The Federal Government announced on Thursday that the Nigeria Air project required an estimated funding requirement of $300m up to 2020.
Speaking at the 5th Aviation Stakeholders’ Forum in Abuja, the Minister of State for Aviation, Hadi Sirika, explained that the project needed an initial start-up capital of $55m made up of $25m for the deposit for new aircraft and $30m for working capital from June to December 2018.
“Estimated working capital for 2019 is $100m. Estimated working capital for 2020 of $145m to be provided by the strategic equity partners who are expected to manage the project,” Sirika said.
Sirika also disclosed that the governments of the United States of America and France were interested in Nigeria Air.
It also dismissed claims that the process for the establishment of the national carrier was suspended due to the lack of investors.
He explained that the planned national carrier 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 said Lufthansa was replaced due to its outrageous demands which included opening an escrow account, refusal to pay tax and demand for 75 per cent upfront payment.
The minister outlined ready investors in the national carrier to include the African Development Bank, Islamic Development Bank, the governments of the United States and France, among others.
Sirika said, “There was fake news that we suspended the process because there was no investor. That is not true. Already IDB, AfDB, AFREXIM, 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.”
He added, “The suggestion that Aero and Arik airlines, which are under the control of Asset Management Corporation of Nigeria, should be merged to form a national carrier is not tenable as the national carrier would get entangled with huge indebtedness of the airlines, litigations and other encumbrances.”
The minister went ahead to explain that another major factor that stalled the process for the establishment of the airline was the inability of the Federal Government to provide a sovereign guarantee for the procurement of 30 aircraft estimated at $300m in a staggered payment till 2020.”
On the branding and unveiling of Nigeria Air in London recently, Sirika said the entire process cost about N50, 893,000.
He said, “The Transaction Adviser for the national carrier coordinated the campaign and provided the additional services that included the development of the brand strategy and the media strategies relating to the unveiling of the airline.”