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Being the full test of Ex-Minister of Aviation, Hadi Sirika’s interview with Arise TV on his role in Nigeria Air’s alleged controversy monitored by Aviation Metric’s WOLE SHADARE
There are many Nigerians that are calling for your arrest and Nnolim Nnaji saying the Nigeria Air project is a personal project rather than a project designed in the national interest
I don’t think I am here to discuss the desirability of having a national carrier of the size of Nigeria’s economy, and population, I am here because I was once a public servant who has taken decisions on behalf of the people and it is only more right that there are accusations of fraud, corruption, secrecy and so on, being done in the right manner for me to come and explain to the public what has happened, to explain issues because I am accountable for my actions. I want you to ask me all the N85 billion that they said has been wasted, the aircraft came and flew out. These are questions Nigerians really want to know, Farnborough issue, who are the owners, shrouded in secrecy, whether it is a fraud according to Nnolim Nnaji. I would like to use this opportunity to answer Germaine questions.
Nigerians asked whether the airline is a flag carrier or a national carrier, a chartered flight carried by Ethiopian Airlines. The basic question is how is the unveiling?
Nigeria Air is a company known to Nigerian people, law called Nigeria Air Limited; the shareholders and the company and the structure of that company is such that five percent is held by the Federal Government in trust of the Ministry of Finance, there is 49 percent with equity partner which is Ethiopian Airlines, in this case, is also a ten percent by MRS and 15 percent by SAHCo. This is the structure of the airline. It is a company known to the law like Max Air and Air Peace are known to the law or Ibom.
It is good that you have talked about the shareholders in Nigeria Air and you have defined the percentages, SAHCO complained that they were not even invited to the unveiling. I would like to know, how was the unveiling on May 29th different from the unveiling in Farnborough.
There are two different phases. Remember that at the beginning of this exercise, the Federal Government of Nigeria had a business plan, and that business plan is such that there is going to be funding of $350 million by the government of Nigeria through the CBN which will be owned by the company but paid back to Nigeria. At that time, we did not have the name, colour, the logo of this airline. We started a social media campaign where 400, 000 people came to create the name, the logo, and the livery of the airline. Farnborough being an air show for the entire world came to where we would be needing aircraft from Boeing and Airbus that were all there. We went there and discussed with them and pick the best deal for the airline at that time when the government was driving it. We thought in that place after negotiating with would-be investors. We went offshore to discuss with OEMS and investors that would be partners like Ethiopian, like Lufthansa, and others. The campaign by 400, 000 would be embedded for the world to see that this is what is going to come. The government was driving it at that time. The business changed, the Outline Business Case (OBC) changed and now that the partners are in place, the purpose of going to Farnborough is not just to unveil to discuss with would-be partners But coming back home now, when Nigeria Air had its own shareholders, the bid was won by some people and as part of their strategy decided to unveil the airline to come into Nigeria and showcase what it would be, pending when the AOC is completed and begin to fly. The marketing strategy they did is their own, for the owners, Ethiopian Airlines, MRS, and others. The question from SAHCO was that they were not there; why should I be the one to answer? Their partners should answer. I was invited and I went there. I made a statement there. They asked me when I think this airline would fly, I said to them that it would fly as soon as they complete their AOC issue. If the government that we have now is not going to continue and I said if they are not going to continue, they only have five percent; 95 percent will continue because it is an airline known to the Nigerian law. SAHCO will decide what to do. They only have 15 percent and others will continue. If MRS said they do not want to continue, others will continue. I think it is very clear because they are in a partnership owned by them.
Those shareholders that you have mentioned, how much have they paid in as equity into Nigeria Air or they did not pay anything? Are they shareholders on paper?
The business plan had a $200 million plan as capital. They will pay equal to the shareholding they are holding. Now I know that they are doing the shareholding agreement, when they sign, they pay; of course, they cannot have shareholders on paper; no one does that. Everybody has to pay. Federal Government’s five percent will be in kind in services, rentals, etc. I remember Federal Government has been spending money on this project. All they have been doing will be quantified if it is equal to five percent and if it is more, they get their funds and if it is less, the services will be quantified and make up the five percent.
You said that the Federal Government has been spending money, how much has been spent so far, because many Nigerians are concerned that they have finished spending our money and we don’t have an explanation? Some people are alleging N30 billion, N85 billion, how much has been spent so far?
In 2016, 2017, 2018, 2019, 2020, 2021, 2022, and 2023, all the monies voted for the national carrier was N5 billion budgeted for but all that was released was in the neighbourhood of about N3 billion, not N35billion and we have not expended all of it as at the time I left office. What has been done with that money is nothing but transactional advisory service, the AOC processes, salaries, consulting services, and an office in Abuja. No contract was given by Hadi Sirika. These were things that were used for the money. There is the Freedom of Information Act, people can apply and get all the records. Secondly, it is in the imagination of Roland Iyayi and he said in the National Assembly that N85 billion was budgeted and spent and when they asked him, he said he got it from NBS. I think NBS should question where is the source, is it true that they have it on their records? I told you that the total amount of money from 2016-2023 is that N5 billion was released, and only about N3 billion was released. At the time I left, all the money had not been utilized and I told you what we used it for. The N85 billion is in the head of the person who said it.
You referred to AOC as one of the things you have to get that Capt. Dapo Olumide brought up when he was testifying in the House of Aviation committee. He said that the airline is at the first stage of AOC, it has not been concluded, what exactly is the truth?
I think what he meant at that time he was cut halfway. The stakeholder which is the key personnel of the airline, their contract expired on May 31. He said the contract of the people in this airline has expired. If they have changed all of them, they will go back to stage one; they did not change them. They only extended their contract. Since they have gone to the NCAA, they have been interviewed, as far as that is concerned, they have passed that level already. Immediately after the Ministry received it, they reappointed the same people. The AOC has gone past stage one. It is my belief that the documentation including 23 manuals has been sent to NCAA. They are not going back to stage one. They are continuing.
Capt Dapo Olumide said that the aircraft we saw on May 27 was a chartered aircraft. How much was paid for that chartered aircraft, who chartered the aircraft? We were told that the aircraft took some passengers, who took the benefits for that?
The AOC owned by Ethiopian Airlines they are permitted to come in as scheduled passenger, charter, or cargo. They came under one of the three. Charter does not mean that anybody can pay for it. To answer your question, the government did not pay a dime for the aircraft to come in. Secondly, there were no passengers going out. It was their own marketing strategy as partners. They came together to do a charter. Charter does not mean they paid for it. If anyone had paid for it, it would be Ethiopian Airlines. I heard that we spent N139 billion to paint the aircraft. How ridiculous can that be? People should be a bit more seriousN139 billion can buy five brand new 737s. How can we spend that and bring it in for a show? There is no iota of truth. People can take advantage of the Freedom of Information bill in place to get their facts and it will be given to them.
The AON has sought a court injunction to stop the airline. It would look like what was done on May 27th was a violation of a subsisting court order
I am very aware of that but what I am aware of also is that I remember that there was a court order and there was a motion to vacate that court order immediately with our counsels but I am not a court. I can’t determine here whether there was a contempt or not. I think I will leave that to the court, certainly, there is a motion in place to vacate that order.
Concerns of domestic airlines that Ethiopian Airlines is given an advantage to initially operate domestic routes, to enjoy tax holidays for 15 years and that your priority should have been to provide BASA opportunities in terms of frequencies.
There is a company called Nigeria Air shareholding just as Air Peace has announced. They have acquired 70% of Antigua National Airlines. The same way they have acquired 70% is the same way Ethiopian Airlines has acquired 49%. When it starts operations, it will fly. Nothing stops Max Air, Air Peace to go and buy shares in Lufthansa. Whether they should do operations locally, yes, they should because it is a Nigerian company and Nigerian law allows you to come and own 1005 a business and there is nothing wrong with that. In the initial Outline Business Case, there was an allowance that they should be given some tax incentives because, at that time, aviation became the fastest-growing sector of the economy. Ministry of Finance and National Planning though Nigeria can give tax incentives as pioneers and that would help us continue to participate and contribute to the GDP of Nigeria but that has since been removed. That was in the initial OBC. Currently, there is no tax holiday with Nigeria Air Limited but there are going operate within some economic zones that we have established and they will enjoy the taxes that everybody like Air Peace, Max Air, or Ibom are enjoying. We have assisted these airlines more than anybody had done. More than 50% of all the airlines today in Nigeria flying were licensed to fly during my tenure under the Buhari government. We have supported them in that direction and we have also supported them by removing taxes, customs duty, and VAT on aircraft and spares. That is unprecedented.
You promised that on the day of the unveiling, three aircraft would be on the ground for the purpose of the unveiling, but you ended up providing Nigerians with a chartered aircraft, what happened?
That is not the case Dr. Abati. We said that on the take-off of the airline, three aircraft with 5N registration will commence operations when the AOC is ready. We said there will be a Nigeria Air aircraft that will showcase as part of their marketing strategies. The aircraft came in and did that and they created the necessary hype they wanted to create. You cannot come and keep an aircraft here pending when the AOC is ready before they commence the flight. We have seen Air Peace that kept aircraft on the ground for more than three months and we have seen other airlines keep aircraft on the ground waiting to get AOC. I have also seen Air Peace, at a time, he came to us that he wanted us to permit him to go to America, China, and London, and we gave him the permit to go. He brought in two B777. He was paying leases of N250,000 on each. He was paying half a million naira per month on two aircraft and he kept them for 18 months that was $9 million and did not go anywhere and by the time he was ready to start, his landing gear was due, his engines were due and depending on what is due, you will be putting aside another $10 million. He was starting that business with minus $19 million. Who does that? These Ethiopian people are masters of the game. They have been in the business for 77 years. Last time, they posted a profit of $1 billion. They are the only airline with Qatar that during COVID-19They can’t keep their aircraft on the ground waiting for AOC. Once they get the AOC, they are ready.
How much has Ethiopian Airlines invested in the business? Are they going to maintain the aircraft? Nigerians need to know.
Who is going to do maintenance for the airlines? We should ask the shareholders. If they agree they want to give it to Ethiopian Airlines to do, it is fine for them. If they agree to give it to someone else in Morocco to do it for them, it is their business. I know that part of our roadmap here in Nigeria is that we have established an MRO which is coming soon which they can leverage upon.
Merging of Aero and Arik to form a national carrier
Whoever must have done that must be making a huge error because at the time Arik Air was taken over by AMCON, Arik’s exposure to AMCON was about N250 billion, and Nigerian agencies under aviation were owed by Arik over N30b like other people like catering and so forth. Arik was indebted to about N350 billion. Which company would start on the wrong footing with such huge debts? We have been vindicated on that. Arik has gone to court to take back its airline and at the time AMCON took over, only about three aircraft of Arik were flying. They had engines all over the world, aircraft held all over the world because they were owing. If you start using Arik and Aero put together, you are starting with litigation and we have been vindicated. So, it is a wrong idea. You have an airline that is private sector driven; 95 percent private sector and five percent to government, so that government would have a stake in it. From 1980 when the sector was liberalized, over 130 airlines that started, only seven or ten are functional or still alive. Kabo, Okada, Sosoliso, Chanchangi, Bellview, ADC, First Nation, IRS, name it, they have all completely gone down the drain.
Why the unveiling of the airline on the last day of the administration that you served? Why didn’t you leave it for the next administration to continue from where you stopped?
I said that it was the owners of this airline with a consortium of the Federal Government decided to do that unveiling as part of their marketing strategy. It was not the government that was doing that. Before we run out of time, there are two fundamental things I want to answer. One of them is that there is an allegation that the whole thing was shrouded in secrecy. I find that mind-boggling and I find it disturbing. This airline was advertised during the beginning stage, in national dailies and in the Economist and there was a bidders conference and members of Airline Operators of Nigeria (AON) participated in the bidders’ conference. I remember that I saw Air Peace participate in the bidders’ conference and everything was deposited on the website. We have a dedicated website by ICRC and the whole world knew we were bidding everybody knew they even asked for an extension of time which we gave them four weeks. What is secrecy? We held six stakeholder conferences on Nigeria Air. We presented the OBC to the public, we presented it to the stakeholders. The bidding was done transparently and deposited at the website during the bidding. Don’t forget that the Attorney General, Ministry of Aviation, Finance, and others were members of the evaluation team. ICRC ensured it followed the law. They issued a compliance certificate and said what you have done is within the law. What is the secrecy they are talking about? It is within their imagination.
You referred to Air Peace about twice in the course of this conversation, but it is not only Air Peace, SAHCO, and the AON who seem not to agree with the process, what do you think their fears could possibly be?
Perhaps, their fear is that they think that the airline will take advantage because the government has a stake in it, they feel they will be given tax-free. There is not going to be any advantage given to this airline. I personally invited every single one of them. This is the first time in Nigeria that you have a well-structured airline and a clear business case not owned by one man but going to be owned by people who are professionals who know how to run airlines or businesses. At the beginning of the liberalization of the sector, we had Kabo, Okada, Chanchangi, Harka, ADC, and the rest; 130 airlines, all of them down the drain. I remember when we were leaving, we did a policy; NCAA will release the regulation. We did a policy that there must be corporate governance; they must appoint one independent director to be approved by the NCAA to ensure that they are healthy. We have been supporting them. Nigeria can remember that the government and I stood up for Air Peace and ensure they must go to Dubai and they were given Dubai route. Are they going there now? They are not there because they do not have the capacity. I agree that it is not only Air Peace, there are only five of them that went to court, Air Peace, United Nigeria, and Max Air.
We had an objection to United Nigeria when they came in because we had an airline called United and he got the license without knowing me. They came to beg me to stop the Nigeria Air project and I told them why are you not going to buy shares in it and he said to me, Honourable Minister, I need to appreciate you that I have known you, never met you in my life that I went for my license and I got it and that is the culture we met in aviation. 50 percent of all airlines in Nigeria today were gotten under my supervision and known of them had any reason to come and see me as a Minister. Just go ahead and do your job professionally. Nigeria Air will not be treated differently from them. 50 percent of all airlines in Nigeria today were done under my name. Under me, aviation became the fastest-growing sector. Airlines have doubled, and our airports and passenger number have tripled. We were efficient. We were just trying to set up a roadmap that is good for the sector.
Firefighting truck cost
Fire trucks, if you are an aviator, you would know that if there is no fire cover, the airport will be shut. The cause of the Sosoliso crash was wind shear but the students would have been alive if there were fire cover. The fire fighting trucks were ordered three years ago and yes, there are about N1.2 billion per piece. I think I need to respond to my friend who said it is a fraud.
The former Chairman of the House Committee on Aviation, Nnolim Nnaji, what I said to him in private, I will say it to you now. Just to give you some comfort, he asked me to please indulge him and give him 5% of the airline. I told him that it belongs to the owners. It is not me giving it, I did not get involved. It was a bidding process. I am sure they would have reserved that five percent for him if he approached them and get the five percent that he needed. The records are there. There is the Freedom of Information Act; you can go and get the records and apply for them and get them.
Senator, let us get something clear, you are saying that Hon Nnolim Nnaji asked for 5%. Is it five percent of Nigeria Air or is it five percent of the fire fighting trucks contract?
I recorded all my things anyway, so, I am clear about it. He asked me to give him 5% of Nigeria Air for him and his people. I said to him that time and perhaps, he did not understand me. This is a bidding process that had taken place and I told him to go to those people and get his 5%. I told him that even the 5% held by the Federal Government is for the government
In other words, Hon Nnaji and his colleagues in the Aviation Committee are asking you to be bribed before they could support the Nigeria Air project.
Let us be fair, Hon Nnaji did not say other members. He said he wants 5% for him and his people, it could be his family, brothers. I don’t know what it meant. I told him to approach the owners. I was once a senator. You called for a public hearing and right into the public hearing, you turned the paper and read the riot act. What is the practice in the National Assembly is that after hearing people and their complaints, the House would do its job. You have been overseeing the Ministry for four years, is it now that you knew that was fraud in the airline, it means that you did not do your work.Google+