ agreement and that negotiation should resume and be concluded once the court order was lifted.