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General News | Apr 19, 2004

Govt Challenged Over Sale Of Controversial Jet

Joy

Minority Leader in Parliament Edward Doe Adjaho has challenged government to explain the nature of the obstacles allegedly put in its way by Gallen Limited in relation to the controversial Gulfstream III Presidential Jet.

The lease agreement between government and Gallen Limited represented by HSBC Bank PLC expires this week, and according to the Press Secretary to the President Kwabena Agyepong government will go ahead to sell off the plane.

The plane acquired in 1999 by the NDC administration has been the subject of controversy with the New Patriotic Party concluding that the transaction was shrouded in secrecy. There have also been suggestions of malfeasance amidst arguments about the appropriateness of setting up Gallen Limited an offshore company based in the Cayman Islands.

The NDC administration chose for whatever reasons including unavailability of funds to lease the 14-seater jet by setting off Ghana's Peace Keeping account as security. A down payment of $2 million was made on the lease with a commitment to pay $1.5 million semi-annually over a five-year period. An outright purchase of the jet would have cost the state in excess of 16.5 million dollars according to former finance minister Kwame Peprah.

The 1999 lease agreement gave government the option to own the Gulf Stream after five years. But having opposed the purchase of the jet while in opposition, Ghanaians were expecting the NPP in government to immediately dispose off the jet. The administration has however not been able to do so with a few months to go before the end of its current term of office.

Details of correspondence between HSBC Bank which arranged the financing and the NPP administration indicates that government was at an early stage updated on the nature of the agreement. Government had the option to sell off the jet, as far back as 2001 with HSBC submitting to government on its own prompting a draft Sales Agency agreement to ensure a speedy disposal of the jet, which was the wish of the government team that met with the bank.

The Attorney General Papa Owusu Ankomah said in January this year that four companies had put in bids for the aircraft. With days to the expiry of the lease agreement, Presidential Spokesman Kwabena Agyepong says attempts by the government to opt out of the lease agreement were resisted by Gallen Limited, which had the right over the security deposit.

Mr. Agyepong (who had earlier accepted to speak) later declined to speak to JoyFM to explain the nature of the impediments, but the Minority Chief Whip Edward Doe Adjaho argues that government has some explaining to do.

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