Leadership (Abuja)
Philip Nyam And Adesuwa Osunde
19 November 2008
Abuja — Managing director of NigComSat, Mr Ahmed Rufai, yesterday confirmed to the House that the failure of the N40 billion project is not a loss to Nigeria as it was insured 100 per cent even as he disclosed that NigComSat-1, which was acquired with a loan of 200million dollars from China Exim Bank, cannot be recovered.
While briefing the House Committee on Science and Technology on the status of the satellite, the management of Nigcomsat Ltd said the process of de- orbiting of the satellite had been concluded, stating that the N40 billion project has been damaged and cannot be recovered for use again.
In his recommendation to the committee, the managing director requested the committee to convince the Federal Government to approve the commencement of the build of a replacement for the lost satellite to be named NigComSat-1R and discuss with the Chinese government and the satellite manufacturer, CGWIC on the reassignment of an emergency satellite with technical specifications similar to NigComSat-1, either in orbit or in an advanced stage of manufacture.
He also urged the committee to ask the Federal Government to approve the utilisation of 500 million dollars China Exim Bank Concessionary loan for Nigcomsat and 3 advanced series for back up and expansion and the bulk purchase of bandwidth under a back up services agreement with an alternative satellite operator with footprints and powerful eirp as NigComSat.
Rufai told the committee that the incident was not a loss to Nigeria as the satellite was fully insured in accordance with industry standards with renowned international underwriters on a comprehensive coverage for total recovery arrangement.
"On Monday, November 9, 2008 the process of de-orbiting was concluded and the satellite has now been manoeuvred to the parking orbit and cannot be recovered for use again".
"The incident is not money gone down the drain as being reported in some quarters and not a managerial problem. The loss of NigComSat has not stopped it from servicing its customers. A comprehensive coverage for total recovery was agreed with the insurers of the satellite.
"It is noteworthy that the loss experienced on Nigcomsat -1 is neither uncommon in the industry nor bizarre. Indeed, on the fateful day, a private satellite operator recorded six failures on six satellites. In fact, the industry records reveal a total of about 18 losses in 2008 alone. This informs the rationale for back up satellites and insurance as experts advise that a lone satellite is a decided gamble"..
We wish to state unequivocally that NigComSat-1 space craft is fully insured in accordance with industry standards by renowned international underwriters with proven integrity."
He informed the committee that the control of the satellite was still under the control of the Chinese contractual party(CGWIC) for an initial two year renewable period, adding that the situation was a condition for the launch and in-orbit insurance under a transition programme whereby control would be transferred to Nigcomsat.
Rufai stated that top representatives of China would meet with the company over the weekend before meeting with the ministers of finance and science and technology on Monday next week. He explained that an internal Crisis Management Team (CMT) is in place and is currently working with the manufacturers,CGWIC, the technical consultants, RD Miles, Canada and the underwriters to conclude the Fault Tree analysis and commence discussions on the insurance policy with a proposed business recovery plan presented under a short, mid and long term strategy at the top of proposal to be tabled.
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