On the financial implications, he said the estimated funding requirement for the establishment of the
project is $300m spread between 2018 and 2020. He added that the expected initial start–up capital of $55m comprises $25m for deposit for new aircraft and $30m for working capital from June to December 2018, while the estimated working capital for 2019 is $100m and $145m for 2020 to be provided by the Strategic Equity Partners who are expected to manage the project.
The Nigeria Air project will gulp an estimated $300million between now and 2020, Hadi Sirika, Minister of State for Aviation, revealed on Thursday.
According to NAN, Sirika made the revelation in Abuja while speaking at the Fifth Aviation Stakeholders’ Forum.
He said the Nigeria Air project is currently at the procurement stage, awaiting the approval of the Federal Executive Council.
Sirika also discredited claims that the government spent $600,000 on the design of the logo after the carrier was unveiled at the Farnborough Airshow in London in July.
“In recent months, misinformation, factual errors, insinuations and fabrications have been peddled in both social and print media on the Nigeria Air project,” he said.
“These include desirability, inadequate planning, non-consultation with stakeholders, lack of transparency and publications of fictitious amounts allegedly spent by the government on the project, among others.”
Sirika explained that the current effort to establish the national carrier predated the composition of the present FEC and even his own appointment as a Minister.
“Mr. President directed the then Ministry of Aviation to commence the process for the establishment of a national carrier during the ministerial briefing on the aviation sector,” he continued.
“The ministry set up a committee, which came up with the modalities for the establishment of a national carrier.
“The committee, in its report submitted in September 2015, recommended a private sector-led national carrier with 10 per cent government ownership and non-involvement of government in the management of the airline, but the provision of enabling environment for its operation.”
The Minister said that following approval by the FEC, a consortium of Transaction Advisers comprising Airline Management Group Ltd., Avia Solutions Ltd and Tianaero FZE, was appointed in line with best practices.
He said the TAs completed the Outline Business Case Report, which was reviewed by the Infrastructure Concession Regulatory Commission, which subsequently issued the OBC Certificate of Compliance.
He added that the report has been presented to FEC for consideration to move to the procurement phase and then Full Business Case, where it will be opened for bidding by investors, including ordinary Nigerians.
On the financial implications, he said the estimated funding requirement for the establishment of the project is $300m spread between 2018 and 2020.
He added that the expected initial start–up capital of $55m comprises $25m for deposit for new aircraft and $30m for working capital from June to December 2018, while the estimated working capital for 2019 is $100m and $145m for 2020 to be provided by the Strategic Equity Partners who are expected to manage the project.
“Certain media publications that $8.8m was expended at the Farnborough Air show are unfounded, malicious, misleading, mischievous and baseless,” he said.
“The TAs 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 payment of N50.8m for these services is yet to be made. No foreign company was paid $600,000 for the design of the logo as speculated.”
Sirika maintained that the Nigeria Air project does not lack investors, as institutions and airlines such as the African Development Bank, AFREXIM, US-EXIM, Standard Chartered Bank, Boeing, Airbus and China-Exim Bank, had already expressed interest.