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How forex scarcity frustrated preferred bidders of 2 advertised Presidential Jets

Indications emerged Sunday revealing how the scarcity of foreign exchange (forex), failed the preferred bidders of advertised two of the 10 idle Presidential Jets; Falcon 7X executive jet and Hawker 4000.

Currently, both aircrafts are still unsold, more than 16 months after the advertisements on national dailies.

Both aircrafts were declared for sale in October 2016 by the presidency as a show of cost-saving strategy for the government.

However, emerging details revealed that the preferred bidders for the two jets failed to put paid to their bids of $24m due to scarcity of forex which choked the economy throughout 2017.

However, the scenario forced the bidders to reappear on expiration of the deadline to change their originally agreed amount for the jets by attempting to make a payment of $11m for the two aircrafts which was rejected by the sales advisor.

A reliable source close to the reserved bidder told Business Hilights in a telephone interview on Sunday that “Actually all of us that took part in the bidding process were satisfied on the process, but you know, the issues that followed access to forex throughout last affected the capacity of even the preferred bidder to pay up”.

“We are still interested if the presidency will advise the sale advisor to consider reduction of the price considering the hiccups is accessing forex in the country now.

“Like I told you earlier, majority of the bidders then were Nigerian concerns and we were ready until forex access becomes something else,” the source noted.

However, while confirming the embarrassing development, Senior Special Assistant to the President on Media and Publicity, Garba Shehu, noted time for sharp practices in buying government assets had gone as “No one would be allowed to take a public asset and run away for nothing”.

According to him, both presidential jets are still up for grabs as they are still available for serious buyers and the presidency has not changed its mind in selling them to cut costs of maintenance.

Shehu said, “The Presidency is still determined to carry out President Muhammadu Buhari’s directive that the presidential air fleet should be reduced, so the process to trade the Falcon 7X (5N-FGU) and Hawker 4000 (5N-FGX) to anyone interested is still ongoing.

“What happened over this period of time is that the preferred bidders, who emerged at the open and transparent process, refused to come forward with the payments.

“The one who came closest to the reserved price of $22m for the Falcon won with an offer of $21m.

“The Hawker had a reserved price of $2m but the winner offered a higher bid of $3m.

“As you can see, the bid amounts put together promised to return the projected sales figure of $24m.

“Unfortunately, they both reneged when asked to come forward with payments. The winner of the Falcon offer said they had only $10m and the others who came for the Hawker said they could only pay $1m.

“Now, that, to say the least, is completely absurd. They probably thought there was desperation here or some sort of deal could be cut in line with old practices in government.

“This is a Buhari administration. Nobody will take public assets and run away for nothing.

“So the aircraft are still there for any serious buyers.”

Another source revealed that while the Falcon is not idle, otherwise, it is still in use by the presidency, the Hawker is no longer in use anywhere in the world.

According to him, none use of the Hawker is not a Nigerian problem; most countries of the world have stopped that type of aircraft from flying. That’s why it’s being offered for about $2m.

Business Hilights recalls that the Presidency had said the PAF had 10 aircraft at the inception of this administration in 2015.

They include Boeing Business Jet (Boeing 737-800 or AirForce One), one Gulfstream 550, one Gulfstream V (Gulfstream 500), two Falcons 7X, one Hawker Sidley 4000, two AgustaWestland AW 139 helicopters and two AgustaWestland AW 101 helicopters.

However, some of the jets in the fleet have since been handed over to the Nigerian Air Force to boost its operations.

Details from the yet to be passed 2018 Appropriation Bill indicate that the Federal Government will spend N1.4bn on the maintenance of presidential jets this year as captured in the budget of the PAF-State House.

The PAF will also spend N398m on aviation fuel; N196m to overhaul the landing gear of Presidential BBJ Aircraft while N222m will be spent to overhaul the engines of Falcon 7X (5N-FGV).

Besides, N375m will be spent to install new cabin management system on GV (5N-FGS) while N350m will be spent to comply with mandatory upgrades on PAF aircraft.

Also, another N240m will be spent on compliance with the mandatory upgrade and installation of Internet service on G550 (5N-FGW) and another N200m for the mandatory upgrade and installation of live TV and Internet service on BBJ (5N-FGT).

There are indications that the lawmakers may cut down on the budget as two of the 10 aircrafts are already on sale.

About Business Hilights

Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.
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