The federal government has announced that the entire process of branding and unveiling of the suspended national carrier project, Nigeria Air, in London cost about N50,893,000.
The Minister of State for Aviation, Hadi Sirika, disclosed this while speaking at the 5th Aviation Stakeholders’ Forum on Thursday in Abuja.
Sirika also dismissed insinuations that the process for the establishment of the national carrier was suspended due to lack of investors.
“There was fake news that we suspended the process because there was no investor. That is not true,” he said.
The aviation minister however noted that the Nigeria Air was suspended because the first Transaction Adviser, Lufthansa, that was to spell out the ownership model in the privatisation and shareholding process, did not complete the process.
He pointed out that Lufthansa was replaced due to its outrageous demands which included opening an escrow account, refusal to pay tax and demand for 75 percent upfront payment.
The minister also added that the federal government was unable to provide a sovereign guarantee for the procurement of 30 aircraft estimated at $300 million in a staggered payment till 2020.
Sirika explained that several international bodies have shown interest to invest in the Nigeria Air project.
“Already, Islamic Development Bank (IDB), Africa Development Bank (AfDB), the African Export-Import (AFREXIM) Bank, the Export–Import Bank of the United States (US-EXIM), Standard Chartered Bank, Boeing, Airbus, COMAC/CCECC, BOAD, China-Exim, Qatar Airways, Ethiopian Airlines, Deutche Infrastructure Finance, all of them, including the governments of France and US, have written us to say they are committed to this project, that they want to donate and partner.
“And you know why? It is because they want to export their markets. They want to sell their aircraft. And this is because we don’t have and we can’t produce aircraft. So their (US and France) governments have the responsibility to promote their businesses and that is why they wrote to us that they want to partner. So we have investors,” the minister explained.
Breaking down the $300 million estimate for the project till 2020, Sirika said an initial start-up capital of $55 million made up of $25 million will be made for the deposit for new aircraft and $30 million for working capital from June to December 2018.
“Estimated working capital for 2019 is $100 million. Estimated working capital for 2020 of $145 million to be provided by the strategic equity partners who are expected to manage the project,” Sirika said.
The name and logo of the Nigeria Air project was officially unveiled on July 18 at the Farnborough International Public Airshow in London, United Kingdom.
Two months after the launch, the federal government however announced the suspension of the planned commencement of operations of the nation’s national carrier, which was expected to takeoff on December 24.
The suspension has since then generated heated debate among Nigerians on social media.