Aviation
Nigeria Air: Due Process was Followed – ICRC
• 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.
Minister of Aviation, Mr. Festus Keyamo has sought the support of the international aviation regulatory body the International Civil Aviation Organisation (ICAO) on the comprehensive civil aviation master plan and airport development of the country.
The Minister made the disclosure when he paid a familiarisation visit to the ICAO Headquarters in Montreal Canada.
Keyamo with the ICAO Council President, Mr. Salvatore Sciacchitano, the Secretary-General, Mr. Juan Carlos Salazar, and Nigeria’s Representative on the ICAO Council
The minister on behalf of the continent of Africa also mentioned the important role of air connectivity which he said ICAO should continue its support on the actualisation of other safety development-related matters.
Keyamo, accompanied by the Director General, Nigerian Civil Aviation Authority, Captain Musa Nuhu, Nigeria’s Representative on the ICAO Council, Engr Mahmoud Sani Ben-Tukur, and other officials during a courtesy call on the ICAO Council President, Mr Salvatore Sciacchitano
On hand to receive the minister was the ICAO Council President, Mr. Salvatore Sciacchitano, the Secretary-General, Mr. Juan Carlos Salazar, and Nigeria’s Representative on the ICAO Council, Engr. Ben Tukur; while the Director General of the Nigeria Civil Aviation Authority (NCAA), Capt. Musa Nuhu accompanied the minister on the visit.
It is however not clear how ICAO intends to assist Africa in air connectivity considering the fact that not all of the countries in Africa are signatories to the Single Africa Air Transport Market (SAATM).
Owing to the poor state of road, and rail networks and fragmented transportation infrastructure across Africa, travelling by air stands out as a quick alternative and efficient means of connectivity.
Unfortunately, Africa’s air services are poorly connected, often necessitating multi-day journeys or flights via other continents to reach destinations within Africa. To address the bottlenecks, the African Union (AU) launched the Single African Air Transport Market (SAATM) in 2018 to create a single African air transport market that promotes economic integration and air connectivity.
Sadly, its slow implementation stifles liberalisation of air transport markets in Africa. Only 34 out of 54 African countries have signed up to the SAATM.
SAATM and AfCFTA according to experts are growth drivers, with liberalised air transport playing a pivotal role in paving the way for African airlines to operate scheduled flights with ease within the continent.
AfCFTA they said could boost air cargo from 2.3 to 4.5 million tonnes, with the AfCFTA requiring 254 aircraft by 2030.
SAATM and AfCFTA are interlinked, with SAATM boosting intra-African airline connectivity, while AfCFTA enhances regional integration, trade, resources, capital, and passengers within Africa. An open passenger travel will enhance AfCFTA implementation.
Africa has the lowest air connectivity in the world. Among the 1,431 pairs of African Union countries, just 19% had significant direct service (at least once a week annually). Out of these, 35% had daily or more frequent service, while only 13% had service twice daily or more.
The Yamoussoukro Decision was adopted in 1999 to rule out stringent regulatory restrictions within Bilateral Air Service Agreements (BASAs) among African countries which are detrimental to intra-African connectivity and the development of the African aviation sector. SAATM evolved from the Yamoussoukro Decision thereby eliminating BASAs.
In most African nations, African airlines encounter hurdles like restrictive agreements, high taxes, expensive fuel, and visa restrictions which limit growth and profitability.
Some African countries that have endorsed the SAATM treaty haven’t adhered completely to its regulations, resorting to high landing fees and other charges to discourage other African airlines from operating within their airspace. This isn’t unconnected to the high flight tariffs in Africa.
Abuja airport followed by Lagos airport is adjudged as the most expensive airport in Africa, their exorbitant charges are impediments to Nigerian airlines’ competitiveness globally. 32 out of 53 African airports impose fees exceeding $50 per traveler, and 10 airports charge above $100. In comparison, European passengers are billed an average of $30.23, and in the Middle East, the average is $29.65.
West African return tickets remain excessively expensive compared to Europe where 100 euros can cover travels. Air travel in Africa is costly, time-consuming with long stopovers, and hampers socioeconomic growth.
Source: woleshadare.net
The Director General , Nigerian Safety Investigation Bureau(NSIB), Engr. Akin Olateru has been honoured with the ‘Integrity and Anti-corruption Ambassador’ award by the Nigerian youth against Corruption and Transparency Initiative in recognition of the transformation and developmental strides the Bureau has witnessed under his leadership.
This is according to a statement by Mohammed Farouk Yakub on behalf of the Director, Public Affairs and Consumer Protection of the Bureau.
Presenting the Award at the Bureau’s Headquarters, in Abuja on Wednesday, Group Coordinator, Engr. Abdul Malik Usman, said members of the Group decided to confer the award on the Bureau’s Director General in recognition of his contributions to the development of the nation’s aviation safety through rapid transformation of the Bureau to emerge as one of the best accident investigating bodies in the world.
“Our Organisation is very proud of the transformation and developmental strides in the Nigerian Safety Investigation Bureau( NSIB) which cannot be overemphasised. Your unrelenting dedication to a corruption-free society, contribution to nation building, among others, called for appreciation and recognition and to this end, we decided to honour you with this award, he stated.
Receiving the award, Engr. Olateru appreciated members of the organisation for recognising his modest contributions to aviation safety through the Investigation of occurrences and timely release of reports along safety recommendations which he described as the by product of the investigation usually addressed to industry stakeholders such as, the Nigerian Civil Aviation Authority, (NCAA), the affected airlines, Air craft Manufacturers, among others, to prevent the reoccurrence of the incident.
The Bureau established in 2006 according to him, and had done its best under his leadership since 2017 when he became its head in the fulfilment of its mandate to probe into air accidents / incidents and timely release of reports for a safer airspace in Nigeria and beyond.
He informed the organisation that the government, in recognition of the roles played by the Bureau, signed into law the NSIB Act 2022 for the expansion of its mandate and scope as a multi-modal agency to investigate not just air accidents and incidents , but maritime, railway and any other modes of transportation across the country.
“And that has put Nigeria at par with countries like United States of America, Canada, Australia, Hong Kong, among others , to have a single agency doing all the investigations,” he stated.
Engr Akin Olateru with the NSIB Management after the award
Explaining further, Engr Olateru said the reason behind this, is to ensure transparency and objectivity in the investigation of occurrences.
“There are 3 legs to any transportation system. You have the service providers, you have the regulators, and then, the Investigators. During occurrences, sometimes it could be the regulators that might have caused the reason for the occurrence. That is why you can’t be regulator and the Investigator all together”.
He recalled between 2003 to 2005 during which period Nigeria had such situations which led to numerous air crashes in the country.
“Nigeria used to have this arrangement, but the wisdom of government to separate regulatory from investigating responsibilities has not just improved air safety, it has also enabled air transport business to dramatically rised in Nigeria .
“Gone are the days when people hesitated boarding an aircraft” he stressed further, saying in the past people would rather travel by road instead of aeroplanes for safety considerations.
“Today, this is not so as the conscious efforts that had been put in place by the Bureau in collaboration with other relevant agencies which have ensured a safer airspace for the flying public.
“Safety is not achieved by accident. It is not something that just happened at ago. Conscious efforts had gone into it . For a safer airspace to have been in place , the regulatory body, the investigating agency and other industry stakeholders must have contributed their bits to the overall safety networks”.
Olateru assured of the Bureau’s continuous prompt response to occurrences and timely release of its reports along with right safety recommendations to deal with the reason why that particular occurrence happened. This, he said, is the only way the agency can continue to protect the system from reoccurrence.
He noted that the Agency under his leadership enhances air safety from the rear which explained his delight for been spotted and honoured with the award.
“We enhance safety from the rear. And that is why am so happy that you spotted us. I really want to thank you for this initiative and for giving us the encouragement to do more, “ he added.
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