PRESENTATION BY THE NIGERIAN CIVIL AVIATION AUTHORITY (NCAA) TO THE HOUSE COMMITTEE ON AVIATION AT A PUBLIC HEARING INTO THE PROCUREMENT OF OPERATIONAL SECURITY AND SAFETY VEHICLES HELD AT HEARING ROOM 028 ON THURSDAY, 24TH OCTOBER, 2013.
The Nigerian Civil Aviation Authority (NCAA) is the statutory regulator of the Nigerian Civil Aviation Industry. Consequently, the NCAA is charged with oversight responsibilities over all civil aviation operations in the country, including safety, security and strict compliance with International Civil Aviation Organisation (ICAO).Standards and Recommended Practices (SARPs) and Nigerian Civil Aviation Regulations (NCARS).
Towards the effective implementation of its statutory regulatory responsibilities, therefore, it is imperative that the NCAA is fully equipped with highly specialized tools and facilities, including adequate operational vehicles to cover all 22 national airports and over 400 airstrips. In keeping with standard practice, provision is therefore made annually for the replacement of obsolete, inadequate and unreliable monitoring equipment.
As a result of the inadequacy and unreliability of NCAA existing operational vehicle due to old age and depreciation it became necessary to acquire additional ones. Furthermore, the appointment of a new Director General, Directors, General Managers and other Management Staff, there was the need for additional vehicles. Moreover, the fact that NCAA,, as the regulator of the Industry, often plays host to dignitaries from ICAO, IATA, US, FAA, AFRAA, AFCAC, BAG, CANSO, ACI and a host of others made it imperative to have various specifications of operational vehicles.
To acquire the vehicles, lease financing was adopted. Lease financing is one of the ways of acquiring fixed assets in both public and private sector organisations. NCAA embarked on lease financing in line with prudential cash flow management. Leasing improves cash flow and enables an organisation enjoy an asset before fully paying for it. This approach minimizes the effect of initial capital outlay that occurs if outright cash purchase is embarked upon.
With regard to the procurement of additional operational vehicles including 2 nos. BMW Security Vehicles, the following due process was followed:
i.On the 5th of April, 2013, the need for additional operational vehicles was identified.
ii.On the 15th of April, 2013, an official letter was written to Federal Ministry of Aviation requesting for approval to procure the vehicles.
Iii.On the 25th of April, 2013, Federal Ministry of Aviation conveyed approval for the acquisition of the operational vehicles through lease financing.
iv. On the strength of the above letter of approval from Federal Ministry of Aviation, the list of all Banks in Nigeria was obtained on 7th May, 2013 and were circulated with a Request for Expression of Interest on the financing of the lease. EOI was adopted because the procurement is two sided. First, the financier would have to be selected before the supplier is determined. This is in line with procurement best practices.
v.On 24th May, 2013, the Request for Expression of Interest (EOI) was publicly opened and minutes of the opening exercise was documented. During the opening exercise NCAA got commendation from one of the Civil Society Organisations (CSOs) approved by BPP who were invited for the opening exercise.
vi.The Evaluation of the Expression of Interest was held on 31st May 2013 during which First Bank Plc., Union Bank Plc and Stanbic IBTC emerged responsive.
Vii.On the 10th of June, 2013, the above three banks were invited to submit financial proposals. Thereafter, First Bank emerged the highest rated responsive bidder.
Viii.Between 20th and 25th June, 2013 invoices were received from various accredited motor vehicle dealers during which only Coscharis Motors Limited quoted for BMW armoured vehicles.
ix. On 28th June 2013, NCAA Parastatal Tenders Board approved the selection of First Bank Limited for the Lease Financing as well as Metropolitan Motor Vehicles and Coscharis for the supply of the vehicles. This approval is predicated on the due process documentations so far done.
x.Between 8th June, 2013, to 12th August, 2013 various meetings were held with First Bank Limited, contract agreement was signed and necessary documentations were carried out.
xi.On 13th August, 2013, the suppliers of the vehicles were contacted on the instance of First Bank Nigeria.
In conclusion, we wish to point out to the Honourable members that:
*Payment for the vehicles is in 36 equal monthly installment out which only two has been paid as at 31st October, 2013. The payment per month is N23,249,181,00 (the Toyota and Armoured Vehicles inclusive) which will amount to N116,245,905.00 by the end of year 2013. This total is below the appropriation for the year..
*The procurement is tripartite transaction between NCAA, First Bank Nigeria and the suppliers.
*Furthermore, procurement of operational vehicles is provided for in NCAA 2013 Budget on line 6, page 10 and is line with NCAA Condition of Service.
*As at date, ownership title documents and spare keys of the vehicles are with First Bank of Nigeria and would only be transferred to NCAA after final payment.