Costs of national carrier, others to hit N152bn
- It’ll lead to capital flight –Ex-Airways’ MD
The engagement of six foreign-based companies for the establishment of national airline, airports concession and aerotropolis, Maintenance Repair Overhaul (MRO) and cargo terminal could cost government over N152 billion, a former Managing Director of liquidated Nigeria Airways, Capt. Mohammed Joji, has said.
The six advisers are Lufthansa (now replaced by AMG), Avia Solution GE, Arrow for concessioning of airport and Aerotropolis, Infrata for maintenance repairs overhaul (MRO) and JEBB for cargo terminals.
Joji, in an open letter to Vice President, Yemi Osinbajo, – a copy of which was obtained by Woleshadarenews, expressed concerns over some grey areas of the planned floating of a new national carrier and the negative effects of engaging foreigners as advisers on the projects, while there are competent Nigerians that can competently handle the project.
He reiterated that as a concerned citizen, a responsible corporate organisation and a stakeholder in the industry, he was constrained to raise some issues regarding the appointment of foreigners as mere advisers and consultants in establishing a national carrier, when the country has enough and experienced professionals who are capable of performing even better than the “so-called foreign consultants with attendant loss of income and foreign exchange.”
Joji, who is the Managing Director of Skypower Express Airways, recalled that some of them started the issue of the national carrier as far back as 1993 when he was the Managing Director/Chief Executive of Nigerian Airways under the chairmanship of Prince Tony Momoh with the late Alhaji Gidado Idris as the Director General of the Ministry of Aviation.
His words: “I was a party to the incorporation of Air Nigeria, with an authorised share capital of $IOO million) (then N2 billion) midwifed by the Federal Ministry of Finance Incorporated (MOFI).”
However, after wide consultations with the people that are part and parcel within the company, he noted that the company was incorporated and issued with the Certificate of Incorporation, Certificate Non RC 219,299 dated 5th day of April, 1993.
He disclosed that the company, after incorporation, was well structured by the professionals to take off when it was frustrated due to no reasons.
Joji stated that although the idea of national carrier in today’s world could be a misplaced priority, with the concept of private driven economy to drive efficiency and competitiveness, with enabling business environment, capacity and capability to steer the industry in the right direction.
He stated that with the issue of multiple designations currently in practice, more than one airline can be designated to carry the national flag, which is the current practice worldwide.
“What is required is to grant the indigenous airlines the necessary concession to carry the flag and compete with their foreign counterparts. Sir, today, Nigeria is the largest market and a great market potential for all the African airlines,” he said.
“Do foreigners have to determine how to provide infrastructure in our airports? Do they have to advise us about concessioning of airport to leasing procedures?
“By the year 2050, Nigeria’s population will be 400 million, which makes us number three behind India and China. Are we planning for all these not only in aviation industry, but particularly in agriculture? You may wish to note that there is an innovation in place where aeroplanes are used for agricultural purposes. This innovation is now in practice at Olam Rice Farm in Rukubi, Doma Local Government of Nassarawa State.
The aircraft was assembled by Skypower Express Airways and was put in operation; as a result, the farm is now producing 40,000 tons of paddy rice annually.”
That government, having decided on local content policy with recently signed executive order, the issue of appointment of foreigners to advise and consult in setting up national carrier, to him, is a misplaced priority and waste of resources.
He opined that the foreign advisers appointed may not have the capability or the pedigree to give Nigeria a national carrier that will be a pride of everyone.
Joji equally stated that the appointment would lead to capital flight with attendant foreign exchange losses and consequent capital flights.
He insisted that Nigerian professionals, if engaged, will be further encouraged and developed, as they do not lack experience in this regard.
Minister of State for Aviation, Hadi Sirika, however, stated that government would have no hand in the new national carrier, stressing that it would be private sector driven, as three per cent equity is set aside by government as participation, which, in economic term, is a minority shareholder.
But Joji noted that this will have negative effect on the whole idea.
“It is therefore recommended that the three per cent proposed- government should hands-off and instead provide Sweat Equity by allowing capital market to raise the necessary funding. Government can then give the airline tax holidays and be treated as infant industry,” he advised.
“Same privilege should be extended to the existing private airlines who have been nursing the air transport sector for the past 14 years without any contribution from government.”
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