Aviation

Nigeria Air: Due Process was Followed – ICRC

Published

1 year ago

June 19, 2023

• Says Process was midwifed by the Commission
…
By Victor Iko-Ojo

Against the backdrop of widespread allegations of wrong doings and noncompliance with rules guiding the execution of public-private partnerships regarding the establishment of Nigeria’s national carrier, the Infrastructure Concession Regulatory Commission (ICRC) has absolved the former minister of Aviation, Senator Hadi Sirika and the Ministry of any wrong doing in the establishment of the national carrier, Nigeria Air.

According to a report in the Punch newspaper of 18th June, 2023, the Commission, in a recent memo to the national assembly asserted that all due processes were followed and relevant approvals got by the Ministry of Aviation.

Quoting extensively from the said memo, the report indicated that the commission, 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 report stated as follows:
“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, “The national carrier project was initiated by the Ministry of Transportation in 2016 as part of the Aviation Sector Roadmap, which was approved by Mr 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 Ieast 10 years scheduled international operations) will hold a maximum of 49 per cent, while the Nigerian partners hold a minimum of 46 per cent.”

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

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’s 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.

The section 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 reason why the documents were yet to be signed, the memo noted, “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 negotiation was thereafter convened to discuss the issues highlighted for the consortium to implement but had to be suspended when it was observed that members of the consortium were working at cross-purposes.

This, it said, was based on the following observations/complaints by members; that the consortium had not agreed on their structure and function; some members were not privy to the documents under consideration; the consortium had not met on their own and had informed the meeting that the TA to the ministry had been the one calling for all their meetings and guiding their interactions.

It continued, “The consortium was thereafter requested to meet and resolve all their issues and present a common position for the purpose of negotiations and executing the PPP agreement with the government. They were unable to resolve their issues and sign the shareholder’s agreement as requested.

“This led to a letter of complaint from SAHCO expressing its concerns and not accepting the shareholders’ agreement as presented. Ethiopian Airlines responded with justification for the issues raised. Efforts to mediate through physical meetings and correspondences towards ensuring the signing of the shareholders’ agreement are ongoing.

“A meeting of the government representatives was thereafter convened at the ICRC to harmonise the position of the government before engaging in any discussion with the private proponent.”

It said the meeting agreed that every member of the consortium would be required to sign the PPP agreement individually as well as the shareholders’ agreement.

It added that the meeting further agreed that the 16 per cent unallotted shares must be fully allotted; that the project must have duration to comply with the requirements of the ICRC Establishment Act and that all clauses that allocate financing and regulatory risk to the government must be reviewed and adjusted appropriately.

The ICRC said it wrote a regulatory position to all members of the consortium on April 17, 2023, with a review and highlighted issues that needed to be addressed and corrected before the shareholders’ agreement could be signed.

According to the commission, some of the issues included that the Ministry of Finance Incorporated to hold the five per cent Federal Government’s equity and sign the shareholders’ agreement on behalf of the government; full allotment of the 16 per cent unallotted shares in the consortium recognition and valuation of the Bilateral Air Services Agreements as part of Federal Government’s contribution to the project; provide clarity on the status of local airlines currently operating regional and international routes, in view of request for total rights over all the existing BASAs; and “the deletion of the clause that waives sovereign immunity by Nigeria.”

The ICRC added that the ministry convened a negotiation meeting on April 18 and 19, 2023, at the ministry “but could not proceed as representative of the Federal Ministry of Justice cited a court order restraining any action on the project.”

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.

On the next step, the ICRC memo added, “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.

Findings have however revealed that this final step will not be necessary, as an anticipatory approval had already been given by former President Mohammadu Buhari before he handed over to current President, Bola Ahmed Tinubu.

Reacting to the report, a labour leader in the aviation sector said he had followed the process of the Nigeria Air project from the beginning and was convinced that the right things were being done but had faced a lot of sabotage by people who, for reasons known to them, want to ensure that Nigeria Air does not see the light of day.

The union leader who preferred not to be named because of the sensitive nature of the issue, said the ICRC memo had proved the former Minister’s position right that the process leading to the establishment of the national carrier has been transparent in all ramifications.

Recall that the former Minister of Aviation, Senator Hadi Sirika was recently on a television programme to dispel what he described as unfounded insinuations that the national carrier project was meant to stifle the domestic airlines.

According to him, the real fear of some of the domestic operators was that Nigeria Air will provide Nigerians with a veritable option in terms of ticket prices and destinations.

The former minister also cleared the air on how much has gone into the establishment of the national airline, saying that a total of less than N3billion had been spent as at the time of his leaving office.

Aviation

Hard Time Awaits Airport Rule Breakers, with Establishment of Magistrate Courts

Published

2 months ago

August 18, 2024

Sunrise Nigeria

The Managing Director, Federal Airports Authority of Nigeria (FAAN) Mrs Olubunmni kuku has announced plans to establish magistrate courts in airport premises across the country to swiftly address violations of airport rules and anti-touting regulations.

The move is aimed at ensuring a safer and more comfortable environment for genuine airport users.

The MD FAAN, made the announcement during a meeting with heads of security agencies at the Nnamdi Azikiwe International Airport (NAIA) in Abuja.

The meeting was convened to brief airport stakeholders on recent developments, outline the authority’s strategic goals, and discuss ways to enhance passenger experience and facilitation.

Mrs. Kuku identified the presence of touts and loitering by members of the public as a major challenge to providing a comfortable experience for genuine airport users.

“There are people who have absolutely no business being at the airport, and they continue to create issues for us,” she said.

“We have an anti-touting taskforce, and as it is, we are going to start the prosecution onsite of those engaging in these illicit activities or loitering around the airport environment and harassing passengers. This doesn’t happen elsewhere around the world, and the airport should be a safe space.”

The MD/CE also addressed the issue of car hire operators violating processes and protocol, warning that such behavior would no longer be tolerated.

She emphasized the need to reduce manual baggage search at the international wing of the airport, proposing a process where baggage would be screened by machines, and security officials would view the contents in real-time, only pulling aside luggage that requires secondary screening.

Mrs Kuku said, “We have to streamline our efforts. We need to improve processes at the airport. This is the 21st century, and we must keep up with the times”.

She also announced that the Terminal C of the NAIA would be ready for use by December 2024, with plans to develop more international routes to take advantage of the underutilized International Terminal.

NAIA Military Airport Commander, Air Force Group Captain Abbas Hashim, thanked the MD/CE for convening the meeting and called for more regular meetings and better cooperation between the agencies and FAAN.

Aviation

Nick Fadugba: The Passing of an Aviation Colossus

Published

2 months ago

August 15, 2024

Sunrise Nigeria

By James Aduku

The African aviation community is in mourning, following the death of the Founder/Chief Executive Officer of African Aviation Services, Nick Fadugba on Saturday week.

The death of the aviation impresario who has been variously described as gentle, humble, highly professional and public-spirited, was announced by African Aviation Services.

“It is with great sadness we announce that Nick Fadugba, Founder and Chief Executive Officer of African Aviation, recently died. The entire African Aviation family mourns his loss. On behalf of the whole Team, we extend our deepest sympathies to Nick’s family”.

Nick Fadugba established African Aviation Services (AAS) in 1990 with the pan-African vision of promoting aviation development throughout Africa. He believed that aviation could be a vital catalyst for Africa’s economic and social transformation. Since 1988, he provided a wide range of consultancy and advisory services to international aviation, finance and leasing organisations and to African Governments. He was also instrumental in fostering business relations between Africa and the international aviation community in critical areas such as Aviation Finance, Aircraft Leasing, Aircraft Maintenance, Air Safety and Aviation Training.

Nick had unique experience in aviation finance and aircraft leasing negotiation, arbitration and dispute resolution in Africa. Other areas of speciality included developing airline business plans; fleet planning; aircraft leasing and finance advisory services; airline route network development; market information research and analysis; reconciliation of aircraft leasing / finance accounts and debt recovery; negotiating acquisition of airport slots and air traffic rights; and establishing London Heathrow Airport operations for foreign airlines.

He was appointed an Interim Non-Executive Director to the Board of South African Airways on 9th December, 2020, and acted as Chairperson of SAA Technical until April, 2023. He was elected Chairman of the African Business Aviation Association (AfBAA) in May, 2018, handing over the Chairmanship last year. He was a former elected Secretary General of the African Airlines Association (AFRAA); a Launch Member of the African Business Aviation Association (AfBAA) and Vice Chairman of its Safety and Training Committee; was Chief Advisor to the Association of African Aviation Training Organisations (AATO); a Fellow of the Royal Aeronautical Society (RAes), UK; a member of the Aviation Club of the UK; a member of the German Aviation Research Society (GARS); the European Aviation Club; the Institute of Directors (IOD), UK; the International Society of Transport Aircraft Trading (ISTAT), USA; a Volunteer for Airlink, the international aviation charity, and a member of the ISTAT Scholarship Program for African Students. In 2021, he was elected as a member of the Board of Trustees of the International Society of Transport Aircraft Trading Foundation (ISTAT Foundation) which was founded in 1994 to support individuals and institutions that promote the advancement of commercial aviation and humanitarianism. He worked on the ISTAT Foundation’s Grants Committee which manages fundraising and programming that meets the Foundation’s objectives. Nick helped pioneer international aviation conferences focusing on aviation finance, leasing, aircraft maintenance and aviation training, specifically tailored for Africa, providing a unique forum for African and international airlines, airports, aviation, finance and leasing organisations, industry regulators and Government officials to discuss key commercial, financial and regulatory issues affecting the African aviation industry and to seek practical solutions through mutually-beneficial co-operation. In 1990, he also helped pioneer aviation publishing in Africa with the launch of AFRICAN AVIATION, Africa’s Aviation Industry Journal, to promote the African aviation industry globally. For over 30 years Nick organised the Air Finance Africa Conference, the MRO Africa Conference, as well as other aviation events.

Background:

• Co-Chaired first ‘Air Finance’ Conference in Tokyo, Japan, in 1988 for Aircraft Lessors & Financiers.

• Co-Chaired European Air Transport Conference in London, in 1988, with UK Minister of Transport.

• Appointed by the Federal High Court of Nigeria as a Member of the Committee of Inspection in the Liquidation of Nigeria Airways (2004).

• Appointed Communication Adviser to the Secretary General, African Airlines Association (AFRAA) in 2002 with a mandate to further contribute to revamp and polish the image of the Association internationally.

• Invited as a Speaker or Moderator at numerous International Aviation Conferences organised by major bodies, including ICAO, IATA, ACI, AFRAA, AFCAC, US FAA, US NTSB, National Civil Aviation Authorities, GE Aviation and Embraer.

• Africa representative, Governing Board, International Business Aviation Council (IBAC), Montreal, Canada, an ICAO affiliate.

Nick has an MSc (Distinction), in Air Transport Planning & Management from the University of Westminster, London, UK and was the MSc Dissertation Prize Winner. He also held a Post-Graduate Diploma, Air Transport Management from Cranfield University, UK and a BSc (Honours) in Mass Communication from the University of Lagos, Nigeria. He attended Airport Economics and Finance Courses at the University of Westminster, London, UK as well as Regional and Low Cost Air Transport Courses, University of Westminster, London, UK. He also attended Boeing Leadership Seminars, Boeing Learning Center, USA.

Awards:

• In 2000, he was presented with a Plaque by the USA National Transportation Safety Board (NTSB) for ‘Outstanding Contribution and Service to Aviation Safety.’

• In December, 2003, he was presented with an Award by the African Airlines Association (AFRAA) for “Outstanding Contribution to the African Aviation Industry” presented by then Head of State of Libya, Col. Muammar Gadaffi.

• In 2018, he was presented with an Award by the Aviation Round Table (ART), Nigeria, for “Invaluable Support and Contribution to the Upliftment of Aviation Safety in Africa, particularly in Nigeria.”

• In 2023, Nick was presented with a Certificate of Recognition for his “Extraordinary service and dedication to AATO” from the Association of African Aviation Training Organisations (AATO).

Aviation

Nigeria’s ICAO Rep, Ben-Tukur Elected Chairperson of AFI Plan

Published

3 months ago

July 16, 2024

Sunrise Nigeria

By Elizabeth Okwe

Nigeria’s permanent representative at the International Civil Aviation Organisation (ICAO), Engineer Mahmoud Sani Ben-Tukur, has been elected as Chairperson of the ICAO AFI Plan today at the 27th steering committee meeting during the 9th AFI Aviation Week in Libreville. This follows his recent elevation to 1st Vice President during the 230th ICAO Council meeting, marking a significant progression in his career.

The ICAO comprehensive Regional Implementation Plan for Aviation Safety in Africa (AFI Plan) enhances aviation safety across the African continent. It aims to coordinate and implement regional initiatives and standards set by ICAO. The AFI Plan focuses on improving safety oversight, regulatory frameworks, infrastructure development, and capacity building within African aviation authorities and organizations. It serves as a collaborative effort among African states to harmonize and elevate aviation safety standards to international levels, ensuring safer skies and facilitating sustainable growth in the aviation sector across Africa.

Ben Tukur’s election add this responsibility to him. A Fellow of the Nigerian Society of Engineers and a member of RAeS and IET in the UK, Engineer Tukur brings 28 years of extensive aviation experience to his new role, gained through roles such as aircraft maintenance engineer, instructor, and aviation safety inspector in both government and private sectors.

Having served as General Manager (Airworthiness Standards) at the Nigeria Civil Aviation Authority Technical Adviser to a former Minister of Aviation, and in coordination roles at organizations like NCAA and Aerocontractors Airlines, Tukur’s regulatory expertise is robust and well-regarded.