Why We Dropped  Lufthansa Consulting As Advisers For National Carrier – FG

By; SUNDAY ODE, Abuja
The federal government said Wednesday that it has dropped  Lufthansa Consulting  as a  member of the consortium that will provide transaction advisory services for the establishment of  a National carrier.
Minister of State, Aviation,, Hadi Sirika disclosed this  to State House correspondents after the federal executive council meeting presided over by President Muhammadu Buhari at the Presidential Villa, yesterday.
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He said Lufthansa Consulting will be subsituted with AMG (Airline Management Group) and Avia Solutions GE .
According to him ,Lufthansa Consulting was substituted because of conflicts of interest which may arise during the procurement process of the proposed national carrier.
He said “Today Council considered a memo from transportation regarding aviation. It was a memo that was brought to substitute a member of the consortium that will provide transaction advisory services for the establishment of National career.
” And that member of the consortium is Messers Lufthansa consulting. Council considered and approved that substitution with another company called AMG (Airline Management Group) with Avia Solutions GE to join the other members of the consortium to continue providing that the same cost of N341,200 million.
“On why we substituted Lufthansa Consulting, fundamentally there are two reasons. One, that particular member of consortium, Lufthansa Consulting, in the wisdom of the council we felt that consulting is an appendage of the airline group and that might bring conflict of interests.
” Because Lufthansa themselves may want to join, partner or help in the process during the procurement phase of this transaction. And of course they are members of Star Alliance, members of One World and members of Sky team, others may feel shortchanged the person advising us set up this airline  which is going to be private sector driven, is a member of an alliance which they are not part of.
Secondly, the minister argued that since the federal government  appointed the transactions advisers in various aviation projects in May 2017, about six of them, five of them have gone ahead-  construction of airport, aeropolise and MRO .
He said most of them have produced the outline business cases and they  are on their way to doing the full business case.
However,he said  Lufthansa Consulting, did not accept the offer neither have they signed any contract pointing out  that instead they countered the offer .
“One of the conditions the out is that we should pay them 75 percent of the total cost, which is against our procurement law, they also wanted us to change the contract from Naira to Euro, they also wanted us to open an Escrow account in an internationally recognized bank outside the country where the money will be domiciles etc.
“So we found that that was against our procurement law and we have been going back and forth for seven months to see whether they can accept the terms of conditions and even if they had done at a time and they didn’t uptill today, we couldn’t continue with them because it will compromise the system which we thought should be transparent.
“So that is why we sought the approval of council to substitute them why a neutral person and someone who will accept the terms and conditions given, to accept payment in Naira, to accept 15 percent payment of the entire cost as against 75 per cent etc,” he explained.