Federal Government, through the Ministry of Aviation, has commenced the evaluation of the bids submitted by interested companies in response to the Request for Proposals (RFP) for the establishment of an Aviation Leasing Company (ALC) and Maintenance, Repair and Overhaul (MRO) centre at the Nnamdi Azikiwe Airport (NAA), Abuja.
According to the Ministry, this is part of its efforts to harness business opportunities in the Nigerian aviation sector value chain.
Earlier bids requested by Federal Government qualified having passed the Request for Qualification (RFQ) stage of the procurement process, whose submission deadline began on Friday, October 30 and closed on Tuesday, November 3,2020.
According to the Ministry of Aviation after the contract negation, the Full Business Case (FBC) will be developed and submitted to the Federal Executive Council (FEC) for approval and subsequent agreements will be signed between the investors and the Federal Government of Nigeria represented by the Ministry of Aviation.
The Ministry of Aviation said that the objectives of the projects are multi-pronged.
It listed the objectives to include; stopping capital flight, easing the leasing process for domestic airlines, encouraging Foreign Investment (FI) and enhancing technology transfer to Nigerians.
Others include; improving aircraft maintenance turnaround time, localizing aircraft maintenance in compliance with regulation, and generally develop the aviation sector in the country.
The ministry noted that there is no Aviation Leasing Company in Africa at the moment, as the existing ones are owned and run by major international lessors, who are reluctant and rightly so, to lease aircraft to African airlines due to the perceived risks, principally revenue, maintenance and legal risks.
On the MRO facility, which will be sited at the Nnamdi Azikiwe Airport (NAA), Abuja, the Ministry of Aviation further explained that the plan is to have in place an independent MRO facility that will cater for West and Central Africa market.
More importantly, the Ministry said that the MRO facility will service the proposed national carrier and the ALC.
“The business justification for the proposed MRO is the fact that there is no facility of this nature in West and Central Africa to address aircraft maintenance challenges. Most airlines in Africa ferry their aircraft overseas for maintenance and the huge cost of scarce hard currency is enormous,” the Ministry of Aviation said.
According to Catamaran Nigeria Limited, one of the transaction advisers for the projects, the proposed ALC will be structured as a Joint Venture (JV) between the Federal government and the private investor, adding that the business model would be, in the short term, to lease aircraft from international lessors and subsequently sub-lease to African airlines while long-term plan is to acquire, own and lease aircrafts directly to African airlines.
The proposed MRO which will also run through Public Private Partnership (PPP) using the Build, Operate and Transfer (BOT) model is expected to have the capacity to service both narrow body (Jets and turboprops) and wide body aircraft.
Government, on its part, is willing to support the initiatives by establishing a Free Zone at the airports and has initiated the process for approval.
The MRO will also enjoy maintenance exclusivity for the proposed national carrier and the ALC as well as some land lease relief considerations.