Minister of Transportation, Rotimi Amaechi has disclosed the reason the much celebrated proposed national carrier, Nigeria Air was put on hold.
The Minister who made this revelation Thursday during a valedictory session with staff of the ministry and the media said the project was suspended because members of the Federal Executive Council (FEC) disagreed on the modalities for its establishment. He however added that the project has not been abandoned.
He said, “On national carrier, the cabinet is divided on the issue of modality. There are those who believe that the Federal Government should invest and then we can sell the equity later.
“There are also those who believe that no, and from day one they say let us get investors in and give them the franchise of Nigeria Airways or Air Nigeria or whatever it is called. That is where we are and that is what held it down. But as for whether it is still in our plan, it is and has not been abandoned.”
On another issue, Amaechi also disclosed that the Federal Government had requested a fresh $1.8 billion from the China Exim Bank for the construction of the coastal rail line.
He pointed out that the actual cost of the project was $2.3 billion while the government is to pay $500 million as counterpart fund.
He also disclosed that government was yet to pay any of the loans taken from the Asian giant even though full commercial operations had commenced on the Abuja-Kaduna rail corridor.
The Nigerian Railway Corporation (NRC) had announced an improved revenue generation of 400 per cent for 2018.
Amaechi also revealed that China has insisted that Nigeria opens a sinking fund and an escrow account in order to ease repayment of the loans for the construction of rail projects.
The Minister while emphasizing the need to heed to the suggestions made by the Chinese charged the Permanent Secretary of the Federal Ministry of Transportation, Sabiu Zakari to ensure that the Nigerian Railway Corporation (NRC) open the required accounts.
He said: “Permanent secretary, hold him (NRC boss) to that instruction. The instruction is that all the money you get from Kaduna-Abuja railway every month, put it in an account. Remove the cost of operation. Whatever remains, let us start paying back, let’s develop a sinking fund or an escrow account where we pay that money into.
“So that we can on our own start the payment before the Federal Government starts paying. Why I say this is because when we got to China, they insisted because of what they experienced with Kenya, Somalia and Sudan on their inabilities to pay back.
“They insisted that we must open two kinds of accounts; an escrow account and a sinking fund account. The sinking fund account will require that every year, we will put money there which is for the repayment of the loan, while the money for the management of that operation will be put in the escrow account.
“Nothing has been repaid for now but I gave them the instruction that the money be saved in the required account but I’m not sure it has been implemented up till now.”