Aviation Minister again in uncharted flight path by Chris Aligbe

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Nigeria Aviation Minister, Hadi Sirika is a trained pilot who knows that flights are conducted along well laid out flight paths between two destinations. This is so for effective management of the airspace to guarantee safety of flights and passengers. Such a management is usually to avoid accidents or crashes that can arise from mid-air collisions, flight into blind spot or total loss of an aircraft, to mention but a few. Why then would a trained pilot like Sirika develop a penchant for deliberately flying into uncharted flight path? We saw this with the resurfacing of the Abuja runway against so much hue and cry and unbelief. Again with hosting of ICAO World Aviation Forum, a global Conference which had never before held outside Montreal, the ICAO headquarter in Canada. It is true that the work on the Abuja runway was carried out with a precision that is uncommon to our experience and that the success of hosting of the ICAO World Aviation Forum has been rated as a global benchmark. But it is still valid to ask, are these two successes enough to establish the kind of confidence the Minister or any one will depend on to take us on another trip along the uncharted flight-path represented by the six Projects in the Aviation Minister’s Roadmap? Does Hadi Sirika have a comprehensive history of the past attempts made in the aviation sector along the line of his Roadmap? Does he realize that all of them failed, and does he know why and how they failed? What has he done or is he doing differently that will guarantee success? Have we not heard about MRO? Have we not heard about Airport Concession, about National Carrier, Aerotropolis, Cargo Terminals? What have we not heard about from past Ministers and Governments in the aviation sector? Where have all of them taken us to? It has all been like a “circular movement of an injured crab”, leading to backwardness, decadence and decades of unimaginable loss to national economy.

All these questions arose as some of my industry colleagues and I discussed the future of the industry after Sirika’s unveiling of his Roadmap and Transaction Advisers on Tuesday, March 27, 2018 in a Stakeholders Forum in Abuja. There is no doubt that these questions are germane, real and arise out of painful experiences in the past, particularly since 1999. The history has been a chequered one featuring grandiose promises, inordinate ambition, deceit, misappropriation of our commonwealth, impunity, blatant lack of transparency and outright subsumption of national interest under personal, albeit, selfish interests. In our aviation sector, over these years, political actors had acted on Winston Churchill’s dictum that “in a war situation, truth must be surrounded by a body guard of lies”. Our Ministers of Aviation over the years, with the tacit approval of their Principals, surrounded truth with body guard of lies. Virtually, all of them seem to have followed this path hoping to get different results. But all ended the same way; failure. It all fitted into Einstein’s description of insanity as “consistently doing the same thing and hoping to get a different result”. But as Einstein averred, the results were the same; failure. The questions raised in our discussions of the Minister’s unveiled Roadmap and six Transaction Advisers may seem uncomplimentary and a put-off but only a comparative analysis of the past and present will indicate whether we are following the usual road to failure or whether we are headed on a new road to a departure from the failures of the past. In the industry, one of the greatest challenges and causes of failure of all efforts is the total lack of transparency in all the programmes and dreamed-up projects since 1999. Of the six Projects in the Aviation Minister’s Roadmap, only two – MRO (Maintenance, Repair and Overhaul) Centre for aircraft and Aircraft Leasing Company did not feature in the last 20 years. In short, Aircraft Leasing Company has never featured in any discourse in the industry since the history of aviation in Nigeria. Once the idea was muted in 2010 in a very closed circle during the Public Hearing on DANA Crash at the National Assembly, it was quickly killed before it incubated by some powerful interests that did not want it. The issue of MRO has been in national discourse even before 1999 with every stakeholder-discussant believing that it is one outfit that is needed for aviation in Nigeria to move forward. In fact, the first time I heard about it was in early 1989 when I was still on my Associate Editor desk at the Democrat Newspaper in Lagos. Then, it featured as the National Hangar Project. I did not understand it then. Months later, I joined Nigeria Airways where I then heard of the National Hangar more regularly but not in public domain. It was primarily between my then Boss, AVM A. D. Bello, then Chairman/CEO of the Presidential Task Force (PTF), on Nigeria Airways and a dashing young man named Dr. Segun Demuren, an Aeronautical Engineer, working as Director of Airworthiness in late Air Commodore Falope-led Federal Civil Aviation Authority (FCAA). But when AVM Bello left in January 1991, the National Hangar Project was hung on the hanger as it were, sine die. However, during the period between 1999 and 2007, the then Governor of Akwa Ibom State, Obong Attah dreamed up a Maintenance Hangar sited at the new Uyo Airport. It was not well thought out because, from all indications, there was no feasibility study and market research to determine viability and success. It appeared more of a political decision. I came to this conclusion because we carried out a study of thirty-six (36) MROs across the world in 2012 and found that only four (4) of them – one in Oceania and three in Europe started without airline parents. All the others started as in-house maintenance for their parent airlines, then developed into providing maintenance services to third parties and finally as independent outfits or Subsidiaries of their parent airlines. Secondly, as at the time Akwa Ibom Airport MRO was conceived, there were three major airlines in Africa – Ethiopian, Egypt Air and South African Airways. All of them had developed MROs with great capacity for third party maintenance. In fact, South Africa had the largest Maintenance Hangar in Southern hemisphere which it developed to cope with its pariah status as an apartheid regime. Thus, the then Akwa Ibom government followed the same path of failure that has become our national companion in the aviation sector, the components of which are: lack of transparency, non-use of professional consultants in all ramifications in the establishment of viable projects. As we warned years ago, the Project has remained imperiled and will so remain unless it seeks to find a place in the coming dispensation. Compare the Ibom Airport MRO establishment process with the process of the MRO in the Aviation Minister’s Roadmap. The first departure from the norm is that the proposed MRO appears to be carefully and consciously tied to the proposed Aviation Leasing Company. The indication here is that there will be a symbiotic relationship between the two which will make the MRO serve as the maintenance outfit for the Leasing Company. If this is the plan, it will create an instant market for the MRO just like, or, even better than MROs with airline parents. This will no doubt make it a very attractive investment to potential investors ab initio. Secondly, there is a consortium of five (5) Transaction Advisers already working on the MRO and the Aviation Leasing Company. The Advisers who will cover all necessary aspects for successful establishment include: Arup (UK) for technical, Catamaran Nigerian Limited for infrastructure development with special bias for transportation and RDC Aviation Economics (UK) with experience covering airports, airlines, manufacturers and investors. The remaining two include: Aubert Business Consulting (UK) with expertise in market research, business model and supply chain management and Olawoyin and Olawoyin (Nigeria) with expertise in foreign investments, securities and litigation. No doubt this array of Consultants is indicative of an understanding of what is required and in tandem with global best practices where the engagement of professional expertise and transparency are the two critical conditionalities for success. Airport Concession: This has been an issue in our country since the new millennium. Before then, nobody ever thought of concessioning airports. Airports were seen as properties of Government and as such, Government’s responsibility. They were parastatals under the appropriate Ministries. But one of the greatest mind-shifts and perception re-order came in the second year of Obasanjo’s first term when he took the decision to allow a private developer to undertake the development of a new domestic Terminal at Lagos in replacement of the burnt Terminal during the Abacha years. The decision was novel. Unfortunately, the processes fell short of global best practices in virtually every material particular as Lawyers will say. This can be seen in the following areas: absolute lack of transparency, non-involvement of FAAN in the planning, design, and siting of the Terminal Building as well as in the negotiation and determination of the terms of the Concession Agreement. Also the controversies of the length of the Concession period and how the Terminal (BOT) moved from Sanderton to Stabilillini Visioni and Bi-Courtney are pointers to some of the common problems earlier mentioned. And this is why what would have been a perfect world-class poster for Nigeria, is sadly, engulfed in endless rancour. The second attempt at airport concession was under the ministerial tenure of Omotoba during Jonathan’s administration. Omotoba appointed a renowned Pilot, Captain Dele Ore to drive his airport concession plan. It is true that in carrying out his assignment, Dele Ore involved ICAO to some extent, which the industry knew little or nothing about. Dele Ore was a perfect round peg that was unfortunately put in a clear square hole. It was a case of an invalid extrapolation of manifest technical competence from one area to another that requires a completely different type of competence. Try as much as Capt Ore did, all his report never came up in any public discourse even before Omotoba left and the entire industry has no scintilla of knowledge about it. Again, there was clear absence of transparency and non-involvement of FAAN, the repository of knowledge on airport matters. What then is the Minister doing differently to avoid Einstein’sinsanity? What guarantees or hopes of success is his approach offering the country? Even though we are at the beginning of the process, these questions are valid. Only a comparative analysis of past attempts with Sirika’s programme can give an inkling of a start that will either lead to the failures of the past or the desired much-hoped success.

Hadi Sirika, Nigeria’s Minister of State for Aviation

As I earlier pointed out, all two past attempts were shrouded in secrecy, motives and motivations were not clear, FAAN and the right technical experts were side-tracked and not used and both were lacking in clarity. Against this is that the Aviation Minister is not, like Omotoba, musing on which Airports to concession. The information in the public domain is that Lagos, Abuja, Port Harcourt and Kano airports are being considered for concession. Secondly, in line with global best practices, a Consortium of five firms with extensive and verifiable experience in all aspects of Airport Management and Public Private Partnership as well as portfolios in finance, environmental and social services have been engaged to work on the concession advisory. These Companies include: Infrata: The lead Consultant, based in UK. Infrata is an Infrastructure Transaction Support Consultancy firm that has handled high profile transactions in Africa, America, Asia and Europe. Next is Dentons; a London-based law firm with expertise in Project Delivery Advisory services in both developed and emerging markets. It has a global spread with 144 locations across the continents in over 59 countries. Also is Rebel: a Netherland-based global operator with specialization in economics, feasibility, financing and transaction advisory in all infrastructure sectors. The fourth member of the Consortium is WSP Persons Brinckerhoff; one of the leading global brands in engineering services consulting with over 75 years’ experience in the aviation sector with offices in more than 79 countries across the world and with world-wide success references. Completing the Consortium is Preserve, a Nigeria-based firm with expertise in Project Co-ordination Management and local legal experience. Preserve maintains strategic alliances with globally reputable partners. The third point of departure is that unlike, MM2 and Omotaba’s processes which did not pass through the crucible of FEC debate and approval, the present programme was deliberated upon and approved by the Federal Executive Council. In addition, FAAN is not in the dark about what is on the bloc and the Unions’ representing the workers have been reassured of involvement once the Transaction Advisers submit their reports. If this painstaking processes were followed in the Concession that led to MM2 and indeed, in all the other Concessions in the industry, we would not be facing the sad and damaging controversies over the actual terms of the Agreements that originated them. NATIONAL CARRIER The next major Project in the unveiled Roadmap has to do with the establishment of a National Carrier over which three Transaction Advisers were unveiled. The issue of a National Carrier is one that has probably attracted the greatest attention and most robust debate in the industry. The industry engagement became intense from 2001 following the failure of the Obasanjo’s administration to privatize the former National Carrier, Nigeria Airways, between 1999 and 2001. This was in the first two years of OBJ’s political innocence that was straddled by palpable patriotic zeal and interest. On assumption of office in May 1999, the then politically innocent President, burning with unalloyed patriotic, albeit, altruistic zeal, appointed the International Finance Corporation (IFC), the investment arm of the World Bank as the Transaction Adviser for the privatization of the then National Carrier – Nigeria Airways. Although, OBJ did this without reference or approval of any other organ as his Cabinet was yet to be in place, his decision was not questioned, more so because of the reputation of the IFC. The involvement of IFC was not shrouded in secrecy. Rather, it was open and in public domain. Also, in keeping with global best practices, IFC appointed three reputable Transaction Advisers in various areas of their assignment. These included: Nathan Associates, Ashurst Aviation and AW Consultants, all on Technical matters. For Legal Matters, IFC engaged Norton Rose (UK), Olaniwu Ajayi & Co (Nigeria) and Arthur Anderson (Nigeria) for Accounting purposes. Why did it then fail? Was it because global best practices are an “uncharted flight path” in our country. Partly yes, but more importantly, it failed, like Capt. Joji’s “Air Nigeria” of 1992/1993 because it was guillotined on the altar of political horse-trading, the Nigerian hobby-horse that allows national interest to be subsumed under personal desire and pursuit. Joji’s “Air Nigeria” was traded in on the altar of IBB’s quest to transmute to Civilian President while IFC’s Project “New Co” was traded in on the OBJ’s quest to battle his Vice President, Atiku, who had become an “enemy in the house”. Suffice it to say that if and only if, either of them was allowed to run its course, we most probably would not be where we are today. Between IFC and Sirika’s National Carrier Project, that is, between 2001 and 2017, there are five failed attempts at the floatation of a new National Carrier all under two Presidents, OBJ and GEJ, involving three Ministers and directly, a President. They include the iniquitous “Air Nigeria” and the concoction called “Nigeria Global”, both by Kema Chikwe – 2001-2003, under Obasanjo’s first term as well as Isa Yuguda’s “Nigeria Eagle” 2004 in Obasanjo’s second term. The fourth is the heinous “Virgin Nigeria”, floated personally by OBJ, his Associates and Richard Branson under the guise of a National Carrier. The fifth is Stella Oduah’s “ Nigeria One” 2012/2013 under the Jonathan’s administration. All these had the same DNA and as such exhibited same elements. Their flight paths were characterized by the under-listed indices though in various degrees: absolute lack of transparency, non-use of professional advisers, non-involvement of Nigerian industry stakeholders, use of square pegs for round holes, ulterior and self-directed motives, and subsumption of national interest under personal interest. Also misappropriation of our commonwealth, outright deception, diversionary tactics, untruths, arrogance of authority and sheer impunity. Over these years, these became the industry norm which fitted into Shakespeare’s “fair if foul and foul is fair”. Of all the attempts, the darkest and most opaque even up till today is “Virgin Nigeria”. While Yuguda with his Transaction Adviser, Bismark Rewane of Financial Derivatives were very sincerely and doggedly working within the ambit of their then limited exposure in airline floatation and start-ups, to actualize their assignment to evolve a new National Airline, little did they know that they were being used by their Principal as a smokescreen, a façade, indeed as an instrument of deception and diversion to mask the real intention of their Principal. I am sure they were, like all of us, shocked when on a fateful day in 2004, they saw on the Television screen, our dear President OBJ side by side with Richard Branson displaying a miniature prototype of a new National Carrier named “Virgin Nigeria”. Before and after that, nothing else was known to the industry about the airline including, ownership and ownership structure, actual investors, terms in the Agreement, etc. Every effort made to find out, including letters to the President, stakeholders and media complaints were ignored with impunity. Stakeholders were pained when a member of Richard Branson’s team told one of us that in his forty years in aviation, he had never seen any nation cede the rights Nigeria ceded to Branson on Virgin Nigeria. In fact, the quest to unravel the details of “Virgin Nigeria” claimed the life of an industry activist, Capt. Jerry Agbeyegbe, who dared to challenge and stop its floatation in the court. His martyrdom is unsung today. Virgin Nigeria today, in our aviation history, remains the worst failure ever. Having transmuted from “Virgin Nigeria” to “Nigerian Eagle” in the hands of UBA Capital and Jimoh Ibrahim, it left us with a debt of N35billion in five years of operation, more than Nigeria Airways in 20years of operation: 1985-2005 before its ill-advised liquidation. Today, without the government holding anybody responsible, Nigerian taxpayers are bearing its debt burden. In fact, only a forensic audit can unearth the ignoble financial engineering that created this debt burden. I have only diverted a bit to elucidate the fact of failures due to the flight path and norm we have charted and followed in the aviation sector since 1999. Today, Sirika seems to be flying out of the norm with the unveiling of his Roadmap and three Transaction Advisers for the floatation of a new National Carrier. The Advisers are: “Airline Management Group Ltd”, A UK-based firm with extensive and verifiable experience and expertise in airline management and start-ups. The second is “Avia Solution Ltd”. One of the world’s leading aviation advisory firms which was acquired in 2012 by GE Capital Aviation Services (GECAS), the world’s leader in aviation financing and leasing with over 45 years’ experience and over 270 clients in 75 countries and a network of 24 offices world-wide. Some of its clients include BA, Etihad, Easy Jet, Flybe to mention but a few. The third in the Consortium is Tianerro FZE. So far, by unveiling his Roadmap and Transaction Advisers to the industry with the promise to engage and involve industry stakeholders and the industry unions, particularly in FAAN as well as domestic airline operators, the Minister has chosen the path which none of his predecessors or past governments chose – the path of transparency, involvement of relevant industry experts and domestic stakeholders. Prima facie, Sirika has avoided those paths that led all past attempts to fail. However, it is too early and will be hasty to be categorical until we get the Transaction Advisers’ advisory, evaluate Sirika’s Triangular Strategy, his decision when he reaches the T-Junction. Nevertheless, one thing is clear; he has taken the path that has high potential for success when pursued with his present commitment, passion and altruism. It is certainly not yet UHURU but one can say “SO FAR SO GOOD”.

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