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22.05.2006 General News

Govt Trades Off Gulf Stream Aircraft

The controversy surrounding the disposal of the Gulf Stream GIII aircraft which was hanging over the government like an albatross has now been resolved.

The resolution follows the government's acceptance of an offer from the China National Aero-Technology Import and Export Corporation to trade in the Gulf Stream for four aircraft and a simulator for the Ghana Air Force.

The Ghana Air Force will receive four K8 military aircraft and a K-8 flight simulator.

According to a statement signed by the Minister of Information and National Orientation, Mr Kwamena Bartels, the Gulf Stream aircraft, which had been valued at US$5 million, would be used as down-payment for the four K-8 aircraft and the flight simulator.

It is significant to note that currently, the market price for an air-worthy Gulf Stream GIII aircraft in service is about US$6.5m, according to Conklin and de Decker, world-acclaimed and approved valuers in the aviation industry.

The aircraft is expected to be flown out to its new owners today. The Gulf Stream aircraft, which has been muddled in controversy for some time now, was bought by the National Democratic Congress (NDC) government for about US$16 million.

The United Nations (UN) Peacekeeping Fund for Ghanaian contingents on peacekeeping missions was used by the NDC government to guarantee and pay for the lease agreement between it and Gallen Ltd.

The lease agreement had the option for the government to own the aircraft after five years. The government then transferred $16 million from Ghana's peacekeeping accounts at the Chase Manhattan Bank of New York into the account of the United Kingdom branch of the Hong Kong Shanghai Banking Corporation (HSBC), acting on behalf of Gallen Ltd, to serve as security.

That arrangement, according to the former Press Secretary to the President, Mr Kwabena Agyepong, in the April 17, 2004 issue of the Daily Graphic, was “made possible by a rather strange arrangement which placed the security deposit outside the control of the Minister of Finance, an action which was in direct contravention of the country's financial administration regulations”.

Mr Agyepong further explained that attempts by the government to opt out of the lease agreement was resisted by Gallen Limited, which had the right over the security deposit.

When President J. A. Kufuor assumed office in 2001, he refused to use the aircraft and directed that it should be disposed of as soon as possible.

In April 2004, the five-year lease agreement expired and the government exercised its option of ownership over the aircraft by purchasing the lease for a regulatory price of $10,000, paving the way for it to dispose of the aircraft as it wished.