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Foreign creditors may impound Buhari’s presidential jets over huge debts

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 Foreign creditors may impound Buhari s presidential jets over huge debts

Aircraft in the Presidential Air Fleet are at the risk of being impounded by foreign creditors, Punch has reported. 

Findings indicated that the PAF was indebted to several service providers for various upgrades carried out on the 10 aircraft in the fleet to meet the required airworthiness.

The PAF provides secure airlift to the President, the Vice-President, their immediate families and other top government officials.

However, due to inadequate funding, it was gathered that some installations on the aircraft had again been postponed to 2023.

The PAF Commander, Air Vice Marshal Abubakar Abdullahi, who stated these in his budget defence presentation at the National Assembly, also complained that only N1.5bn was allocated for the maintenance of the aircraft out of the proposed N4.5bn.

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It was earlier reported that the budgetary allocation to the PAF had risen by 121 per cent in eight years.

Findings indicate that the President Muhammadu Buhari (retd.), had since 2016 allocated N81.80bn for the PAF maintenance and foreign trips.

The amount includes N62.47bn for the operation and maintenance of the PAF, N17.29bn for foreign and local trips, and N2.04bn earmarked for other related expenses.

The Presidency has maintained 10 aircraft since the inception of the Buhari regime in May 2015.

They are Boeing Business Jet (Boeing 737-800 or NAF 001), one Gulfstream G550, one Gulfstream V (Gulfstream 500), two Falcons 7X, one Hawker Siddeley 4000, two AgustaWestland AW139 helicopters and two AgustaWestland AW101 helicopters.

Though Buhari promised to reduce the size of the fleet as part of his pledge to cut the cost of governance, checks revealed that his regime had failed to live up to this promise.

However, the National Security Adviser, Maj. Gen. Babagana Monguno (retd), delivered the two AgustaWestland AW101 VIP helicopters in the presidential fleet to the Air Force.

But addressing the House Committee on National Security and Intelligence during the budget defence session, the fleet commander explained that the average age of the PAF aircraft was 11 years and in aviation, the cost of maintenance increases proportionally with the age of the aircraft.

Based on the fleet’s experience, Abdullahi explained that the cost of maintaining each aircraft was between $1.5m and $4.5m, depending on the level of maintenance due.

Additionally, the commander revealed that 2023, being an election year, would translate to more missions and spares’ requests for the aircraft due to increased usage.

He also told the lawmakers that the N250m approved for aviation fuel out of the requested N4bn was grossly inadequate; reminding them that aviation fuel, which sold at an average cost of N390 per litre in January, was now being dispensed at N915 per litre.

The fleet commander argued that the N8.072bn allocated for the fleet in the 2023 budget out of the proposed N15.5bn was inadequate to cater for the needs of the fleet.

He, therefore, pleaded for an upward review of the budget.

In the 2022 budget, the PAF proposed N19.4bn, but only N12.4bn was appropriated out of which N11.13bn (98.07 per cent of the total approval) had been released as of October.

Abdullahi stated, “It is pertinent for this honourable committee to note that for successive years, the fleet has been grossly underfunded, which has made it difficult to operate. From the fleet’s records, debts from preceding years are usually carried over into the following budget year and it is becoming a tradition.

“Permit me to also state that most of these debts are owed to service providers overseas. Considering that over 85 per cent of the fleet’s expenditure is forex transactions, the actual budget figure in dollar terms is further diminished.

“The fleet is currently indebted to some of its service providers due to insufficient funding from budgetary allocations and the situation makes it bad for planning. As stated earlier, we currently have to have some mandatory upgrades done on our aircraft so as to meet airworthiness requirements.”

Highlighting the aircraft upgrades that had been paused due to paucity of funds, the air vice marshal disclosed that two of the fleet’s Falcon 7X aircraft with registration number 5N-FGU and 5N-FGV were due for upholstery refurbishment to give the 11-year-old planes a new look.

Abdullahi added, “They are projected for refurbishment in their next maintenance due in December 2022 and July 2023, respectively, which will cost $2.5m each. Furthermore, the fleet’s personnel and aviation insurance premium for the year 2022 amounting to $5.1m is also due for renewal in February 2023. The fleet may not be able to fund these due to a shortfall in the budget.

“The consequences of underfunding the fleet could have adverse effects on safety operations. It may also lead to our nation being embarrassed in the international community either through seizure of the PAF aircraft at foreign airports or maintenance facilities. Moreover, other states may deny the PAF aircraft necessary over-flight permits for foreign missions.”

The senior air force officer noted that aircraft maintenance accounted for 46 per cent of the overall budget proposal and was integral to the overhead cost, adding that the shortfall in the overhead greatly affected aircraft maintenance activities in the fleet.

From the releases made so far, 14 capital projects out of 22 line items were said to have been completed 100 per cent, while the remaining eight are ongoing.

In its 2023 overhead estimates, the fleet plans to spend N1.5bn on aircraft maintenance; N256m on international travels; N200m on international transport and training; N96m on electricity; N160m on refreshment; N100m on maintenance of office and residential buildings; N28m on local travels; and N25m on local training, among others.

The fleet commander disclosed that some mandatory upgrades were carried out on credit based on the fleet’s longstanding relationships with the maintenance companies, while others have been moved to the 2023 budget.

He stated, “This committee may wish to note that the quality of aircraft maintenance conducted is directly proportional to flight safety and its critical importance cannot be emphasized.

“The fleet is mindful of the meagre financial resources in the face of competing national demands. Thus, be assured that this budget is on a need-only basis. Nonetheless, if the fleet is to meet up with its statutory obligation, there will be a need for the budget appropriation to be reviewed upward to meet PAF’s requirements.”

Commenting on the PAF’s indebtedness to foreign service providers, the Chief Executive Officer, Top Brass Aviation, Captain Roland Iyayi, said the presidential jets were seen as sovereign entities of Nigeria, noting that it would be difficult to seize them.

“I don’t know if that will be easy enough; if it was another asset of Nigeria, it is different, but a presidential jet; it’s like saying a country wants to seize the United States President’s aircraft over debt. It is considered an extension of the sovereignty of the state; so, that may not be as easy as it sounds,” he stated.i

Similarly, the Secretary-General Aviation Round Table, Olumide Ohunayo, said it would be difficult to seize the presidential jets because they were seen as diplomatic property.

He, however, noted that those who maintained the aircraft could refuse to release them if they were not paid for services rendered.

The aviation expert stated, “Aside that, you will need a top government official or the approval of the court where the aircraft has landed to remove the diplomatic immunity.

“In such a case, the government of the country where the aircraft has landed will be involved before a judgment can be taken. For a company to do that against Nigeria, it will also need the judgment of that country where the aircraft is. This cannot happen when the President or any government official is on a visit to another country. It can only happen when the aircraft is going for maintenance.”

Lawmaker reacts

The Deputy Chairman of the House Committee on National Security and Intelligence, Adejoro Adeogun, blamed the reduction in the PAF budget on the Federal Government’s envelope budgetary system, inflation, devaluation of the naira and the forex crisis.

Adeogun noted that most of the items needed to run the aviation business, especially aircraft, were being imported.

“If everything they are buying is in naira, it would have been easier. But they buy things in dollars. And the (exchange) rates are not stable. You can have 10 aircraft, then reduce it to five; it does not simply mean that your cost will reduce, because the cost of maintenance of the aircraft may keep increasing,” he said.

 

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