Business Hilights
Tracking Nigeria's Headline Business News Online

Terms default stalls $20m re-fleeting exercise for NCAT’

Issues bordering on whether due process was followed or not in the award of contract to acquire 20 new training aircraft for the Nigerian College of Aviation and Technology (NCAT) at the sum of $20million are now frustrating the scheme.

According to the Chief Executive Officer of Interjet Nigeria Limited, Seun Peters for a long time since 2005, the agency has been trying to re-fleet its aircraft because what they had were very old aircraft. They had gone to several aircraft manufacturers like Bell, Cessna Aircraft and all over United States, but their research kept leading them back to Diamond Aircraft in Austria, because we have the safest aircraft and the most easy to maintain. Interjet Nigeria Limited is their authorised representative in West Africa.

Sometime in 2013, they approached Diamond directly to say that they wanted to buy from them. That was during the time of the immediate past rector of NCAT. Diamond, however, referred them back to us (Interjet) as their representative. More so, we are based in Nigeria.

They contacted us again in 2014 saying they have gotten approval from the Bureau of Public Procurement (BPP), and a letter of award issued to us. We believed they were being proactive and it is not our business to ask whether or not they got presidential approval. The letter just stated that we have been awarded the contract.

The actual figure of the award is $20million for 20 aircraft, split in four tranches; 15 of the DA40 and five of the DA42. It was supposed to be five aircraft delivery every 12 months because production takes between five to six months.

Peters added that “even in the BPP’s letter, it was stated that we were agents to Diamond. We were not an emergency company that just surfaced or a middle-man company. We represent Diamond as their authorised agent”.

We were given the contract but there was a lien on the part payment of 15 per cent. It was not until after the presidential approval in April 2015 that the money was released to us. Meanwhile, we had placed the order in November 2014 for production. Aircraft is not like cars that you just pay and collect; it has to be produced on request. Production lasts between five to six months. We placed the order and they have started the production of five aircraft – three DA40 and two DA42, while we made the down payment to them based on what we were paid by NCAT.

On the way forward to the crisis, peters said “We want specific performance of the contract signed. We want NCAT to pay all that is due because we are owed now about 85 per cent of the sum. The first five aircraft should have been delivered since last year, if they had paid us. In event that they fail to comply with the terms of the agreement, we may have to resort to legal action”.