Monday, 4 November 2013
A Full Transcript of STELLA ODUAH'S DEFENSE
PRESENTATION BY THE HONOURABLE MINISTER OF AVIATION, PRINCESS STELLA ODUAH, OON AT THE PUBLIC HEARING ORGANISED BY THE HOUSE OF REPRESENTATIVES COMMITTEE ON AVIATION HELD AT HEARING ROOM 0.28, HOUSE OF REPRESENATIVES ON 31st October, 2013
Honourable Members of the House Committee on Aviation,
Gentlemen of the Press,
Distinguished Ladies and Gentlemen
1.1. Let me first and foremost apologise for my inability to honour your invitation to appear before you on the first two days the public hearing held. My non appearance was not borne out of disrespect to this Honourable House. Let me also thank the Honourabe Committee for graciously rescheduling my appearance to today.
1.2. The invitation to appear before this Honourable Committee was brought to my attention while I was on national assignment far away in the State of Israel to conclude negotiations on a Bilateral Air Service Agreement (BASA) on behalf of our dear country with the State of Israel. I received the invitation with relief and gratitude to God because of the promise of the opportunity it would afford me for Nigerians, and indeed the whole world, to hear me out and set the record straight.
1.3In the last few weeks, I have received all sorts of bashings in the media. Many persons have also risen to my defence. Many have abused me, some out of a genuine sense of outrage that I allegedly spent the sum of USD1.6 Million of government funds to purchase for myself 2 nos bulletproof BMW Cars for my personal use.
1.4 You may recall that there have been attempts at clarifying issues pertaining to this particular procurement. In the process, some of the issues were further muddled up. I mention in this regard the first attempt at clarifying the issue by the Coordinating Spokesperson for the parastatals when he was first confronted with the allegation, without recourse to the Minister or the Principal Officer of the Ministry and its Agencies, described the information as a mere rumour.
1.5. This was followed by the statement of my S.A Media who was himself guided by his own perception of the duties and challenges of my office and possibly, even the danger to the person and office of the Minister. This is made evident by the fact that his statement focused on my personal security and safety without recourse to procurement process and policy file to which he had no access.
1.6 Although both inaccurate and innocently misguided, I understand the urgency and aggression considering the sources the information was breaking from.
1.7. The last official intervention in this matter came from the Director General of NCAA, the agency charged with the oversight of the aviation sector and the agency that actually undertook the procurement. Whereas the DG was right in saying that the vehicles were not bought for my office, the anticipated positive effect of this correct piece of information was marred by remarks credited to the DG suggesting that the agency was more concerned about issues of administration and information security that had no bearing on this issue. In this regard, we must bear in mind that the DG was very likely guided by his concerns about other types of information the NCAA receives such as critical airworthiness and other commercially sensitive information which the Civil Aviation Act mandates the NCAA to protect.
1.8Let me therefore state emphatically for the records that there was no attempt to either deliberately mislead the public or conceal any information regarding this transaction; and also to formally apologise for whatever tension or perception of same as a result of the foregoing. On that note therefore, I stand before you and make the foregoing clarifications.
1.9. The second category of commentators are the entrenched interests in the aviation sector, who for over 38 years have held the sector by the jugular and refused to allow any meaningful development and change to take place. For the over 38 years that our airports were a damning commentary on our status, even when our airspace existed without the requisite navigational equipments and facilities to make the airspace safe; this group of persons saw no evil and heard no evil. Under the leadership of Mr President and the overwhelming support of the National Assembly, my team and I have changed the game in favour of Nigeria towards attaining her pride of place in the aviation world.
1.10 It is for the first category, the Nigerian people who have acted out of a genuine sense of patriotism, that I seize this opportunity to let the world know the truth surrounding this matter. For the second category, that is the entrenched, corrupt and profligate individuals and entities who have caused the serious rot in the aviation sector, I owe no apologies.
1.11 Honourable Chairman, my initial enthusiasm was almost doused when I became aware of what transpired when the Permanent Secretary of the Federal Ministry of Aviation appeared before the Honourable Committee as my representative, with a letter conveying my regards and requesting to present the position of the Federal Ministry of Aviation. I have it on good authority that after his appeal and the presentation of my letter, he was, in the words of some newspaper headlines, “walked out of the House”.
1.12 I cannot in any way challenge the wisdom of the Honourable Committee for walking him out. However, had he been allowed to present the Ministry’s position, the truth about this matter would have been known in the first instance.
1.13 I believe that it was one of those moments when, the false accusations and my trial in the media, had affected the sense of outrage of the Honourable members as citizens of our great nation. Fortified in this knowledge of the fairness of the Committee, I prepared my presentation knowing that the Honourable Committee will continue to treat me fairly and afford me the opportunity to present it to the Nigerian people without let or hindrance. My humble appeal is that the Honourable Committee will discountenance the blatant falsehoods that have been peddled against me in the media and patiently hear my side of the story.
2.0 The Allegations Against Me
Honourable Chairman, as you are all aware, what necessitated this public hearing were the events that followed a false and malicious online publication that I had compelled the NCAA to purchase for me 2 nos BMW bulletproof cars at the cost of USD1.6 Million. Let me state emphatically from the onset that the allegation concerning the purchase of 2 nos bulletproof cars for me by the Nigerian Civil Aviation Authority (NCAA) is false in its entirety. Sadly, other than the conjecture, the publication has not supported this inflammatory statement with any rational basis. As a matter of fact, their justification and confirmation which they brandish is nothing but the erroneous responses of my aides.
3.0 Matters Arising from the Lease Financing Arrangement for Operational Vehicles by the NCAA
3.1.0 Did the NCAA Spend Monies Not Approved by the Appropriation Act, 2013?
3.1.1 Honourable Chairman, the NCAA, as a result of the daily interaction with the law in its regulatory and enforcement roles, is at all times and in all matters conscious of its obligations of complying with the law and all extant rules and regulations of the Government. The NCAA is therefore conscious of its obligations relating in particular to appropriation and will never spend monies that have not been appropriated by the National Assembly.
3.1.2 It is in this regard, therefore, that the NCAA, within the framework of the Medium Term Expenditure Framework (MTEF) approved by the National Assembly as a planning tool, planned its budget with regard to acquisition of operational and other security and safety vehicles for the next three years in a manner compliant with Section 80 (4) of the Constitution of the Federal Republic of Nigeria, 1999 (as Amended), that prohibits the spending of monies from any fund of the Federation except as appropriated by the National Assembly.
3.1.3 The media has been awash with the purported spending of monies by the NCAA to the tune of USD1.6 million, N255 million and other figures on the purchase of vehicles by the NCAA. Honourable Chairman, IT IS NOT TRUE THAT THE NCAA HAS SPENT SUCH AMOUNT OF MONEY ON PURCHASE OF VEHICLES. It is also NOT TRUE THAT THE NCAA HAS PURCHASED 2 BULLETPROOF BMW VEHICLES FOR THE HONOURABLE MINISTER OF AVIATION.
3.1.4 Honourable members, as pointed out above, my understanding is that what the NCAA has done, is to plan for the acquisition of vehicles for next three years within the MTEF through a LEASE FINANCING ARRANGEMENT with First Bank Plc. Under this arrangement, NCAA would have paid N100 Million by the end of fiscal year 2013. The sum is below the appropriated amount of N240 Million and LESS than what is required for FEC approval. It would appear that what the NCAA has done within the framework of the MTEF and its desire to be prudent, is to plan its budget in a manner that the cash flow of the Authority is able to accommodate spending.
3.2.0 Justification for the Lease Financing of the 2 Nos BMW Cars
3.2.1 Honourable Chairman, the NCAA owes its very existence to the benevolence and wisdom of the National Assembly expressed through the promulgation of the Nigerian Civil Aviation Act, 2006. As the regulator of the entire aviation industry, the NCAA, pursuant to powers granted under the Civil Aviation Act, 2006 makes and enforces Regulations towards ensuring safety and security of Nigeria’s airspace. The NCAA in addition, plays a pivotal role in carrying out Nigeria’s international obligations and responsibilities. Our role in the Ministry and under the law is what I have carried out which is to support this from a policy and execution standpoint only.
3.2.2 NCAA has performed with distinction over the years ensuring that Nigeria currently has attained the coveted Category One certification of the U.S FAA; Nigeria is currently a member of the ICAO Council with the strong probability that a Nigerian may emerge the President of the ICAO Council in a matter of days, hopefully by the end of the month of November, 2013 and on the 6th of December, 2013, both the outgoing President and incoming President of ICAO will be in Nigeria. The aggregate of the various victories of Nigeria in the international arena, including the re-election of Nigeria as a non-permanent member of the UN Security Council, is that Nigeria is increasingly readdressing the negative perceptions about our nation.
3.2.3 The important thing about this certifications is that it naturally requires the same, and sometimes higher levels of performance to maintain. This is a matter of long term, continuous planning, and seamless execution, which includes acquiring the right assets, tools, equipment and people. The inadequacy and unreliability of NCAA existing operational vehicles in part, due to old age and depreciation should necessitate the acquisition of the new ones. Furthermore, with the appointment of a new Director General, restructuring of the agency, the need for additional operational tools, including vehicles became imperative. Moreover, the fact that NCAA, as the regulator of the industry, often plays host to dignitaries from ICAO and a host of other international and regional organizations made it imperative to have various specifications of operational vehicles including the purchase of the 2 nos security/safety vehicles. Certification is a continuous exercise in aviation and surveillance is a daily part of the operations of the NCAA.
3.2.4 As pointed out above, Nigeria is an important player in ICAO circles and Nigeria’s emergence as a member of the General Council has increased the expectations in international aviation. Most importantly, the expected emergence of a Nigerian as the President of the General Council of ICAO will make Nigeria one of the most significant destinations for actors in the international aviation sector. This will place additional burdens on us as a nation.
3.2.5 Perhaps, these are the factors that the NCAA considered in planning for the acquisition of the different specifications of vehicles through a Lease Financing Arrangement. It is customary and obligatory that we ensure the security and safe passage of all our international guests, when they visit. Aviation, as well as other security, require proactive and preventive measures.
3.2.6 It will not be in the interest of our nation for any of the events above to occur and ought to be avoided at all cost. The NCAA acted with the highest patriotic consideration within the ambit of the Law and the Constitution.
3.3.0 Did NCAA Purchase 2 Nos Bulletproof Vehicles for Me as the Honourable Minister of Aviation?
3.3.1 Honourable members, another falsehood in the public domain relating to this Lease Financing Arrangement is that the NCAA purchased two bulletproof vehicles for me as the Honourable Minister of Aviation. This is TOTALLY FALSE. The 2 nos security/safety BMW vehicles which the NCAA acquired are for security and safety as appropriated by the NASS in the 2013 budget in Item 6. The title documents which are in the names of NCAA/FIRST BANK PLC, as well as spare keys of all the vehicles purchased under the lease financing arrangement are currently with First Bank of Nigeria, Plc as is the case with such arrangements and best practice.
3.3.2 Honourable Chairman, in addressing the issue of authorization by the NASS as contained in Item 6 of the budget, we invite your honours to consider the narration. In the narration, your honours will observe that the 2 nos security/safety vehicles are provided for distinctively. They are separate from the other vehicles listed. The legislative process, including the process of appropriation, involves a lot of explanations by the beneficiaries of legislative powers in that regard, but when the explanations eventually find merit and is passed, all that happened preceding the passage of the Law may not be a necessary recall.
3.3.3 Your Honours, I draw attention to this fact because of the erroneous belief in some quarters that, because in the course of the NCAA defending its budget proposal for 2013, it had to return to the NASS a few times to explain their proposal, therefore the purchase was never appropriated. This may not be totally correct as 2 nos security/safety vehicles were provided for.
3.3.4 There was nothing in the approved documents reflecting my name, when the budget was being made. At no time did I ever request for any vehicle from the NCAA. It was the agency that had the need and made the request to the Federal Ministry of Aviation. After the purchase on a 3 year Lease Financing arrangement, the vehicles were never delivered to me. The vehicles were also not registered in my name but that of the agency. All I did was to approve the request of the Agency subject to the Agency doing the needful as evidenced by my minutes on the letter dated 15th April, 2013.
3.3.5 Honourable Chairman, on the procurement procedure for the lease arrangement for the acquisition of the vehicles, let me reiterate that from the records available to me, it would appear that the NCAA followed the due process required by law. As we gather here today, I have been made to understand that there exist no guidelines issued by the Bureau for Public Procurement (BPP) on lease financing.
3.3.6 Despite this lacuna, the NCAA determined to ensure fair participation invited all the Banks in Nigeria to bid for and or express interest in the transaction. The Federal Ministry of Aviation under my watch has always been mindful of the need to ensure that we act in a prudent manner and within the ambit of the law and this can be testified to by the tremendous transformation that has occurred in the sector in the last 2 years.
3.3.7. Specifically, I wish to draw the attention of this Honourable Committee to the procedure adopted by the NCAA in procuring the operational vehicles:
i. On the 15th of April, 2013 an official letter was written by the NCAA requesting for approval to procure operational vehicles through Lease Financing. The NCAA’s letter is annexed herein as Annexure FMA “2”.
ii. On the 25th of April, 2013 approval was conveyed to NCAA for the acquisition of operational vehicles through Lease Financing. The letter annexed is Annexure FMA “3”.
iii. On the strength of the above letter of approval, the NCAA got the list of all Banks in Nigeria on 7th May, 2013 and circulated a Request for Expression of Interest on the financing of the lease. The letters to all the Banks requesting for Expression of Interest (EOI) are annexed as Annexures FMA “4 – 22”.
iv. On 24th May, 2013 the Request for Expression of Interest (EOI) was publicly opened. Three Banks submitted proposals.
v. The Evaluation of the Expression of Interests was held on 31st May, 2013 during which First Bank Plc, Union Bank Plc and Stanbic IBTC responded.
vi. On the 10th June, 2013 the above three banks were invited to submit Financial Proposals. Thereafter, First Bank of Nigeria, Plc emerged the highest rated responsive bidder.
vii. Between 20th and 25th June, 2013 NCAA received invoices from various accredited motor vehicle dealers during which only Coscharis Motors Limited quoted for BMW Bulletproof Vehicles. Copies of the invoices are attached as Annexure FMA “23 - 42”.
viii. On 28th June, 2013 NCAA Parastatal Tenders Board approved the selection of First Bank of Nigeria, Plc for the Lease Financing as well as Metropolitan Motor Vehicles and Coscharis for the supply of the vehicles. This approval was predicated on the due process documentations done by the NCAA.
ix. On 1st July, 2013 the NCAA sought the approval based on the invoices and the final negotiations with the financing Banks.
x. Based on the outcome of the negotiations as contained in the invoices from the Banks, on 5th July, 2013 I conveyed the approval of the Federal Ministry of Aviation. The letters dated 5th July, 2013 is annexed as Annexure FMA “43”.
xi. I am aware that between 8th July, 2013 to 12th August, 2013 various meetings were held with First Bank of Nigeria, Plc and necessary documentations were carried out. A copy of the Letter of Offer of Credit Facility containing the terms of the relationship dated 30th July, 2013 is attached as Annexure FMA “44”.
xii. On 13th August, 2013 the suppliers of the vehicles were contacted at the instance of First Bank of Nigeria, Plc.
xiii. It is my understanding that by the end of this year, the total amount to be paid by NCAA to First Bank of Nigeria, Plc will be 100 Million Naira only based on an understanding the NCAA has with the Bank and the balance of 16 Million Naira only will be paid in the following year.
xiv. It is also my understanding that the deal between the NCAA and First Bank of Nigeria Plc which came to a total sum of N643M is a mere understanding and not an obligation that is why it is included in the Medium Term Expenditure Framework which could be called off in the event that the two parties decide to discontinue hence all title documents are in the joint names of NCAA and First Bank of Nigeria, Plc.
xv. It is my understanding that by the end of this year, the total amount to be paid by NCAA to First Bank of Nigeria, Plc will be 100 Million Naira only based on an understanding the NCAA has with the Bank and the balance of 16 Million Naira only will be paid in the following year.
3.3.8. The Honourable Committee may wish to confirm that the NCAA sent out Expression of Interest (EOIs) to the following banks:
1. Sterling Bank Plc
2. Zenith Bank Plc
3. Keystone Bank Limited
4. Access Bank Plc
5. Diamond Bank Plc
6. Skye Bank Plc
7. Standard Chatered Bank Nig Ltd
8. Mainstreet Bank Limited
9. Union Bank of Nigeria Plc
10.Unity Bank Plc
11.Fidelity Bank Plc
12.Guaranteed Trust Bank Plc
14.United Bank for Africa Plc
15.First City Monument Bank Plc
16.First Bank of Nigeria Plc
17.Wema Bank Plc
18.Citi Bank Plc
19.Equitorial Trust Bank Limited
20.Enterprise Bank Plc
21.Stanbic IBTC Plc
22.Heritage Bank Limited
3.3.9. Your Honours, ladies and gentlemen, our nation is at a cross road in its history. The transformation agenda of Mr. President has changed our ways of doing things significantly. Mr. President recognized the infrastructural deficit in our nation and has taken very bold steps to address this and in order to bequeath to the next generation a nation that can compete favourably in the comity of nations and imbue our next generation with pride and patriotism.
3.3.10. The massive investment and the aggressive implementation of this agenda have seen the aviation sector being transformed. Today, 22 Airports owned by the Federal Government are at various stages of becoming decent and world class terminals. Nigeria’s airspace is now rated among the safest in the world with the deployment of modern navigational equipments and infrastructures. The capacity of the whole sector has been strengthened with the relevant regulations in place and the training and retraining of personnel. Our National Aviation Policy has been reviewed to chart the path to a safer sector. The plan to give Nigeria a national carrier is at an advanced stage of implementation. The desire to create an aviation sector that is self sustaining is being pursued aggressively.
3.3.11. Conversely, efforts to bring change to the aviation sector are being resisted by entrenched interests that have been ripping off the nation. We have had to put our foot down in order to halt the rape of our national patrimony. We have had to confront forces that have held the sector hostage. My team and I will not fold our arms and complain and not lift a finger to do anything. We dared to act; we have indeed acted, convinced that it was in the national interest to do so.
3.3.11. We are not at our destination yet, but witnesses to the rot of yesteryears are now proud of the ongoing transformation in the sector. What we are doing in the sector, together with the effort in other equally important sectors, have given hope to the mass of our people that we can do something, apart from complaining, about the decay in our national life.
3.3.12. Towards this end, the purveyors of the rot and corruption that has characterized the sector have continued to fight back every inch of the way. The latest false and wicked allegation of purchase of 2 nos bulletproof cars for me by the NCAA is one of such fights to discredit my team and give the impression that our reforms lack credibility. But we assure them that Nigerians now know better.
4.1 Honourable Chairman and members, we have made all of these explanations because we believe that the essence of this hearing is to confirm whether we acted responsibly and in the best interest of our nation and within the framework of the Constitution and the Law. We believe that all of this is meant to make our nation and her citizens have the best value for whatever money is appropriated and spent. It is in this belief and our duty under the Law and the Constitution that we have placed all materials involved in this transaction before you in order that you may be able to arrive at a fair and just determination in the larger interest of our people.
4.2 We reiterate that NCAA has not spent any money not appropriated by the National Assembly. Indeed what they have spent so far on ALL the vehicles acquired through the Lease Financing Arrangement with First Bank of Nigeria Plc is N52,000,000.00 (Fifty Two Million Naira only). By so doing, they have saved the nation cost and the possible embarrassment that may arise if the events we have pointed out earlier were to occur.
4.3 We further reiterate that the NCAA DID NOT purchase 2 nos bullet proof vehicles for me as the Honourable Minister of Aviation. We reiterate that the NCAA purchased 2 nos security vehicles for the operations of the NCAA in line with monies approved for the NCAA under the Appropriated Act passed by the National Assembly.
4.4 Thank you for the opportunity afforded me to make this presentation and for your patience in listening to us.