Presidential Jet: Controversy Trails Okorocha's Purchase
From all indications, it appears controversy permanently lies side by side with any matter relating to the presidential fleet. When President Olusegun Obasanjo wanted to change one of his aged aircraft sometime ago, public outcry dogged the move. At a point when orders were made for a new one, it ended in controversy. Last week, a public bid conducted by the presidency to sell off two of the aircrafts on the fleet is now a subject of another brouhaha as Joseph Ushigiale reports
When the presidency announced two weeks, its intention to auction two of its aged aircraft on the fleet - a nine seater Gulf Stream G - 11 and an HS 125 plane, the announcement suddenly ignited the interest of some of the players in the aviation industry.
For them, it was not only an opportunity to add a new aircraft to their fleet, but also an honour to acquire a plane from a presidential fleet because of the added advantages.
Additionally, when the presidency took the decision to publicly auction the planes, industry workers were optimistic that the bid process would follow due and transparent process devoid of the sharp practices that had characterized similar of such exercises in the past.
Penultimate Tuesday, the bid process commenced at the State House in Abuja under the supervision of the Permanent Secretary in the president's Office, Mr. Steve Orosanya. Among the airlines that indicated interest to buy the two aircrafts put up for sale were the Rochas group Amjet both owned by Presidential Adviser, Chief Rochas Okorocha; Kings Airline by Senator Musa Adede, BUA International, Ex-Jet Services Limited, Marola Group Limited and Multi Resources Nigeria Limited.
Before Orosanya commenced the bidding process, he announced that the reserved price for the GulfStream G - 11 was N134m. However, although two aircrafts were penciled down for sale, it was apparent that the Gulfstream was the instant attraction considering the level of interest the bidders indicated towards the aircraft. Soon, the bid started trickling in, Amjet bided N124m for the Gulfstream; Rochas Group bided N111.780m, Kings indicated interest with N64m, Marola Group Limited N77m and Multi Resources Nigeria Limited, N54m respectively.
But Orosanya rejected the bids on account that they were far too below the benchmark of N134m. He also postponed further bidding from Tuesday to penultimate Thursday to enable the companies reconsider their bids appropriately.
When the bid again re-opened, curiously, Okorocha's Amjet, which had offered N124m for the G - 11 suddenly withdrew. The field was now opened to Rochas Group and Kings Airlines. Okorocha's Rochas Group added N20,000 to its previous bid to close at N111.8m, while Kings moved from N64m to N96.4m.
On the other hand, Ex-Jet Services and BUA International Limited made unsuccessful offers of N500.5m and N485m respectively for the HS 125.
With the development, Okorocha's Rochas Group emerged as the preferred bidder for the GulfStream G - 11 beating Kings Airline to the second position as a reserved bidder.
While bringing the bid to a close, Orosanya said although the bids were lower than what government expected to reap from the sale, it was also its intention not to ground the planes any longer.
He went ahead to state that government has accepted Rochas Group's offer of N111.8m, adding however that the company is expected to pay a commensurate 30 per cent commitment fee within a week, and the balance to be paid within 30 days. Orosanya also said in the event that the Rochas Group failed to meet its payment obligations, government would have no other choice other than to call on Kings Airlines as the reserved bidder to pay for the aircraft.
But the chairman of Kings Airline, Senator Musa Adede, faulted the process that paved way for Okorocha's company to emerge the winner for the GulfStream G - 11 aircraft.
Adede criticised the bid process which paved the way for Okorocha, who is a presidential aide on inter-party relations, to emerge as the winner as flawed. "It is unfortunate that things turned out the way they did. I did not expect Okorocha to participate in the bid since he is still serving in this regime. He failed to disclose his pecuniary interest in the bid process." he pointed out
Adede said he had expected that, for an administration that preaches due process as its cardinal principle, the bid process would follow laid down rules. "Unfortunately, it did not. All I can say is that the auction exercise fell short of expectation."
He explained that he had reservations even before joining the bid and proceeded not only to prove a point, but also to satisfy his curiosity. "As a serving member of this administration, I knew that with Okorocha's participation in the bid, the result was foreclosed and predictable. He had the advantage of insider knowledge and stood a chance of leveraging other bidders on account of his privileged position."
Citing a particular instance to buttress his point, Adede said "Rochas entered the bid with two companies, Rochas Group and Amjet. Halfway down the line, Amjet, which had bided N124m, about N10m short of the N134m benchmark, withdrew from the bid process leaving Rochas Group which only increased its bid of the previous day by a paltry N20,000."
He said "by that action (Amjet's sudden withdrawal) government lost about N22m in the process because the Rochas Group that finally bought the aircraft could pay only N111.8m. Why is this possible? Does it not point to something shady?"
Voicing his reservations at the development, Adede said "I don't think it is fair and transparent to sell the aircraft to a member of this government. Although I have no problems with Okorocha who is my friend and have accepted the situation, I feel it is necessary to express my feelings over what has transpired."
But Orosanya waved off Adede's complaints, stating that the bid is open to every Nigerian with the financial muscle to participate in the process, arguing that in as much as the money for the purchase of the aircraft is not from government coffers and the official did not participate directly, such complaints hold no water.
Orosanya was apparently referring to Okorocha's preference to participate in the bid process through his chief of staff, Eze Madumere. He also dismissed the insinuation that Okorocha may have gained advantage over his competitors by virtue of his position in government, arguing that the process was neither stage managed nor arranged in a way that would give advantage to Okorocha or any of the other bidders.
Adede's outburst has however provoked public discourse because, according to aviation experts, it has succeeded in raising fundamental issues about how government is run. Not only that, it has also call to question this administration's claim that 'it is no longer business as usual' within government circles.
Orosanya's assertion that a public servant is not restricted from doing business especially when he is conducting such a business through proxies, has raised a strong moral question for the government.
It would be recalled that the controversy over a new presidential jet for Obasanjo started during his first term. He had requested for a new aircraft to replace the 20 year-old presidential jet on account that its type had been phased out in Europe and America and was also banned from overflying the airspaces of these continents.
But the National Assembly, citing economic constraints, turned down the request and instead approved $9m for the presidency to re-engine the aircraft to meet European and American standards. Some parliamentarians had indeed accused officials of the presidency of inflating the cost of the jet by $30m dollars to $80m, an accusation flatly denied by the then Presidential Spokesman, Dr. Doyin Okupe, who challenged them to prove their allegation.
Following this development, Obasanjo, who was billed to attend the G-77 meeting in Cuba, had to travel on a commercial British Airways flight with his wife for the trip. The trip aired by the National Television Authority (NTA), which captured Obasanjo embarking on the British Airways commercial flight created mixed reactions within the polity. Many commentators, including former Foreign Affairs Minister, Prof. Bolaji Akinyemi described the confrontation between the presidency and the National Assembly then under the leadership of Senate President Anyim Pius Anyim as unnecessary, adding that Obasanjo deserved a new plane.
The prospects for a new presidential jet, however, brightened with the inception of the present National Assembly which appeared disposed to the idea. It was based on this perceived disposition that informed the presidency to set-up a committee to shop for a new aircraft for its fleet.
The committee started by shorlisting three foreign financing companies to secure the airplane, hoping that by the time the presidency will take its delivery, the National Assembly would have passed the budget where about N10bn was allocated for the purchase of the aircraft. The thinking was that the passage of the budget would result to a single pay-off of the financier.
Two of the shortlisted companies were American - Uniglobal and DMJ - while the third was Dauphin, an Irish company.
The interest rates being offered by the different companies varied from between 3.5 and 10.5 per cent.
While Uniglobal, DMJ and Dauphin had preferred some repayment options ranging from one to four years, the Presidency, through the committee opted for short-term financing with an option of one-time pay off upon delivery of the aircraft.
However, problems started manifesting when it became obvious that some committee members had vested interest in one of the company - Uniglobal which was eventually selected to supply the aircraft.
But a group that was against the choice of Uniglobal faulted the selection, arguing that it has no links with Hallmark Aviation Limited of Columbia, Maryland, USA which was marketing the controversial BBJ. Before issues came to a head, the total cost of purchasing the aircraft was put at $80 million. As a result of the negative publicity and insinuation of corruption the purchase of the aircraft had generated, the Presidency reduced the previous price from $80 million to $55.4 million.
According to investigations, it was revealed that the BBJ, manufactured in 1999 with serial number 29272 and registration number N7378P was initially sold to Raytheon Systems Corporation which was also acting on behalf of Netjet, a group that specialises in corporate jets. It was also discovered that the said plane lacked not only warranty but also that it had low flying record of about 22 hours in 19 cycles. Additionally, the BBJ's landing gear, with 10 year limit, would have required a total re-fit.
It was argued that spending such huge amount to refit an aircraft was wasteful when the payment of $65m only would be sufficient to acquire a 'green' BBJ-2 direct from the manufacturers with more advanced features.
It was at this point of the controversy over the BBJ deal that the Presidency said it would dispose off three out of the existing aircraft in the presidential fleet, including the HS 1000 series which is to be sold at $4.7 million, GulfStream 11 put at $1 million and B727 going for $12.3 million. Critics however believe that at these costs, the aircraft are being traded off at give away prices, particularly the B727 which in 2001 was upgraded and re-engined with $9 million to meet European standards.
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