Kwamena Bartels, the Minister instructed by the Chief Executive to instil into the public the right attitude of straight talking and transparency, failed the first test when he engaged in misleading the general public by telling them that the Gulf stream jet leased under the NDC government was meant to be part of the ex-gratia award of former President Jerry Rawlings.
Under pressure from searching questions from radio presenter Mr. Kwame Sefa Kayi of Peace FM yesterday, the Honourable Minister of Information and National Orientation flailed badly when caught on the hop by the minority leader Hon Alban Bagbin who was called concurrently to respond to allegations by Bartels.
Mr. Bartels seized on the issue of Australia House, which he added to the list of assets that were renovated at great expense under the NDC administration to be added to the ex-gratia awards of Jerry Rawlings.
The controversial Gulf Stream affair had attracted the attention of talk show presenters across most of the radio stations, including the leading ones like Gold FM, Joy FM And Peace FM which had Madam Mr. Ofosu Ampofo, Mr. Kweku Baako and Madam Ama Benyiwa Doe as panelists with the NDC women's organizer growing hysterical over Bartels fible peddling requiring restraint from the host Mr. Kwame Sefa Kayi.
Even the supportive Kweku Baako joined in condemning Kwamena Bartels for turning the truth on its head about the Jet being part of the awards of JJ, adding that as Minister of Information, he was not being helpful my engaging in such a level of misinformation.
On another station (JOY FM) Mr. Kwame Peprah, the man in the center seen as the culprit and last Minister of Finance in the National Democratic Congress (NDC) government, has stated that the transaction leading to the purchase of the Gulfstream GIII presidential jet was not complex, as the public is made to believe.
“I suspect the government has unraveled it, but it is because what they have unraveled does not meet their expectation that there must be something shady about the transactions, that its members still make noise about it,” he submitted.
Peprah, who had been on radio to explain away the deal following recent accusations that his government had handled the transaction in a complex manner and imputations of underhand dealings, told The Chronicle in a follow up interview that the New Patriotic Party (NPP) members of parliament then in opposition, led by Mr. J. H. Mensah, did their own due diligence when the matter came up.
According to Mr. Peprah, it was a misunderstanding Mr. Mensah had when HSBC referred him to the representative of their 'client', meaning the government of Ghana, which he mistook to be Gallen, that has clouded the understanding of government officials on the matter.
Tracing the genesis of the transaction, the former finance minister said the original owners of the Gulf stream GIII jet in 1998, Johnson and Johnson, wanted to upgrade their jet with a GIV, and so went to the manufacturers, Gulf stream in Savannah, Georgia, in the USA, who in turn informed their agents responsible for Europe, Middle East and Africa, Trans Air Incorporated in Geneva, about the availability of the jet.
He disclosed that through the networking of the agency, the Ghana Air Force identified it as suitable for a presidential jet, in view of the state of the then existing presidential jet.
According to him, it was after the Ministry of Defence had done the technical tests and recommended procurement of the jet that his ministry got involved to see how best to arrange for the financing for its acquisition.
Mr. Peprah said HSBC was one of the leading financiers of aircrafts, and they therefore approached them. He revealed that there were two financial options available to them: borrowing for an outright purchase; or lease purchase.
He further disclosed that the first option of borrowing could not be applicable because the state had then hit its non-concessional loan ceiling.
According to him, even if that option had been applicable, the cost of borrowing (interests) would have brought the total cost of the jet to the same level as the lease price.
On the use of the UN Peacekeeping account as collateral for the lease/purchase agreement, Mr. Peprah said as was evidenced at the time of the NDC leaving office, the account was never used in servicing the lease.
“It was never to be used; otherwise we would have bought it outright. We didn't have money to buy it outright,” he submitted, adding that that was why the account was there and earning interest even as payments were made from the budget.
He said collateral ensured a lower interest of .25% plus libor, leading to a savings of over 2.5% interest as the going rate at the time was libor plus 3%.
He said, “On the day that you to conclude the agreement, ownership had to change from Johnson and Johnson to Gallen to lease to the Government of Ghana.
However, Johnson and Johnson had no business dealing with Gallen, Trans Air or Government of Ghana.”
The former finance minister disclosed that this made it necessary for the plane to change ownership on that day, “from Johnson and Johnson to Gulfstream, who through their agent, Trans Air, entered into a sales and purchase agreement with Ghana, which was turned over to Galen, who then structured it as a lease agreement.”
“It is a legal necessity in that kind of financial transaction,” he emphasized, adding that these things cannot be hidden since aircraft transfers are codified and that was why this information was even available on the Internet.
According to Mr. Peprah, all payments made on the transaction were in line with the agreement sent to parliament.
The report of the finance committee of parliament had given the cost of the aircraft in February 2000 as follows:
Cost price - US$13,500,000 Provision for training of 5 pilots, 5 mechanics, spare parts and modification - US$3,180,000 Grand total - US$16,680,000
The terms of the lease provided for five years, during which government was to make semi-annual payments of US$1,500,000.
However, on the delivery of the aircraft, the first instalment was US$2,950,000, comprising a $1,450,800 down payment and the first semi-annual payment of $1.5million
On the expiry of the agreement, Ghana was to pay $3,528,048.95, bringing the total spent on the transaction to $19,978,848.95.
In the subsistence of the lease, however, Ghana had the option to go for an outright purchase.