Hadi Sirika, Nigeria’s immediate past Minister of Aviation has been in the eye of the storm lately over the debacle of the unveiling of the Nigeria Air on the 29th of May, 2023, his last day in office.
So many controversies have trailed the Nigeria Air project with allegations flying around between the former Minister and the Committee overseeing the Ministry.
A few days ago, he appeared on Arise TV to address the burning issues surrounding the controversial Nigeria Air Project. Sirika revealed that Ethiopian Air owns 49% of Nigerian Airways Ltd, while private Nigerian companies hold the remaining shares. He justified this ownership structure and emphasized that the majority of the airline must remain Nigerian-owned.
He also disclosed how and why the sum of N12bn was used to buy 10 firetrucks and how the Chairman of the House Committee requested a bribe before backing the project. Excerpts
Many Nigerians Are Calling For Your Arrest Over The Unveiling Of The Air Nigeria Which Has Been Described As A Personal Project And Not A Project Designed In National Interest, How Do You React To This?
The issue is not the desirability of having a National Carrier for the size of the Nigerian economy, its population, and for being the center of Africa.
I am here because I once was a public servant who has taken decisions on behalf of the people and it is only morally right that when there are accusations of fraud, corruption or secrecy, and so on, and when there are accusations of things not being done in the right manner for me to come and explain to the public what has happened, to allay their fears and explain issues because I am accountable for my actions.
Nigeria Air is a company known to Nigerian Law as Nigeria Air Limited with shareholders in the company. It is not going to be a chartered company; it is going to be a company like every other company.
And the structure of that company is such that, there is going to be five percent for the Federal Government, held in trust by the Federal Ministry of Finance Incorporated, and then, there is a 49 percent strategic equity partner which is Ethiopian Airline in this case, and also, a 31 percent held by MRS and 15 percent by SAHCOL.
This is the structure of the airline, it is a company known to the law like Max Air, Air Peace, and Ibom Air are known to law.
One Of The Shareholders You Mentioned, SAHCOL Complained Of Not Being Invited To The Unveiling, Can You Explain Why This Unveiling Done On May 29 Is Different To The Unveiling Done In Farnborough?
There are two different phases, remember at the beginning of this exercise, the FG had a business plan and that plan is such that there is going to be a viability gap funding of about $350m by the government of Nigeria through the Central Bank of Nigeria (CBN) which in that case it will be owned by the company but repaid back to Nigeria.
At that time, we did not have the name, the colour, the logo of this airline, so, we began the Social Media Campaign which is on record where 400, 000 people participated in the campaign to create the name, logo, and colour, and delivery of the airline.
And Farnborough being an Air Show where the entire world came to, where we’ll be needing aircraft from either Boeing or from Airbus and they are all there. So, we went there to discuss with them and pick the best deal for the Airline at the time when the government was driving it.
We thought that in that place after the negotiation with would-be investors, we would have the opportunity to discuss with them at a one-stop show, discuss with OEMs, and also investors or would-be partners like Qatar Airways, Ethiopian Airlines or Lufthansa.
So, we seized the opportunities at that time so that the product of the campaign by 400, 000 people will now be shown to the world that, hey, we are coming, at that time, the government was driving it.
Thereafter, the business changed, the business outline changed, and now, we have partners that have owners. The unveiling that was done in Abuja was not done by the government and the purpose of going to Farnborough is not just to unveil, but to take advantage of it.
Coming back home now, when Nigeria Air had its own shareholders, the bid was done, and the bid was won by some people who in their marketing strategy decided that they want to unveil this Aircraft by this Airline to come into Nigeria and showcase what it’ll be pending when the Air Operator’s Certificate (AOC) will be completed and they will begin to fly, so, the strategy that they did and the marketing is their own, it’s for the owners, it’s for Ethiopian Airline, MRS, ET, and others.
On why SAHCOL wasn’t invited, I am unable to answer that, they should ask their partners, I was invited and I went there, I inspected the Aircraft, and I made statements there.
I was asked when I thought this aircraft would fly and I said it would fly as soon as the Air Operator’s Certificate (AOC) is issued and that’s okay, what if the newly installed government decides not to continue, I said, if they decide not to continue, they have only five percent of the company, so, the remaining 95 percent would continue. Or if one of the rest that holds percentage refuses to continue, the rest would continue, so, I think it is very clear.
The Shareholders That You Mentioned, How Much Have They Paid As Equity Into Nigerian Air?
The business plan had a $200m as capital, they will pay equal to the shareholders that they are doing, I know currently that they are signing the shareholder’s agreement, once they finish the documentation of the shareholder’s agreement, and they sign, then, they will pay.
Of course, they cannot take a shareholder on paper, no one does that. Everybody will have to pay, except the Federal Government whose 5 percent would be in kind or the services for rentals and so on. So, all of its services and what they have been doing will be quantified, if it is up to five percent they take five percent, if it is more, they get their refund, if it is less, the services will be quantified to make up to for it.
How Much Has Been Spent By The FG So Far On This Project?
From 2016 till date, all of the monies voted for National Carrier was N5bn, voted and budgeted for.
But, all that was released is in the neighborhood of N3b, not N85b. And even out of the N3b released, we’ve not expended all of it by the time I left office and what has been done with that money is nothing but transaction advisory services, AOC processes, salaries and consultancy services and for the Office in Abuja. No contract has been given by Hadi Sirika or the administration at the time these were the things that the money was used for.
There is the Freedom of Information Act, people can apply and get all the records that the money was spent on.
Again, it is the imagination of Roland Iyayi and the National Assembly to say that N85b was budgeted and spent. So, I am telling you that from 2016 till date, the total number of money that has been spent is about N3b. So, the N85b is in the head of the person who said it.
Speaking About The Level Of AOC Achieved, There Are So Many Controversies, What Is The Truth?
What The Managing Director of Nigeria Air, Dayo Olumide meant when he was talking about the AOC because he was cut short was that the post-holders which are the key personnel of the airline, their contract expired 31st of May and the Nigerian Civil Aviation Authority (NCAA) is saying the contract of the people to run this airline has expired, so, change them.
So, if they had changed them, all of them then, they, go back to stage one, but they didn’t change them, they only extended their contract. They have already gone to the NCAA, they’ve been interviewed and they’ve passed, as far as that is concerned, they’ve passed that level already.
Immediately the Ministry received it, and Nigeria Air received it, they reappointed the same people. They do not need to go through any other thing because they are the same set of people. So, it’s gone past stage one. It is my belief that all of the documentation, including 23 sets of manuals at the time we were leaving has been sent to NCAA. So, the term expired, but they were renewed, so, you are not going back to stage 1, you are continuing.
One Of The Issues That Emerged From The Meeting Between The House Committee And The MD Of Nigeria Air Was That The Aircraft We Saw Was Chartered, Now, Who Chartered The Aircraft, How Much Did It Cost? The Aircraft Was Also Reputed To Have Carried Some Passengers Back, To Whose Benefit Was That, Nigeria Air Or Ethiopian Air?
The AOC owned by Ethiopian Airlines is known to Nigerian Laws and the NCAA and they are permitted to come in as either scheduled passenger carrier, charter, or cargo. They can only come in under one of the three. So, they came in on charter. Charter does not mean that anybody paid for anything.
To answer your question, the government didn’t pay a dime for that aircraft to come in. Also, there are no revenue passengers going out, which would have totally been against the law and wouldn’t have been allowed.
And like I said, it is their own strategy as partners, equity partners. They came to do this unveiling on a special allowance which is called a charter, charter does not mean that we paid for it. If there was anybody that would have paid for it, it would have been the Ethiopian Airline, not Nigeria Air or the Federal government. No penny was paid, I hear figures like N139b were used to bring in that Aircraft, how ridiculous can that be!
People should get more serious, N139bn can buy five brand new 737s, so, how can you use that amount to paint and bring the aircraft in?
So, there is no iota of truth in it, no penny was paid and people should invoke the FOI Act to ask for the records and figures and ask for explanation and it would be given to them.
Domestic Airline Operators Secured A Court Order Against The Unveiling Of The Nigeria Air, Yet The Unveiling Was Still Done, It Would Look Like What Was Done On May 29 Was A Violation Of A Subsisting Court Order, What Do You Have To Say About This?
While there was a court order, there was also a motion to vacate that order immediately by our counsels. But I am not the courts, and I cannot determine here on TV whether it is contempt of court or not, I leave that to the courts to decide. But certainly, there was a motion in place to vacate that court order.
One Of The Concerns Raised By The Domestic Airline Operators Was That First, Ethiopian Airline Has Been Given An Advantage, First To Initially Operate Within The Domestic Routes, Two, To Enjoy Tax Holidays For Fifteen Years, And That The Priority Of The Ministry Of Aviation Under Your Watch Should Have Been To Provide BASA Opportunities In Frequency Of Flights From Nigeria To Other Parts Of The World Rather Than Giving Advantage To A Foreign Airline To Come And Dominate The Domestic Routes In Nigeria. What Is Your Take On This?
There is a company called Nigeria Air with shareholding, just as Air Peace has announced that they have acquired 70 percent of Antigua and Barbuda National Airline, it is the same way that Ethiopian Airlines are acquiring 49 percent of Nigeria Air. Nobody stops Air Peace or Ibom Air to go and buy shares in Lufthansa.
Whether they should do operations locally, yes, they should, they are a Nigerian company, and Nigerian laws allow you to come and own 100 percent of businesses, as a foreigner, you can own 100% of businesses in Nigeria, there is nothing wrong with that.
Regarding tax holidays, in the initial outline business case, there were allowances that they should be given some tax incentives. Because at that time, Aviation became the fastest-growing sector of the economy.
So, the Minister Of Finance Budget And National Planning thought that by giving them tax incentives that will enable them to participate and contribute to the GDP of Nigeria” thus the tax incentives.
That has since been removed, it was in the initial agreement, but now, currently, there is no tax break or holiday for Nigeria Air Limited. They will operate within the same tax laws that everybody is operating. But they are going to be operating within a special economic zone we established and they will enjoy those taxes like every other person.”
We have done so much to support these Local Airlines, 50 percent of these local airlines flying today were licensed under my tenure and under the government of former President Muhammadu Buhari. We have supported them by removing taxes, VATs on Aircraft, and spare parts, this has been unprecedented.
You Promised Nigerians Three Aircrafts But Could Only Provide One Chartered Aircraft, What Happened?
That is not the case, what we said was that at the takeoff of the airline, three aircraft in the name of Nigeria Air will commence the operations once the AOC is ready but that on the day of the unveiling, a Nigerian aircraft will come in to do the unveiling as parts of their marketing strategy.
The aircraft came in and did that and created the necessary hype that they wanted to create as their own business strategy and I want to tell you that there are two things here. I think perhaps people should understand that some people now own Nigeria Air Limited as against the time that the government was trying to push the idea, now they have shareholding and they decided to do whatever marketing they want to do in their own style so long they are within our rules.
They also can’t keep their aircraft here pending when the AOC and everything are ready to commence flights.
Several airlines have done so in the past and I will give you examples, Air Rano kept its aircraft for about two to three months on the ground doing nothing, waiting to start operations.
We’ve also seen Air Peace at a time coming to us and asked that he wanted permission to be flying to America, China, and London, we gave him the permits. He brought in two 777, he was paying leases of about $250, 000 per one, this means he was paying a lease of half a million dollars per month for the two aircraft and he kept them there for 18 months, this is about $9m and it didn’t go anywhere and by the time he was finally ready to start, the Landing Gear was due, the engine was due, depending on what was due, that was another about $10m, so, he was starting that business with a minus $18m! Who does that?
These Ethiopian are masters of the game, they’ve been in the business for 77 years. They also posted profits during COVID 19
Last year, they posted a profit of $1b, they are the only airline alongside Qatar Airways that posted profits during COVID-19. So, they wouldn’t come and keep the aircraft waiting for the AOC to be approved.
How Much Has Ethiopian Airline Invested In This Project? How Much Are They Expected To Invest And Are They Going To Be In Charge Of Maintenance Contract?
It is for the shareholders to decide. As part of our roadmap here in Nigeria, we have established an MRO which is coming soon Maintenance Overhaul Facility which is also coming soon to which they can leverage, it is the owners that will decide.
On what they will pay as an investment, they will pay equal to 49% and the total is $200m, so, they will be required to pay 49 percent of $200m.
What About The Management Structure? What Percentages Are Reserved For Nigerian Investors And What Percentage Is Reserved For The Ethiopians?
At the time we were driving the process before we found the investors, we said that all the crew, the pilots, engineers, and cabin crews will be Nigerians, so long there is a competent Nigerian, it will be Nigerian first and we agreed. For those who will be holding the management post, it is the owners of the company who will decide who owns which position that will pay them value for their money. Nigeria Air will operate within the laws of Nigeria and ensure there is value for money.
But what we put in place is that “95% of the majority of the airline must remain Nigerian.
Arguments Have Been Put Forward That The Likes Of Arik And Aero Contractors Could Have Been Brought Together To For Nigeria Air Instead Of Bringing The Ethiopians Into The Matter?
Arik was indebted to about N300b, who would start a business with a minus N300b? Secondly, there would have been litigations by the owners and we’ve been vindicated as Arik has gone to court and has taken back its business.
Most of their aircraft were also being held all over the world because they were owing. So, if you had started Nigeria Air with Arik and Aero Contractor, we would have been saddled with litigations and we’ve been vindicated.
Why The Unveiling On The Last Day Of Your Tenure Why Couldn’t It Be Left For The New Administration?
The consortium that owns this project decided to do the unveiling that day as part of their marketing strategy. It wasn’t the government; I was invited and I only went there.
I find it mind-boggling when people say that the unveiling was shrouded in secrecy This is an airline we advertised in dailies during the procurement stage and there was a business conference and members of the airline operations of Nigeria participated in this conference.
The whole world knew that we were bidding and everyone bidding and even asked for an extension of time. It was open. So, where is the secrecy?
We held 6 stakeholders’ conferences and presented it to the public. The bidding was done publicly and was deposited on the website and don’t forget Ministries of Finance, Aviation and Justice were members of the valuation team. The ICRC regulates any PPP arrangement and ensured that it was according to the law. And they issued a compliance certificate to say yes what you have done is within the law.
Why Do You Think The Domestic Airlines Are Afraid Of Nigeria Air?
I think that their fear stems from the fact that they think because the government has a five percent stake in it, the Airline would be given an advantage.
I invited all of them to explain that this is the first time that we have a well-structured airline with a clear business case not owned by one man but will be owned by people who are professionals who know how to run airlines.
NCAA will soon release regulations addressing corporate governance issues which includes the appointment of an independent director on the board of the airline.
That they must be audited by one of the Big 4 audit firms to ensure accountability.
Despite the objections to United Airlines’ registration, I ensured that he got registered even without knowing me. He came to my house when I was ill (for a meeting) and begged me to please stop the Nigeria Air project and I told him why not go and buy shares in it.
Clarify The Actual Amount Spent To Buy The Controversial Firefighting Trucks And Why The Urgency?
The Sosoliso tragedy would have been averted but for the absence of fire cover. We ordered these fire trucks about three years ago and yes, they are N1.2 billion per truck which amounts to N12 billion for 10 of them.
The firefighting trucks were specifically manufactured for Nigeria and it is not off the shelf. The cost also includes 1% VAT, 5% WHT, custom duty, transportation, training, spare contractor markups, cost of funds, and exchange rate assuming the figure of $600 million is correct.
Before I close, I need to respond to my friend Chairman House Committee on Aviation, Hon Nnolim Nnaji who said the whole thing was a fraud.
What I said to him in private, I will say it now. He asked me to please indulge him and give him 5% of the airline and carry him along and his people. What I told him in private is that it belonged to the owners and I believe they will still be willing to give him if he had the money.
Are You Saying That Honorable Nnaji Asked For 5% Of What? Is It 5% Of The Fire Truck Contract Or Of Nigeria Air?
You know I record all my things anyway. He asked me that I give him 5% of Nigerian Air to carry him along with his people. I said to him that time, Honourabe you did not understand me, this is a bidding process that has taken place and some people won.
You should go to those people and ask them for the 5%. And I want to assure you that even the 5% held by the FG will go to market and he should get his money ready to buy for himself and his people according to him.
Are You Saying That Honourable Nnaji And His Colleagues In The House Of Reps In The Aviation Committee Were Asking To Be Bribed Before They Could Support The Nigerian Air Project?
“No, no in other words, let’s be fair, Honourable Nnaji did not say other members, he said him and his people, his people could be his family, his members, could be leadership, I did not know what he means.”
The whole process was also not done right by his committee. I know how the workings of the National Assembly are, he called for a public hearing, and right after the public hearing, he just turned the paper and read the riot act.
The practice in the National Assembly is that after hearing the people and the complaints, you now go and sit down as the committee, the clerks will do their job, address the issues raised and then approach the whole House Of Reps and take the position of the House plus the leadership and then come back make your findings known. Not that immediately after the hearing, you just read the riot act, it means that it’s predetermined.
